By Henry Williams on Small Business UK - Advice and Ideas for UK Small Businesses and SMEs
It’s now easier and more affordable than ever to set up an ecommerce website and start taking payments online.
You can create a website and reach millions of customers in minutes, who can then make a purchase at the click of a button.
But what exactly do you need to take payments online? How do you set up online payment systems? And what are the online credit card processing fees?
There’s a dizzying variety of ways you could accept online payments, due to the countless combinations of platforms and processors you could use. To make things easier, we’ve decided to focus on what we think are the easiest and most affordable options for small businesses.
How to take payments on a website: payment processors
In order to take payments on a website, you need to either be registered with a payment gateway and a merchant account, or to be registered with an all-in-one online payment processing solution like PayPal, Stripe, or Square.
As a small business, for ease, we’d recommend using an online payment gateway. This avoids you having to go through the application and approval processes, and negotiating fees, with separate payment gateway and merchant account providers.
To sign up with a payment processor, just visit their website, create an account, provide some basic info about your business, and (pending approval) you’re ready to go. Unlike the payment gateway and merchant account option, you generally won’t be tied into a long-term contract with a or be charged monthly fees.
Take payments online using a website builder
Taking payments on Squarespace, Wix, Shopify or any other website builder couldn’t be easier. Website builders generally have payment processing and checkout functionality built in, and integrate with numerous payment gateways. All you have to do is:
- Step 1 – sign up for an ecommerce plan with your website builder of choice
- Step 2 – create your online store using a template with product listings and a checkout page
- Step 3 – enter ‘settings’ and connect a compatible payment processor (e.g. Stripe, PayPal, Square)
- Step 4 – start taking payments
Alternatively, Shopify has its own fully integrated payment gateway, Shopify Payments, which eliminates transaction fees from third-party providers.
Commerce plans for the likes of Wix (£13-£22 per month) and Squarespace (£20-£30 per month) are much cheaper than Shopify (£20-£220 per month), though the latter does distinguish itself with more advanced sales features.
Taking payments on a WordPress website
The easiest way to take payments online if you set up your website using a content management system (CMS) like WordPress is to use one of WP’s own e-commerce plugins, such as WooCommerce.
Like Shopify, the WooCommerce payment gateway’s fully integrated into the CMS, and allows you to accept payments in more than 135 currencies. You can download and install WooCommerce Payments for free and at no monthly cost.
Using a CMS to take payments
Using a CMS like Magento or OpenCart is another popular way to build an ecommerce site.
These open source platforms are excellent if you want the freedom to create a bespoke online store, but they do require serious time, energy and coding skills, and you (or a developer) will have to manually create the checkout and payments functionality.
Online credit card processing fees
Fees vary between payment processors and website builders, so it’s worth shopping around for the most competitive rates. To help you understand how your fees might break down, we’ll look at a variety of examples.
Squarespace and third party payment processor
If you’re signed up with any Squarespace Commerce plan, you won’t be charged any transaction fees (though you’ll be charged 3% if you use the Business plan), but you’ll still be charged a payment processor fee. If you use Stripe, for example, you’ll be charged:
- European debit or credit card – 1.4% + 20p,
- Non-European cards – 2.9% + 20p
Shopify Payments
Using Shopify Payments eliminates additional third-party fees. You’ll just pay a single processing fee per transaction, which varies depending on your plan.
| Plan | Basic | Shopify | Advanced |
| Online Credit Card Rates | 2.2% + 20p | 1.9% + 20p | 1.6% + 20p |
| Additional fees for using another payment provider | 2% | 1% | 0.5% |
WooCommerce Payments
As a UK-based business, you’ll pay for the following fees for accepting card payments through WooCommerce payments:
- European debit or credit card – 1.4% + 20p
- Non-European cards – 2.9% + 20p (+2% if the customer’s currency is different to the deposit currency).
Next steps
So there you have it: taking payments online can be as easy as registering with an online payment processor and creating an online store using a website builder template. Don’t be bewildered by choice. Just take some time to research how each online payment setup would work for your business and choose the most appropriate option.
See also: Five tips to get started taking card payments
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Henry Williams, Khareem Sudlow
