Table of contents<\/h2>- What are online payments?<\/a><\/li>
- Important online payment terms <\/a>
- Payment gateway<\/a><\/li>
- Payment processor<\/a><\/li>
- Payment provider<\/a><\/li>
- Payment service<\/a><\/li>
- Merchant account<\/a><\/li><\/ul><\/li>
- How the payment process works<\/a><\/li>
- The 5 most popular online payment solutions<\/a>
- 1. PayPal<\/a><\/li>
- 2. Amazon Pay<\/a><\/li>
- 3. Google Pay<\/a><\/li>
- 4. Stripe<\/a><\/li>
- 5. Apple Pay<\/a><\/li><\/ul><\/li>
- Frequently asked questions about online payments<\/a><\/li>
- Make payments seamless with Birdeye<\/a><\/li><\/ul><\/div>\n\n\n\n
What are online payments?<\/h2>\n\n\n\n![\"Illustration](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-methods-for-paying-online_1X-1024x536.png\")
<\/figure>\n\n\n\nOnline payments are exchanges of currency made over the internet for goods or services purchased online and offline. These payments can be made online or via SMS<\/a>. Common online payment methods include:<\/p>\n\n\n\n\n- Credit Cards<\/strong>. Credit cards are one of the most popular and most widely-accepted online payment methods. Credit cards offer customers a line of credit that can be used to make purchases. The loan amount will have to be repaid in the future.<\/li>\n\n\n\n
- Debit Cards<\/strong>. Debit cards work like credit cards, except funds are drawn directly from the cardholder\u2019s bank account instead of a line of credit. <\/li>\n\n\n\n
- eChecks<\/strong>. eChecks are similar to paper checks. When paying via eCheck, the buyer is asked to enter the amount of purchase, checking account number, and routing number to make a purchase. The buyer will then \u201csign\u201d their name by entering it on the eCheck.<\/li>\n\n\n\n
- Third-party payment services<\/strong>. Commonly referred to as digital wallets, services like Apple Wallet and Google Wallet act as a middleman between buyers and online sellers. By attaching a bank account to a third-party service, online shoppers can make purchases directly from their mobile devices, computers, and through apps.<\/li>\n<\/ul>\n\n\n\n
Cash and checks were once the primary payment options for businesses, but today, customers prefer online payments because they\u2019re faster and easier. It\u2019s important to offer several payment options on your website to make sure you\u2019re meeting your customers\u2019 expectations<\/a>.<\/p>\n\n\n\nImportant online payment terms <\/h2>\n\n\n\n
If you want to provide your customers with their preferred methods of paying online, you should know how the payment process works. To do that, we need to cover a few important terms that are used when talking about online payments.<\/p>\n\n\n\n
Payment gateway<\/h3>\n\n\n\n
A payment gateway is a service that reads and processes the customer\u2019s payment information, like a digital credit card reader. Payment gateways take the customer\u2019s payment information and direct it to the merchant, and then to the payment processor when the sale takes place.<\/p>\n\n\n\n
Payment processor<\/h3>\n\n\n\n
A customer’s payment information is sent to a payment processor for validation. Payment processors make sure there are sufficient funds in the customer\u2019s account to cover the purchase total. Once the payment is authorized, the customer\u2019s funds are transferred from their account to the merchant. Payment processors also have anti-fraud parameters in place to guarantee both the customer and the merchant are protected during the purchase.<\/p>\n\n\n\n
Payment provider<\/h3>\n\n\n\n
Payment providers are companies that own and operate payment gateways, payment processors, or both. Some popular payment providers include PayPal, Stripe, and Square.<\/p>\n\n\n\n
Payment service<\/h3>\n\n\n\n
Payment providers usually offer payment services each with its own prices and features included. For example, Stripe offers both a basic payment service and a fully customized payment service that can be tailored to fit your business\u2019s needs. <\/p>\n\n\n\n
Merchant account<\/h3>\n\n\n\n
Merchant accounts are where a buyer\u2019s funds are transferred after a successful debit or credit card purchase. From there, the funds are transferred to the seller\u2019s primary bank account on a monthly or semi-monthly basis.<\/p>\n\n\n\n
How the payment process works<\/h2>\n\n\n\n
We\u2019ll walk you through an example purchase to help you fully understand the online payment process. But before we do that, there are three things your business will need to process payments on your website, including:<\/p>\n\n\n\n
\n- An account with a payment service provider like PayPal.<\/li>\n\n\n\n
- Some payment services may require a merchant account. If your payment service does ask for one, you’ll have to set one up.<\/li>\n\n\n\n
- A button on your site to initiate a transaction. Some service providers might give you a button, but if they don’t, you can use a software program to create your own.<\/li>\n<\/ol>\n\n\n\n
![\"Diagram](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/Online-payment-process-works_1X-1024x536.png\")
<\/figure>\n\n\n\nOnce you have a payment service provider account, a merchant account, and a transaction button, you can connect the transaction page to your online payment system. The transaction page is where your customers will start the transaction process. Once they click the button directing them to the payment form, they will enter their credit card information and submit it for validation.<\/p>\n\n\n\n
From there, the customer\u2019s funds will be transferred to the payment gateway<\/a>. Their financial information is encrypted to prevent fraud or theft. <\/p>\n\n\n\nAt this point, your payment service provider will verify the customer\u2019s payment information through their own payment processor or a third-party processor. Once the processor has verified the customer has sufficient funds to complete the transaction, the funds will start moving through the transfer process.<\/p>\n\n\n\n
The first transfer is from the customer\u2019s bank account to the merchant account connected to your website. You\u2019ll be notified when the payment has been approved and when the funds have been successfully transferred. The customer will also receive a transaction update.<\/p>\n\n\n\n
The 5 most popular online payment solutions<\/h2>\n\n\n\n1. PayPal<\/h3>\n\n\n\n![\"PayPal](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-online-payment-methods-1_1X-1024x536.png\")
<\/figure>\n\n\n\nPayPal<\/a> is likely the most widely-used payment service provider worldwide. The platform has over 30 million merchants and 400 million active customers. With PayPal, customers can send and receive payments directly from their bank account or credit card.<\/p>\n\n\n\nPayPal is one of the few payment service providers that let users send money directly through the service itself. For example, one user can send funds to another after a sale has been made in-person or online. <\/p>\n\n\n\n
Cost:<\/strong> PayPal\u2019s rate is set between 2% and 4% for domestic transactions, plus an additional $0.49 per transaction. There are no monthly fees or onboarding costs.<\/p>\n\n\n\n2. Amazon Pay<\/h3>\n\n\n\n![\"Amazon](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-online-payment-methods-2_1X-1024x536.png\")
<\/figure>\n\n\n\nWith Amazon Pay<\/a>, customers can make a quick transaction using their Amazon account information. Customers can also use features like Alexa to make purchases. Your customers can use Amazon Pay if you offer the service during checkout. <\/p>\n\n\n\nCost: <\/strong>Amazon charges 2.9% per transaction plus an additional $0.30 per transaction through web and mobile<\/a>. For payments made through Alexa, they charge 4%.<\/p>\n\n\n\n3. Google Pay<\/h3>\n\n\n\n![\"Google](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-online-payment-methods-3_1X-1024x536.png\")
<\/figure>\n\n\n\nGoogle users can use Google Pay<\/a> to pay for goods and services and transfer money from one user to another. Google Pay is a convenient payment option because millions of people have Google accounts. <\/p>\n\n\n\nCost: <\/strong>Google Pay is free for both merchants and customers, but standard credit card transaction fees may apply.<\/p>\n\n\n\n4. Stripe<\/h3>\n\n\n\n![\"Stripe](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-online-payment-methods-4_1X-1024x536.png\")
<\/figure>\n\n\n\n
- Payment gateway<\/a><\/li>
- Payment processor<\/a><\/li>
- Payment provider<\/a><\/li>
- Payment service<\/a><\/li>
- Merchant account<\/a><\/li><\/ul><\/li>
- How the payment process works<\/a><\/li>
- The 5 most popular online payment solutions<\/a>
- 1. PayPal<\/a><\/li>
- 2. Amazon Pay<\/a><\/li>
- 3. Google Pay<\/a><\/li>
- 4. Stripe<\/a><\/li>
- 5. Apple Pay<\/a><\/li><\/ul><\/li>
- Frequently asked questions about online payments<\/a><\/li>
- Make payments seamless with Birdeye<\/a><\/li><\/ul><\/div>\n\n\n\n
What are online payments?<\/h2>\n\n\n\n
<\/figure>\n\n\n\nOnline payments are exchanges of currency made over the internet for goods or services purchased online and offline. These payments can be made online or via SMS<\/a>. Common online payment methods include:<\/p>\n\n\n\n
- \n
- Credit Cards<\/strong>. Credit cards are one of the most popular and most widely-accepted online payment methods. Credit cards offer customers a line of credit that can be used to make purchases. The loan amount will have to be repaid in the future.<\/li>\n\n\n\n
- Debit Cards<\/strong>. Debit cards work like credit cards, except funds are drawn directly from the cardholder\u2019s bank account instead of a line of credit. <\/li>\n\n\n\n
- eChecks<\/strong>. eChecks are similar to paper checks. When paying via eCheck, the buyer is asked to enter the amount of purchase, checking account number, and routing number to make a purchase. The buyer will then \u201csign\u201d their name by entering it on the eCheck.<\/li>\n\n\n\n
- Third-party payment services<\/strong>. Commonly referred to as digital wallets, services like Apple Wallet and Google Wallet act as a middleman between buyers and online sellers. By attaching a bank account to a third-party service, online shoppers can make purchases directly from their mobile devices, computers, and through apps.<\/li>\n<\/ul>\n\n\n\n
Cash and checks were once the primary payment options for businesses, but today, customers prefer online payments because they\u2019re faster and easier. It\u2019s important to offer several payment options on your website to make sure you\u2019re meeting your customers\u2019 expectations<\/a>.<\/p>\n\n\n\n
Important online payment terms <\/h2>\n\n\n\n
If you want to provide your customers with their preferred methods of paying online, you should know how the payment process works. To do that, we need to cover a few important terms that are used when talking about online payments.<\/p>\n\n\n\n
Payment gateway<\/h3>\n\n\n\n
A payment gateway is a service that reads and processes the customer\u2019s payment information, like a digital credit card reader. Payment gateways take the customer\u2019s payment information and direct it to the merchant, and then to the payment processor when the sale takes place.<\/p>\n\n\n\n
Payment processor<\/h3>\n\n\n\n
A customer’s payment information is sent to a payment processor for validation. Payment processors make sure there are sufficient funds in the customer\u2019s account to cover the purchase total. Once the payment is authorized, the customer\u2019s funds are transferred from their account to the merchant. Payment processors also have anti-fraud parameters in place to guarantee both the customer and the merchant are protected during the purchase.<\/p>\n\n\n\n
Payment provider<\/h3>\n\n\n\n
Payment providers are companies that own and operate payment gateways, payment processors, or both. Some popular payment providers include PayPal, Stripe, and Square.<\/p>\n\n\n\n
Payment service<\/h3>\n\n\n\n
Payment providers usually offer payment services each with its own prices and features included. For example, Stripe offers both a basic payment service and a fully customized payment service that can be tailored to fit your business\u2019s needs. <\/p>\n\n\n\n
Merchant account<\/h3>\n\n\n\n
Merchant accounts are where a buyer\u2019s funds are transferred after a successful debit or credit card purchase. From there, the funds are transferred to the seller\u2019s primary bank account on a monthly or semi-monthly basis.<\/p>\n\n\n\n
How the payment process works<\/h2>\n\n\n\n
We\u2019ll walk you through an example purchase to help you fully understand the online payment process. But before we do that, there are three things your business will need to process payments on your website, including:<\/p>\n\n\n\n
- \n
- An account with a payment service provider like PayPal.<\/li>\n\n\n\n
- Some payment services may require a merchant account. If your payment service does ask for one, you’ll have to set one up.<\/li>\n\n\n\n
- A button on your site to initiate a transaction. Some service providers might give you a button, but if they don’t, you can use a software program to create your own.<\/li>\n<\/ol>\n\n\n\n<\/figure>\n\n\n\n
Once you have a payment service provider account, a merchant account, and a transaction button, you can connect the transaction page to your online payment system. The transaction page is where your customers will start the transaction process. Once they click the button directing them to the payment form, they will enter their credit card information and submit it for validation.<\/p>\n\n\n\n
From there, the customer\u2019s funds will be transferred to the payment gateway<\/a>. Their financial information is encrypted to prevent fraud or theft. <\/p>\n\n\n\n
At this point, your payment service provider will verify the customer\u2019s payment information through their own payment processor or a third-party processor. Once the processor has verified the customer has sufficient funds to complete the transaction, the funds will start moving through the transfer process.<\/p>\n\n\n\n
The first transfer is from the customer\u2019s bank account to the merchant account connected to your website. You\u2019ll be notified when the payment has been approved and when the funds have been successfully transferred. The customer will also receive a transaction update.<\/p>\n\n\n\n
The 5 most popular online payment solutions<\/h2>\n\n\n\n
1. PayPal<\/h3>\n\n\n\n
<\/figure>\n\n\n\nPayPal<\/a> is likely the most widely-used payment service provider worldwide. The platform has over 30 million merchants and 400 million active customers. With PayPal, customers can send and receive payments directly from their bank account or credit card.<\/p>\n\n\n\n
PayPal is one of the few payment service providers that let users send money directly through the service itself. For example, one user can send funds to another after a sale has been made in-person or online. <\/p>\n\n\n\n
Cost:<\/strong> PayPal\u2019s rate is set between 2% and 4% for domestic transactions, plus an additional $0.49 per transaction. There are no monthly fees or onboarding costs.<\/p>\n\n\n\n
2. Amazon Pay<\/h3>\n\n\n\n
<\/figure>\n\n\n\nWith Amazon Pay<\/a>, customers can make a quick transaction using their Amazon account information. Customers can also use features like Alexa to make purchases. Your customers can use Amazon Pay if you offer the service during checkout. <\/p>\n\n\n\n
Cost: <\/strong>Amazon charges 2.9% per transaction plus an additional $0.30 per transaction through web and mobile<\/a>. For payments made through Alexa, they charge 4%.<\/p>\n\n\n\n
3. Google Pay<\/h3>\n\n\n\n
<\/figure>\n\n\n\nGoogle users can use Google Pay<\/a> to pay for goods and services and transfer money from one user to another. Google Pay is a convenient payment option because millions of people have Google accounts. <\/p>\n\n\n\n
Cost: <\/strong>Google Pay is free for both merchants and customers, but standard credit card transaction fees may apply.<\/p>\n\n\n\n
4. Stripe<\/h3>\n\n\n\n
<\/figure>\n\n\n\n
- Debit Cards<\/strong>. Debit cards work like credit cards, except funds are drawn directly from the cardholder\u2019s bank account instead of a line of credit. <\/li>\n\n\n\n
- 2. Amazon Pay<\/a><\/li>
- Payment processor<\/a><\/li>
![\"Apple](\"https:\/\/birdeye.com\/blog\/wp-content\/uploads\/5-best-online-payment-methods-5_1X-1024x536.png\")
<\/figure>\n\n\n\n