Online payment platform – which is the best for small businesses?

Small businesses in the United Kingdom (UK) are defined as having a turnover of £10.2 million or less and having less than 50 employees. Despite these criteria, they make up 99.9% of UK businesses. With a limited staff base and considerably lower turnover, these businesses need the right solutions to accept payments and remain competitive.

It is especially true if they need to accept payments since online payments and purchases are gaining so much traction in a digitally connected world. However, choosing the best online payment platform for small businesses can be challenging.

Small business owners must consider cost, convenience, security, implementation, and other factors. They also need the right online payment system to attract and retain customers.

In this article, we explore what an online payment platform is, how it works, and why it’s an essential staple in your payment processing toolkit. We also help you understand how to choose the best online payment platform for your business to help you get started.

Let’s begin.

What is an online payment platform, and how does it work?

Online payment processing requires a small online business to set up an online payment system. However, not all payment gateways are created equal. Each gateway provider offers essential differences for accepting online payments. If you’re just starting out and this sphere is somewhat confusing, below, we explain what an online payment platform is and how it works. 

What is an online payment platform?

eCommerce businesses accept payments online for their goods or services. For this to happen, you need the right technical solution, where an online payment platform takes centre stage to help you accept payments securely. In general, three key elements make online payment acceptance possible.

These are:

• The payment gateway: This is a type of software that facilitates communication between your online store interface and that of your customer’s computer. Providing a secure portal for payment “communication”, your customer goes to your checkout page and enters their debit card or credit card information. Alternatively, they can pay via a digital wallet like Apple Pay or Google Pay. From here, a communication process ensues and the payment processor steps in, where payment information is transferred.

• The payment processor: Also called credit card processors, payment processors must assure customers and merchants of the security when processing the transaction. They must be Payment Card Industry – Data Security Standard (PCI-DSS) for this. In addition, they “move” and process transactions, moving funds through the processing network. For more on how this works, take a look at our discussion below.

• Merchant acquirer (merchant bank account): A merchant account, separate from a bank account, is where the merchant receives payment once the transaction has been approved. The merchant can access this account through a specially dedicated merchant account card or make payments online.

It is important to note that these three elements may be offered by separate providers. Alternatively, a single company may offer an online payment system that encompasses all three.

How does the online payments process work?

For those who have purchased from an online store, payment for a good or service usually happens within seconds. Despite this, a payment gateway’s communication and information-sharing process is generally quite complex. It involves multiple parties and a range of networks. In short, it can be broken down into two main parts: authorisation and settlement.

Let’s start with the online checkout page on your website. Your customer, who is the cardholder, selects a product or service to purchase or order from you. They then go to your checkout page and enter their credit or debit card details or choose their preferred payment method in the form provided on your payment gateway.

Alternatively, if your payment gateway is hosted through web hosting, your customer may be taken to another page away from your site where they enter their card details.

The payment gateway then contacts the connected payment processor, which contacts the customer’s card network. This can include networks such as Visa, Mastercard, or another entity that issued the customer’s card. The customer’s issuing bank then confirms that the cardholder details are correct and that sufficient funds are in the account to authorise the transaction.

The transaction is then approved, concluding the first step of authorisation. It is important to note that this phase must be completely secure. The information must be encrypted so that no one – including the merchant – can view the purchaser’s sensitive cardholder details.

The next phase is a settlement, when funds are transferred from the cardholder’s account into your merchant account. In this case, the card network communicates with each issuing bank. Next, the cardholder’s account will be reduced by the amount spent while the merchant’s account is credited with the payment.

The funds appear in the merchant’s account after subtracting interchange fees. In many cases, merchants have to wait at least one day for the payment from their customers to reflect in their merchant accounts. However, some providers offer instant settlement, meaning real-time funds are available to the merchant.

Does your business need an online payment platform?

If you are wondering if your business needs an online payment platform, the answer is a definitive yes, especially if you run an online or ecommerce store.

Some essential reasons to consider implementing such a platform on your website include:

• Convert more customers: Since your online store is open 24/7, it means that your customers, from anywhere in the world, can purchase from you. Offering customers a trusted and secure payment acceptance method means you’ll be able to cater to more buyers while processing a larger sales volume.

• Enjoy a global reach: Online stores are accessed by millions of users worldwide. This means you do not have to be limited by geographic locations. However, since there may be payment differences across countries, it’s advisable to offer a broad range of payment options so that you catch every sale.

• More peace of mind due to secure transactions: Customer cardholder data is highly sensitive. That’s why many online consumers look for transparency and security in payment acceptance policies through encryption and other robust safety features.
  
  Offering a secure online payment gateway will boost trust in your business as a reliable provider. You can enjoy greater peace of mind while processing more orders and payments and reducing the risks of fraud.

• Recurring and one-time payment acceptance: Whether your business runs on a recurring billing model that accepts recurring payments or you offer one-time purchases, you need to give customers the option to pay for your products or services with convenience.
  
  When you enable them to pay from the comfort of their homes or even smartphones, you can enjoy greater speed in payment acceptance, which can help improve your cash flow.

Overall, these are some of the primary reasons to accept payments online through a secure online payment platform. These benefits should not be underestimated in ensuring you provide an exceptional, convenient, and safe online shopping experience.

How to choose the best online payment platform

If you are a merchant searching to accept debit card payments online or take advantage of credit card processing services, our recommendation is that you shouldn’t simply choose any payment service provider to help you process payments. There are essential criteria in choosing the best payment gateway for your online business.

Below, we explore each of these in more detail:

• Easy-to-use interface: Processing payments online, whether accepting local or international payments, should have an intuitive and easy-to-use interface. This applies both to your online customers and to you, the merchant. Complex, resource-heavy and cumbersome interfaces take away from the user experience and can result in abandoned carts. It means that your online business could lose out on valuable sales.
  
  In addition to the interface, you need to meet your customers where they are, which is on their smartphones. That’s why the interface should be compatible with smartphones and mobile-friendly, catering to a growing clientele who are shopping from their mobile phones.

• Quick setup: Many payment processing solutions require extensive coding and expertise to set up, which can take time or slow a business down. Since many small business owners may not have these skills and time resources, it’s essential that your chosen online payment solution offers a seamless and quick setup process.

• Integration and compatibility: The best payment gateways are also easy to integrate with your current website, ecommerce platform, or accounting software to ensure your business operations are efficient and your user experience is smooth.
  
  In some cases, certain payment gateway providers offer plugins or APIs for easy integration. It can also significantly reduce manual administrative tasks and mistakes that are prone to occur with manual information inputs.

• Ability to avoid downtime losses during peak periods: The payment provider you choose should also be able to handle large volumes of orders and credit and debit card payments.
  
  It is essential for peak sales periods such as Black Friday or intermittent sales your business may hold throughout the year. To relieve the pressure, you must ensure that your payment service provider will not falter when your business processes large quantities of sales.

• Multiple ways to accept payments: Accepting debit and credit card payments and digital wallets online is an excellent way to ensure your business catches as many sales as possible. That’s why you must ensure that your chosen payment systems can process multiple cards and payment acceptance methods for a smooth and convenient user journey.
  
  The last thing you want is to have spent countless resources and an exceptional amount of time to draw and convert a user into a customer. And all that only to have them reach your checkout page without the right payment method to cater to their needs.

• Manage funds in multiple currencies: The right payment solutions will also enable you to accept and manage funds in multiple currencies as you cater to an increasingly international clientele. The more currencies you accept, the higher your chance of boosting your online business’s cash flows.

• Security of transactions: Fraud protection and security in online payments are significant aspects of consideration. Your payment provider must be able to guarantee that transactions accepted through their systems will always be secure.

They should also guarantee that they follow the highest and strictest industry standards for fraud prevention and online payment security. For this reason, you should look for criteria such as PCI-DSS compliance and strong customer authentication (SCA) practices for added peace of mind.

• Transparent rates and fees: Many online payment platform providers charge both monthly fees and transaction fees in exchange for using their services. When you have to pay transaction fees, these are often expressed as a percentage of the transaction amount and as a fixed cost to the merchant.
  
  These payment processing fees are often simply out of reach for many small online business owners. You should also look out for hidden fees, such as in the event of non-usage of the platform or other criteria that could lead to prohibitive costs adding up significantly over time. Finally, look out for costly setup fees and determine if other providers do not charge these or keep the costs low.

• Instant settlement of funds: Ideally, you will receive the proceeds of your online sales in your merchant bank account. While many platforms come with the promise of settling your online sales payments in your merchant account on the following business day or even longer, other providers, such as myPOS, offer instant settlement of funds.

This means that you can access your money earned from online sales in real time and transact with it either through your merchant business card or online through your merchant business account.

• Support: Managing your payment processes should also be accompanied by 24/7 support from your chosen provider. It may seem like a secondary feature, but it is essential, especially if you need an instant answer or solution to a query.

• Analytics and reporting: Your payment process would not be complete without having the right data at your fingertips, easily accessible through a customisable dashboard, to help you make better business decisions. That’s why having analytics and reporting tools is another critical payment processing feature when choosing the right online payment platform.

With these criteria in mind, you can make a more informed decision that meets your business needs perfectly.

Which is the best online payment platform for small businesses?

Choosing among different payment processors and payment platforms leads us to the best online payment provider in the UK. myPOS is not just a payment gateway. It’s a comprehensive solution with no monthly fees, attractive transaction costs, a free merchant account and bank card, and instant funds settlement. 

There are many important reasons for choosing myPOS as a leading and popular payment processing company. One rationale is that it will keep your payment gateway charges to a minimum.

Catering specifically to small and medium businesses in the UK, myPOS understands that costs can quickly add up and become prohibitive for business owners. That’s why it offers both an affordable and seamless solution to ensure every business owner can remain competitive and make the most of their online business.

Setting up an online payment platform for your business using myPOS is simple, intuitive and affordable. All you need to do is get in touch with us and take it from there. The rest is easy.

Conclusion

Whether you are concerned about the costs of online processing fees or want to ensure that your online payment transactions are secure, you don’t need to look further for an online payment platform. 

myPOS is about helping businesses grow and your online business shouldn’t miss out on the opportunity to accept online payments with a leading industry provider. When you offer instant settlement of funds, secure transactions, excellent support and a host of other features, it’s time to take your online business to new heights.

Frequently Asked Questions

What are interchange fees?

Interchange fees can be either charged as a percentage or a fixed fee that merchants pay for every transaction made by their customers who make online payments.

What is a multi-currency payment gateway?

A multi-currency payment gateway enables online merchants to accept payments from international customers in a wide number of currencies while the merchant receives the payment in their local currency.

Is a payment gateway secure?

The right payment gateway should offer online merchants security through features that include two-factor authentication or multi-factor authentication, user activity monitoring, data encryption, privacy protection, PCI-DSS compliance and more.