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The GoCardless content team comprises a group of subject-matter experts in multiple fields from across GoCardless.The authors and reviewers work in the sales, marketing, legal, and finance departments. All have in-depth knowledge and experience in various aspects of payment scheme technology and the operating rules applicable to each.The team holds expertise in the well-established payment schemes such as UK Direct Debit, the European SEPA scheme, and the US ACH scheme, as well as in schemes operating in Scandinavia, Australia, and New Zealand.
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Last editedApr 2023 — 3 min read
The online payments ecosystem is vast and can be a little overwhelming for a new business owner. When you’re researching the best online payment system for a small business, you’ll probably see some names you recognise, like PayPal and Stripe, as well as a few you don’t. We’ve put together a simple guide to online payment systems for small business, breaking down the basics and providing you with all the information you need to create an online payment system.
How does an online payment system work?
First, what is an online payment system? It’s simple. Online payment systems are a way of facilitating payments for goods and services online. These systems consist of three parts – the payment gateway, the payment processor, and the merchant account – which between them handle the entire transaction. Here’s a little more detail about these elements of online payment systems for small business:
Payment gateway – A middleman between the credit card companies and the payment processor. This could be a payment gateway in the US, or an international payment gateway if you are doing business overseas. The payment gateway essentially manages the technical side of the cardholder information transfer, ensuring that the transaction is completed quickly and securely.
Payment processor – A third-party that manages the card transaction process. The payment processor will communicate your customer’s card details with your bank and their own bank, and assuming that they have enough funds in the account, the payment will go through.
Merchant account – A special kind of bank account that businesses use to accept credit/debit card payments. Without a merchant account, you won’t be able to accept these types of payments, which is why start-up businesses should register for an account as soon as possible.
Together, these three elements of your online payment system process the entire transaction from beginning to end, withdrawing the funds from your customer’s bank account and depositing them in your business’s merchant account.
How to collect payments with GoCardless
1.
Create your free GoCardless account, access your user-friendly payments dashboard & connect your accounting software (if you use one).
2.
Easilyset up & schedule one-off or recurring payments via payment pages on your website checkout or secure payment links.
3.
From now on you'll get paid on time, every time, as GoCardless automaticallycollects paymenton the scheduled date. Simple.
Get started in minutes
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Types of online payment system
There are two main ways to take payments from customers online: credit/debit cards and Direct Debit. If you’re taking payment via credit/debit cards, you can either create an online payment system yourself (which means that you’ll need to set up the payment gateway, payment processor, and merchant account) or outsource to a third-party. If you outsource to a third-party payment provider, they’ll handle the entire transaction for you. Plus, the weight of PCI DSS compliance won’t be so heavy, as your company won’t actually come into contact with any financial data.
Then, there’s Direct Debit (an automated payment method that lets you take payments from your customer’s bank accounts directly). Once again, you can collect Direct Debit payments in-house (to do this, you’ll need to invest in Bacs approved Bacstel-IP software, as well as your own SUN), or you can outsource Direct Debit payments to a third-party who’ll handle the payment collection on your behalf. There are a broad range of Direct Debit payment providers to choose from, including GoCardless (we’ll explore this option in a little more detail later in the article).
Create an online payment system: step-by-step
Now that you understand a little more about online payment systems, let’s look at how you can create an online payment system for your organisation. If you’re not going with a third-party online payment system, you can follow these steps to create an online payment system:
Consult an expert to ensure that you’re getting all the coding, security, and compliance issues right.
Set up a hosting platform and apply for a Secure Socket Layer (SSL) certificate.
Build the payment form/payment page.
Find a payment processor that gives you the ability to process different types of payments, from credit and debit cards to Direct Debit.
Integrate your payment processor/merchant account with your payment page.
Conquering online payments with GoCardless
Direct Debit may be the best online payment system for small business. GoCardless can manage the entire payment collection process for you, ensuring that your business receives the money you’re expecting, when you’re expecting it. Plus, it’s easy to integrate GoCardless with your existing payments workflow – whether you’re working with Xero, QuickBooks, Sage, or so on – and the GoCardless API makes it easy to customise your online payment system to your exact specifications.
We can help
GoCardless helps you automate payment collection, cutting down on the amount of admin your team needs to deal with when chasing invoices. Find out how GoCardless can help you with ad hoc payments or recurring payments.
Over 85,000 businesses use GoCardless to get paid on time. Learn more about how you can improve payment processing at your business today.
Building a payment gateway requires considerable technical knowledge. You'll need a team of experienced developers who understand not only how to build software but also how to navigate the complexities of payment processing, such as dealing with multiple banking APIs and integration with various ecommerce platforms.
Building a payment gateway requires considerable technical knowledge. You'll need a team of experienced developers who understand not only how to build software but also how to navigate the complexities of payment processing, such as dealing with multiple banking APIs and integration with various ecommerce platforms.
Set up a hosting platform and apply for a Secure Socket Layer (SSL) certificate. Build the payment form/payment page. Find a payment processor that gives you the ability to process different types of payments, from credit and debit cards to Direct Debit.
Cost of Payment Gateway Development. The cost of creating a payment gateway depends on several factors, including the platform you choose, the complexity of the system, and the payment methods you support. On average, the cost of building a payment gateway from scratch can range from 50,000 dollars to 100,000 dollars.
Considerable set-up costs including all required certifications, developer fees, and audits. Lengthy set-up time between development UX testing, and ongoing maintenance. Requires more manpower than an out-of-box solution. Responsibility for security falls solely on your shoulders.
Venmo, Cash App, Google Pay, Zelle, PayPal, and wire transfer are some of the safest way to send money digitally. Money transfer apps are inexpensive and convenient options for paying family and friends. Wire transfers at a bank are ideal for securely sending large amounts domestically or internationally.
You can usually accept payment online for free via ACH transfer, as long as the payer facilitates the transaction. Most banks let you accept an ACH transfer without fees. You can't avoid fees for credit card payments, but you could negate them by adding a surcharge for customers who pay with credit cards.
If you want to accept credit card payments, you can do it in one of two ways: merchant accounts or payment service providers. A merchant account is an account that you open with a bank to accept credit card payments.
Here are the general steps to becoming a payment processor: market research and planning, creating a business plan and registration, compliance and regulations research, building financial partnerships, building technology infrastructure and processing platforms, testing and launching, scaling and expanding.
The term Payment Gateway denotes a financial service that is provided by way of an e-commerce application service provider. However, to start a Payment Gateway service in India, one needs to obtain Payment Gateway License from the Reserve Bank of India.
Payment apps for Android can be made easily with Appy Pie. With Appy Pie's publishing support, we'll help you publish your app on the App Store. However, we don't undertake the Play store licensing cost. We provide support and guidelines throughout the process to ensure your app is published seamlessly.
Introduction: My name is Carlyn Walter, I am a lively, glamorous, healthy, clean, powerful, calm, combative person who loves writing and wants to share my knowledge and understanding with you.
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