How to accept payments in an online store

Nicola Smith
15 November - 7 min read

Selling online is an excellent way to grow your business as it allows customers to access your store 24/7. Setting up a well-designed online store for your customers is one part of this process, but you also need a reliable payment gateway so your customers can pay easily and securely. A payment gateway is an online application service provider that authorises credit card and other payments processing. Used by a range of businesses including e-commerce retailers, online businesses and bricks and mortar companies with an online store, there is a range of payment gateways available in Australia. 


As we’ve seen throughout the COVID-19 restrictions in 2020, those businesses that can collect payments in several ways are best placed to pivot when there’s a need to change to operations quickly, which is why it’s important that businesses have the infrastructure to sell and accept payments online. In this article, we take a look at payment gateways and how these systems work.


How does a payment gateway work?

The information passed between the merchant, customer and banks are processed by a payment gateway. When you initiate a transaction, the payment gateway collects and transfers the company’s details to the customer. Throughout this process, the payment gateway effectively acts as the “middleman” allowing businesses to get paid while ensuring information is collected and shared securely between all parties. 


Generally, the payment journey on an online payment gateway follows nine steps:

  1. The customer picks their product or service and moves to the payment page.
  2. The customer enters their payment details, including credit or debit card number and the Card Verification Value (CVV) number, and it’s passed onto the payment gateway.
  3. The payment details are encrypted or tokenised, and fraud checks occur. The card data is sent to the merchant’s bank (the acquiring bank).
  4. The payment information is securely sent from the acquiring bank to the relevant credit card company (Visa, Mastercard, AmericanExpress).
  5. The credit card company performs its fraud check, and the payment data is sent to the issuing bank.
  6. Once the issuing bank has performed its fraud detection screening, the transaction is authorised, and the approved or declined payment is sent back to the card schemes and the merchant.
  7. The merchant’s bank sends an approval or declined message to the payment gateway, and the message is transferred to the merchant. If it’s approved, the business collects payment from the customer’s bank, and it’s deposited into your merchant account. 
  8. The payment is then deposited to the business’s bank account (settlement). The timeline for settlement will depend on the agreement you have with your online payment gateway provider. 
  9. Once this process is complete, the customer will either see a payment confirmation or be asked to enter alternative payment details (if the payment was declined).

Choosing a payment gateway

If you’re taking payments online, your business needs a secure and reliable online payment gateway. Australia is home to many technology companies that focus on payments alone. However, you can realise more value from the technology in your business by ensuring it integrates with other solutions. These solutions include alternative payment methods and financing options, stock management systems, shopping cart integrations and fraud detection.

How do you set up a payment gateway?

Rolling out a payment gateway integration in your business is straightforward once you have all the details. You’ll need to speak with your payment services provider to understand the steps to configure your payment gateway. Typically, this involves: 
  1. Completing relevant documentation including an application form, sharing company and personal identity documentation (business registration certificates, copies of passports and utility bills and bank statements).
  2. Signing all agreements once the relevant identity and security checks are completed.
  3. Testing transactions to make sure everything runs smoothly. 
  4. Choose whether to direct users to a hosted payment form or embed the payment functionality in your business’s website.
  5. Integrate your online payment gateway using the programming language relevant to your business.
Process payments smoothly
At Spenda, we are continually evolving our suite of products and tools that integrate across businesses. Our payment gateway has some of the lowest blended rates in Australia, along with the benefits of other tools that provide business owners with the data they need to make strong decisions.

Understanding payment gateways and integration can feel daunting, but we’ve designed our platforms to be intuitive for your business and, most importantly, your customers. From getting set up on our platform with the assistance of our technical team, through to accepting payments smoothly every day, Spenda’s products make accepting and providing payments a breeze.

Click here to get in touch, and learn more about payment gateway integration and how you can introduce the right tools and processes in your business for better management of your strategy and operations.


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