Simplifying Payments: The Ultimate Guide to Ecommerce Payment Processing

Simplifying Payments: The Ultimate Guide to Ecommerce Payment Processing



Online payments are very different from offline ones.

Unlike offline stores, where customers can buy and pay for products without sharing information, online stores require more details to identify customers and process their payments. Customers must share their sensitive payment information on your site to complete the transaction.

Now, imagine if your site is vulnerable to attacks and redirects customers to untrustworthy payment sites. You’re most likely to lose customers and sales. If you run a subscription-based business, you might also lose an opportunity to earn recurring revenue.

That’s why safe ecommerce payment processing is necessary to streamline the payment process and improve customer trust.

In this blog, we’ll discuss:


This will help you successfully set up an ecommerce payment gateway and processor and provide customers with a seamless and secure payment experience.



What is ecommerce payment processing?

Ecommerce payment processing is a method of accepting and processing online payments for goods and services sold on an ecommerce website.

It is integrated with your website to help your customers make payments on the website instead of being directed to a third-party payment website.



Different payment methods


Gone are the days when customers could pay only through cash or credit cards. Today, customers can use any payment method of their choice to purchase a product. In fact, a study showed that businesses that offered multiple payment options saw a 30% jump in their revenue. 


Here are a few commonly used payment methods in the ecommerce business.

  1. Credit and debit cards

    Credit and debit cards are still the most commonly used payment methods. When a customer purchases something from the site, the processor contacts the credit or debit card issuer for authorization and credits the payment to the account once approved. 

  2. Digital wallets

    A digital wallet is an electronic version of a wallet that allows customers to transact digitally using any device. Digital wallets save customer details safely in the cloud and are linked to the customer’s bank account. So, customers can pay from anywhere, even if they do not have a physical wallet. Apple Pay and PayPal are a few examples of digital wallets. Digital wallets are so convenient that over 32% of millennials prefer using PayPal over other payment methods. 

  3. Netbanking

    Netbanking allows customers to make online payments directly from their bank account. While no third-party apps like Apple Pay are involved, the customer has to manually log in to their online account to complete the transaction. This can prove cumbersome, especially if customers don’t remember net banking credentials or have no time to go through the process. 

  4. Buy-now-pay-later (BNPL)

    A rage among youth, BNPL is a payment method that allows customers to buy and pay for a product in the future. 

    According to a Motley Fool survey, 27% of customers use BNPL more than credit cards, while 62% believe it could soon replace credit cards due to benefits like 0% interest and no credit risk.

    The customer is billed automatically when the next payment is due. Integrating solutions like Shopify Pay Installments will help you offer customers the option to pay in installments at checkout. 

  5. Digital currencies 

    Digital currencies like cryptocurrencies enable customers to complete payments through digital wallets and exchanges. Cryptocurrencies prevent counterfeit transactions and are thus commonly used by customers worldwide. Including cryptocurrency as a payment method can help you tap into a new, unexplored market, reduce transaction fees, and decrease the chances of fraud and chargebacks.

    However, a word of caution: check compliance and legal requirements before including them in your ecommerce site. 

  6. Prepaid cards

    Prepaid cards are cards that come loaded with a certain amount of money. A gift card is an example of a prepaid card. The person who purchases the gift card has already paid for it. The recipient has to only use it and enter a unique code (if required) to buy the products. Most prepaid cards are not linked to a bank account. However, some banks offer co-branded prepaid cards with ecommerce brands to improve customer loyalty.

  7. Mobile payments

    Mobile payments allow customers to make payments through mobile devices. Customers can pay by scanning QR codes, in-app wallets, or wireless credit cards. Mobile payments are convenient, easy to use, and do not require customers to carry additional cards or cash everywhere.



Key components of ecommerce payment processing

By now, you should be familiar with the various payment options you can include to improve customers' buying experiences. However, you would need the following components to make this work successfully.

  1. Payment gateway

    A payment gateway is like the Point of Sale (PoS) of ecommerce sites. This is where all the critical transactions take place. You must integrate your website with the payment processor system to facilitate payments. This will allow customers to enter their payment credentials safely, which are then passed to the payment processor. 

  2. Payment processor

    The payment processor is a third-party service provider that validates the information from the payment gateway, checks customers’ fund availability with their bank or card issuer, and authorizes the payment. 

  3. Merchant accounts

    The merchant account is a type of bank account used by the merchant (in this case, your entity) to receive payments. Once the payment processor authorizes the payment, you’ll receive the amount in your merchant account. 

How does ecommerce payment processing work?

Here’s a sneak peek of how the components work together to simplify ecommerce payment processing. 

  1. It begins with the customer placing their orders at the checkout page and adding payment details to complete the transaction.
  2. The payment gateway, which is integrated into your website, receives the details and relays them to the payment processor.
  3. The payment processor validates the customer information with the bank or card issuer and authorizes or declines the payment, depending on factors like funds availability and customer identity.
  4. Once the payment is authorized, the payment processor sends an approval to the payment gateway.
  5. The payment gateway will notify you once the payment is approved. You can then proceed to confirm the customer’s order.
  6. The payment processor will credit the amount to the merchant’s account within the stipulated working days.

In digital payments, the settlement happens the same or the next working day. 

How to choose the right ecommerce payment processor?

Since the payment processor is responsible for verifying and processing payments, you must choose the right provider carefully. Here are a few factors to consider.

  1. Security and Compliance

    Ensure the payment processor is Payment Card Industry Data Security Standard (PCI DSS). It ensures customers’ data safety and protects them from fraud and theft. Additionally, ensure that they provide robust security features like encryption to safeguard the customers’ data.

  2. Integration

    You’ll use plenty of third-party apps to operate your ecommerce site smoothly. This could include billing support, embedded checkouts, and hosted payment pages. Hence, ensure the payment processor is compatible with the old and new applications and choose a provider who supports customizable integrations. 

  3. Costs

    Various costs are associated with using a payment processor - some are upfront, and some are hidden. The standard charges applied are:

    • Set-up fees: The processor charges fees for setting up the payment processor.
    • Subscription fees: The processor charges an additional subscription fee until you use their services. The subscription could be annual or monthly.
    • Transaction fees: In addition to the flat fee, the processor charges transaction fees of 1% to 5% for each transaction. Some processors don’t charge transaction fees if you use their subscription service. 

      In addition to these fees, the processor may also charge extra for chargebacks, disputes, and international payments. Hence, it is crucial to understand their cost structure and fees thoroughly to avoid incurring a huge expense. 

  4. Tokens

    If your business has a subscription model or allows customers to save payment details on your site, choose a processor offering tokens. Tokens save the customer’s information as an auto-generated, random alphanumerical code. This code represents the customer in your system, and the processor uses this instead of the customer’s card details to charge them. 

  5. Payment methods 

    To expand your business, you need a processor that supports international transactions and accepts foreign payments. The payment gateway must recognize and support foreign bank cards and enable customers to convert payments into their preferred currency. It must also comply with the local tax laws. Choose a provider that facilitates all these requirements. 

    Additionally, ensure that your payment processor accepts your customer's preferred payment methods. 

  6. Customer support

    Choose a provider with a dedicated customer support team that provides timely responses via chat, e-mail, and phone. 

    Alternatively, you can use payment solutions like Shopify Payments to accept online payments without setting up a third-party payment processor or merchant account. This will help you instantly receive all major types of customer payments.

Best practices for ecommerce payment processing

There’s more to payment processing than choosing the right provider. Here are a few best practices you can implement to ensure a smooth customer payment experience.

  1. Optimize checkout process

    Imagine walking through multiple aisles and floors to reach the payment counter and pay for a product. That sounds stressful, right? That’s exactly how your customer might feel if the online checkout process is lengthy and complex. They might even abandon your site and shop from your competitor if it is more convenient. 

    Reduce the steps required to complete the checkout process and simplify the process. For example, you could include a guest checkout option for customers who don’t want to enter personal information or add a one-click buy option so customers don’t have to enter the details again. 

  2. Make payment policies clear

    Your website should clearly communicate all vital payment information to avoid confusion and disputes. This could include information on accepted payment methods, refund policies, additional fees and charges, payment processing details, and the customer support team's contact details. 

  3. Monitor fraud

    Fraud and chargebacks are common in ecommerce businesses and can impact your bottom line. Monitor your payment processes regularly and use fraud detection tools to track and stop fraudulent transactions and suspicious activities. It will save you money on fraud and safeguard your reputation. 

  4. Offer different payment methods

    As mentioned before, offer different payment methods and choose a payment processor that supports multi-currency transactions in different countries. This will help you expand your business to new markets and generate more revenue by making online payment easy.

  5. Improve payment processing continuously

    Payment processing is the last step in converting potential buyers into customers, so you can’t get it wrong. Monitor your payment process regularly to see if any gaps prevent customers from completing transactions. Track key metrics and collect customer feedback to identify potential bottlenecks in the process and solve them. 

How Marmeto can streamline payment processing for your brand

Selecting the right ecommerce payment processor and implementing the best practices can be challenging, especially when it comes to growing your business. 

You must integrate the payment gateway and processor with your site and ensure they function seamlessly while accepting and processing payments. You must also ensure the gateway and processor are secure and accept payments in different types and currencies.


Ensuring all this can be time-consuming and become complex as you grow your business. 


However, don’t let these problems stop you from scaling your business.


At Marmeto, we work with ecommerce brands like yours to integrate payment gateways and customize the checkout process to improve the payment experience for your customers. If you have a super-specific functionality requirement, don’t worry. Our team has extensive Shopify knowledge and development skills that help you customize your business.


We’ve helped 1000+ clients across 31+ countries in building their ecommerce business.


So, contact us if you’re looking for a partner to build and scale your ecommerce business and streamline payment processing. We're happy to help!


Don’t let payment issues become the roadblock to your brand’s success. Here are a few things to remember when you set your payment processing system:


  • Accept multiple payment methods and choose a processor that accepts payments in different currencies.


  • When choosing a payment processor, consider security, integrations, upfront and other associated costs, and customer support. Do thorough research or consult a technology partner like Marmeto, who can help you make the right decision. 


  • Implement best practices like communicating the payment policies, monitoring fraud proactively, optimizing the checkout process, and continuously improving the payment experience.


Remember, payment processing is the last step in acquiring or retaining customers. Customers can leave your website if they find the payment process complex or untrustworthy. Hence, don’t undermine the potential of this critical step. Test and iterate the process continuously to provide customers with a smooth and safe experience. 


Contact us if you need help integrating payment processing components into your website. 


  1. Why is ecommerce payment processing important?

    Ecommerce payment processing is important because it allows you to accept and process online customer payments for purchased goods and services. 

  2. How does ecommerce payment processing work?

    When customers enter their payment details, the payment gateway relays the information to the payment processor. The processor validates the information and authorizes the payment to be deposited into the merchant’s account. 

  3. How to choose the right ecommerce payment processor?

    While choosing an ecommerce payment processor, ensure they adhere to security and compliance policies, communicate the fees upfront, and support all currencies and payment methods. Additionally, check if they allow integration with third-party systems and offer timely customer support. 

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