E-Commerce Payment Solutions
What are e-commerce payment solutions, and how can they help your company? In short, these are digital payment systems that allow businesses, merchants, and online storefronts to perform transactions with customers and clients.
By adopting an e-commerce payment solution, your business will be able to send and receive funds on various international financial networks. This allows you to carry out global payments outside of the country in which your business is based.
For instance, Payset's e-commerce payment system allows you to transact like a local in over 180 countries and regions, including the U.S., EU, and UK. This allows your business to conduct cross-border transactions more easily and affordably.
What Is E-Commerce Payment Processing?
E-commerce payment processing includes the various methods by which businesses accept payment for products and services from customers and clients.
This process involves securely transmitting transaction details between businesses, customers, payment services, and banks in order to authorize and settle payments.
Finding a quality e-commerce payment processing system can be challenging, as every service provides different fees, transaction speeds, and other features. Plus, each service may provide coverage for different countries and foreign currencies. This means that your business needs to find an e-commerce payment solution that meets its needs.
E-Commerce Payment Processing Vs. Traditional Payment Processing
In traditional payment processing, businesses and merchants typically need to redirect a customer to a third-party payment gateway or external checkout page. On that separate page, the customer must enter their payment details in order to complete their online purchase.
By contrast, in e-commerce payment processing, payment and checkout forms are typically integrated with a business’s own website. This allows customers to enter their payment details all in one place — without the need to enter confidential information on an unfamiliar page.
Each method has advantages. Payment solutions for e-commerce generally increase customer trust because of their improved user experience and unified nature. These advantages might make users more likely to complete transactions, thereby increasing your sales and revenue.
On the other hand, traditional payment processing systems are often easier to integrate with your site. As such, you might choose either option if you operate an online business.
Types of E-Commerce Payment Solutions
There are multiple participants in e-commerce payment solutions. Below, we’ll discuss payment gateways, payment processors, and e-commerce merchant accounts.
Payment gateway solutions for e-commerce businesses are services that help you accept payments. They connect your business to a merchant services provider.
Payment gateways send transaction data from your business website to a payment processor, which in turn sends data to banks. Payment gateways also transmit information about whether transactions are approved or denied back to your company.
Payment processors play a central role in e-commerce transactions by transferring transaction data between banks, credit card companies, and merchant accounts.
If you sign up for an e-commerce payment solution, it may be referred to as a payment gateway or a payment processor. Regardless of the name that is used, these services will provide a way for you to accept payments online, though there may be differences between services.
Merchant bank accounts are intermediary parties that can help your business receive customer payments. After customer payments are authorized or settled, the merchant bank account receives funds and then transfers those funds to your business’s own bank account. The entire process may take multiple business days to complete.
You may need to enter a working relationship with an e-commerce merchant account provider in some cases. However, many e-commerce payment solutions do not require you to interact with any additional service and instead allow direct withdrawals.
How Does E-Commerce Payment Processing Work?
E-commerce payment processing involves several steps. First, a customer enters their payment card information into a form provided by a merchant, usually on a website or mobile app.
Next, the payment gateway sends that information to a payment processor in the form of encrypted data. The processor, in turn, sends that data to the bank that issued the customer’s card. That bank determines whether the customer can carry out the transaction; if the customer does not have sufficient funds or high enough credit, the transaction may be declined.
Then, the payment processor sends information indicating whether the transaction is approved or declined back to the payment gateway. The payment gateway, in turn, sends that information to the merchant. At this point, the order is finalized. Typically, the merchant sends a confirmation notice to the customer showing that the transaction is complete.
Sometimes, accounts are not settled until days after the transaction occurs. However, all other parts of the transaction are fast or instant. Rapid e-commerce payment solutions can help businesses handle more transactions, thereby improving revenue and customer satisfaction.
How Do Payment Gateways, Payment Processors, and Merchant Accounts Work Together During a Transaction?
As explained above, every participant is vital to the e-commerce transaction process. To summarize those roles briefly:
- Payment gateways receive customer transaction data from your business; they also return approval statuses to your business near the end of the payment process
- Payment processors send transaction data from gateways to banks; they also send verification information back to payment gateways
- Merchant accounts receive funds transferred from customer accounts; later, funds are transferred from the e-commerce merchant account to your business bank account
Collecting Information With E-Commerce Payment Solutions?
Your company (or your chosen payment service) may collect information from customers during an e-commerce transaction. This data can be divided into two main categories.
The first data category includes identifying information, such as a customer’s legal name, address and country of residence, and email and phone number.
The second category includes payment information, such as credit card numbers, debit card numbers, CVC codes, expiration dates, and possibly bank or payment app information.
E-commerce payment solutions may or may not allow you to collect every type of data. And because a large amount of payment information is private and encrypted, that data may not be directly available to your company. As such, you may need to take other steps to collect data from your customers for private use. However, e-commerce payment solutions, by definition, will allow you to collect payment information from the customer and complete their transaction.
Payment tokenization is a security feature that replaces transaction details with an encrypted string called a “token.” This ensures that third parties who handle transaction data cannot store or access the information in the token without having proper authorization.
Tokenization and other forms of encryption can help your business work securely — protecting both your operations and the safety of your customers’ data. However, any payment service that uses industry-standard encryption likely provides sufficient protection.
Considerations When Choosing an E-Commerce Payment Solution
It is important to take into consideration multiple factors when selecting a payment gateway solution for e-commerce business. Doing so will ensure that your chosen option fully meets your needs and provides your business with a long-term payment solution.
Security is a critical consideration when selecting any payment service. In this regard, you should take into account the following factors:
- Standard access measures, such as password-based logins and two-factor authentication (2FA) for administrators in your organization
- Compliance with safeguarding rules and regulations, such as whether the payment service provider segregates corporate funds and customer funds
- Compliance with PCI DSS standards — a set of security standards that are found in most payment services available today
- Compliance with privacy regulations, such as compliance with the EU’s GDPR rules if the payment company serves customers in that region
- Anti-fraud measures such as fraud reporting services
Payset satisfies all of these requirements. Ensuring that you rely on a fully secure service is critical to protecting your business’ integrity and the safety of your customers. Maximizing protections can indirectly prevent the costs of fraud, resulting in legal claims and bankruptcy.
It’s important to consider an e-commerce payment solution's fee structure before signing up for it. As a business, you will likely pay fees on every transaction. This may include:
- Percentage-based fees
- Flat per-transaction fees
- Combined percentage and flat fees
- Conversion fees for cross-currency transactions
You should also consider fees that apply to your entire subscription, such as account opening fees, recurring or monthly fees, and other costs that exist outside standard transactions.
Fees are a key consideration because they can determine the features of the service that you receive. More broadly, fees will have an impact on your company’s finances. Balancing features and affordability is key to using an e-commerce payment service effectively.
Types Of Payment Methods On Offer
You should consider what types of payment an e-commerce payment solution supports, such as
- Credit cards, debit cards, and other payment cards
- Bank transfers
- Digital payment apps and wallets, such as PayPal
- Mobile payment apps and QR codes
- Gift cards and prepaid cards
- Digital currencies, cryptocurrencies, and stablecoins
Choosing a service that supports a wide variety of payment methods is important, as doing so will allow you to serve as many customers as possible.
However, only a few of the above transaction methods are widely used. Data from Statista shows that credit cards and debit cards together accounted for 32% of e-commerce transactions in 2022, while digital wallets accounted for 49% of those transactions. As such, you do not need to support every type of transaction to serve most customers.
Types of International Payment Methods on Offer
You should also examine whether a service can handle international payments. Consider:
- Accepted foreign currencies
- Supported payment networks
- Supported countries and regions
Once again, opting for an e-commerce payment solution that allows for a wide array of transaction options will help you to serve more customers and grow your business.
At the same time, regulations, trade policies, and international conversion rates may affect your ability to operate globally, and not every region is profitable. As such, it is important to consider which countries you can realistically serve in your business’s unique circumstances.
Do You Need an E-Commerce Payment Solution?
Digital payments are now almost universal, meaning that e-commerce payment solutions are a necessity for many companies. Your business should subscribe to such a payment solution if it transacts with customers, clients, or business partners online in any way.
In other words, e-commerce payment solutions are useful — and even a necessity — if your company accepts remote or digital payments of any type.
The nearly mandatory nature of e-commerce can be seen as a positive. E-commerce payment solutions are often simple and affordable. These services can simplify your financial activities, help you serve your customers better, and improve your business operations.
How Can Payset Help E-Commerce Businesses?
Payset’s e-commerce payment solution can help your company meet all of its payment needs. With our services, you can accept and send payments globally across multiple payment networks and transact without any maximum limits.
You can send and receive money in 180 countries, exchange 38 currency pairs, and hold 34 currencies in your account — all at affordable rates. See our fee page for details.
We also offer industry-standard security features and comply with regulations such as UK FCA’s safeguarding rules and EU GDPR privacy regulations.
With Payset, you can transact simply, securely, and quickly at a low cost. Sign up now or contact us for more information if you are not sure whether our service is right for you.
Frequently asked questions
What is a multi-currency account/virtual IBAN?
A Payset multi-currency account allows you to receive money in 34 different currencies and send money in up to 38 currencies, all within the same account.
You can deposit and withdraw funds, convert currencies at competitive exchange rates, and hold your chosen currencies to capitalize on market movements.
A Payset multi-currency account allows startups and business owners to receive payments from clients virtually anywhere in the world and pay suppliers, staff, and contractors quickly and affordably in their chosen currency.
- Funds can be deposited and withdrawn from the account for a small fee.
- Account holders can send and receive money with other Payset users for free.
- Depending on your region, you can use various payment networks from your Payset account, including SWIFT, SEPA, ACH, Fedwire, Faster Payments, BACS, and CHAPS.
- Once you register an account, you will be provided with a Virtual IBAN (International Bank Account Number), which makes all of these transfers easy.
- We provide you with local payments and collections. For example, transactions in USD, EUR, CAD, and GBP are processed through the local payment networks, which is far cheaper and takes minutes as opposed to days
Are there limits on the amount of money I can send and receive?
No, there are no transaction limits on Payset multi-currency accounts.
However, higher-volume transactions may require additional anti-fraud verification. If you plan to make a large transaction, contact us in advance to avoid verification delays.
How is Payset regulated?
Payset allows you to receive payments in 34 currencies. You can send payments from your account in 38 currencies. For more details, check our payment guide.
How do I add money to my account?
How do I send money from my account?
Once you have opened your verified IBAN account and added money to a balance, transferring funds is simple.
Simply log in into your account and add a beneficiary, then simply “make a transfer” in your preferred currency to that beneficiary.
Types of Multi-Currency Accounts
Information contained in this publication is provided for general education and information purposes only and should not be construed as legal, tax, investment or other professional advice or recommendation, or an offer of, or solicitation for, any transactions or any other actions (or refraining therefrom); This material has been prepared without taking into account any particular recipient’s financial objectives or situation. We make no warranty, guarantee or representation, whether express or implied, as to the completeness or accuracy of the information contained herein or fitness thereof for a particular purpose; Use of images and symbols is made for illustrative purposes only and does not constitute a recommendation or advice to take or refraining from any action; Use of brand logos does not necessarily imply a contractual relationship between us and the entities owning the logos, nor does it represent an endorsement of any such entity by Pay Set Limited, or vice versa; Market information is made available to you only as a service, and we do not endorse or approve it; Any reference to past performance, predicted returns, or likelihood performance scenarios may not reflect actual future performance and certainly do not guarantee future outcomes.