22 March 2023 5 minute read

Ecommerce payment processing: an ultimate guide

Whether you're a seasoned ecommerce business owner or just getting started, this blog will help you make informed decisions about payment processing.
A guide to ecommerce payment processing

Ecommerce has changed how we shop, allowing us to purchase products and services from the comfort of our homes. However, with the rise of ecommerce comes the need for secure and efficient payment processing solutions. Payment processing is a critical component of any ecommerce business, as it ensures that transactions are processed quickly, accurately, and securely.
In this article, we'll explore how ecommerce payment processing works, the different payment methods available, and what to consider when choosing a payment provider.

Ecommerce payment methods

The first step in setting up ecommerce payment processing is understanding the different payment methods available. Here are five of the most common ways online shoppers like to pay:

1. Credit and debit cards

Accepting credit and debit cards is a must for any ecommerce business. Most customers prefer to pay with credit or debit cards online, which is widely accepted worldwide. Popular card types include Visa, Mastercard, American Express, and Discover.

2. Digital wallets

Digital wallets like PayPal, Apple Pay, Google Pay, and Amazon Pay allow customers to pay instantly. These payment methods are growing in popularity and global acceptance and fit perfectly in today's digitalised economy.

3. Bank transfers

The average ecommerce customer less commonly uses bank transfers, but it's still a popular B2B payment process. However, there are still domestic markets, such as Germany, where consumers prefer to pay directly using a wire transfer from their bank accounts.

4. Buy-now-pay-later

Instalment payments and financing options allow customers to spread out the cost of their purchase over time. Buy-now-pay-later (BNPL) payment methods are rapidly gaining popularity across all forms of commerce. Klarna, Clearpay, Laybuy, and Paypal Credit are industry leaders within the BNPL space.

5. Cryptocurrencies

Cryptocurrencies like Bitcoin, Ethereum, and Litecoin are digital currencies that are now widely accepted as an ecommerce payment method. Crypto payments can offer increased security and lower transaction fees than traditional payment methods.
When deciding which payment options to offer, consider your target audience and their preferences. By providing a variety of payment methods, you can increase customer satisfaction and make it easier for customers to complete their purchases.

What is ecommerce payment processing?

Ecommerce payment processing is an essential component of online business, allowing merchants to accept payments from customers anywhere in the world. Payment gateways facilitate these transactions and connect the merchant's account to the payment processor.
Secure and efficient payment processing is essential for building trust with customers and promoting seamless online transactions, which are critical for the success of ecommerce businesses. 

How does ecommerce payment processing work?

The entire ecommerce payment processing process typically takes just a few seconds, allowing customers to complete transactions quickly and easily. However, behind the scenes, complex technological processes are making everything happen. Here is an overview of how ecommerce payment processing works:

1. Payment information is entered:

Customers enter their payment and shipping details at the checkout of an online store.

2. Payment information is sent to payment gateway:

The payment information is sent to the payment gateway for approval, ensuring the payment details are legitimate.

3. Funding authorisation:

The payment processor sends a payment request to the bank or card issuer to verify the customer has sufficient funds and confirms their identity.

4. Merchant receives payment:

Once approved, the payment processor transfers the funds to the merchant's account. A confirmation message is sent to the ecommerce platform and the customer.

5. Payment settlement:

Finally, the payment processor reconciles the transaction, deducting any applicable fees and settling the payment to the merchant's bank account.

What to look for when choosing an ecommerce payment provider

Choosing the best payment processing for ecommerce is crucial for the success of your online business. With a wide range of options available, deciding which payment processor to use can be overwhelming. Here are some key factors to consider when choosing an ecommerce payment processor:

1. Accepting international payments

If you plan to sell internationally, consider payment processors that support multiple currencies and have experience processing payments in different countries. Some payment processors may also offer fraud protection and compliance with local laws and regulations.

2. PCI compliance

Security is critical for online payments, especially with rising financial cybercrime. When choosing a payment provider, you should ensure it uses the latest encryption technology and is fully PCI-DSS compliant.

3. Accepting different payment methods

With the increased personalisation of online shopping experiences, customers want to be able to pay, their way. Offering a variety of practical payment methods can help improve conversions, boost revenue, and increase customer satisfaction.

4. B2B support

Payment issues can be frustrating for both you and your customers. Look for payment providers that offer robust customer support, payment expertise, technical troubleshooting and accessible help centres.

How can 3S Money help my ecommerce business?

3S Money is a fintech company that provides various financial services to businesses, including ecommerce businesses. Here are some ways that 3S Money can help your ecommerce business:

1. International payment experts

3S Money provides high-value cross-border payment solutions in 190+ countries without restriction on how much you can send.

2. Multi-currency accounts

With access to local IBANS and US account details you can send, receive, and exchange 65+ currencies from one business account.

3. Payment gateway integration

3S Money offers instant connectivity with Klarna, Stripe, Amazon Pay, and more. This allows you to accept and process online payments on more local online marketplaces.

4. Low transaction fees

3S Money charges low transaction fees for international and domestic payments, which can help you save on payment processing costs.

5. Fraud prevention

Every 3S Money payment is made through your safe and secure Client Portal and protected by robust safeguarding, compliance, and transaction monitoring procedures.

safeguards your funds with top-tier correspondent advanced fraud prevention technology and machine learning to monitor for suspicious activity, strange payment behaviour, or sophisticated cyber-attacks.

6. Dedicated support

Each International Business Account comes with a dedicated Client Manager. Our team are international payment specialists who have global experience and local expertise.

3S Money is leading the digital banking revolution, giving ecommerce businesses access to fairer and more innovative services. Our International Business Accounts are built by and for entrepreneurs and designed for today's economy.
Entering a secure and meaningful financial partnership will help lay the foundations of success for you, your company, and your clients. If you're searching for an ecommerce merchant account solution that goes beyond banking - 3S Money has got you covered.

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