In our previous chapter of this module, we got a basic understanding of what payment gateways are and how they work. Also, we highlighted some of the key aspects that you need to keep in consideration when choosing the right payment gateway.
As someone who is starting an eCommerce business, it is also crucial to understand how to set up payment processing for your eCommerce store. What are the aspects that you need to keep in consideration and how to ensure seamless integration?
In this chapter, we are going to discuss this in detail. Here, we are going to find out the step-by-step guide that you have to follow for setting up payment processing.
When you start an eCommerce business, setting up payment processing is one of the most important steps. It allows you to accept money from your customers. This chapter will guide you through the process and help you understand how to integrate payment options easily.
So, let us start with our chapter and find out how can you set up payment processing for your eCommerce business.
Payment processing is a system that handles transactions between your online store and the customer. It ensures the money from the customer reaches your account safely.
Imagine you run a small eCommerce store selling custom t-shirts. When a customer buys a t-shirt, they need to pay using their credit card or digital wallet (like PayPal or Google Pay). Payment processing makes sure the money moves securely from their bank to yours.
Most eCommerce platforms like Shopify, WooCommerce, Adobe Commerce, or BigCommerce have built-in support for payment processors. It’s just a matter of connecting your store to a payment provider.
Choose a Payment Gateway
This is the service that connects your eCommerce store to the customer’s bank or card provider. Common examples include:
Set Up Your Payment Gateway Account:
Connect the Gateway to Your eCommerce Platform:
Test Transactions: After setting up, always perform test transactions to make sure everything works. Most platforms have a “test mode” for this purpose.
Let’s say you are using Shopify and want to integrate Razorpay as your payment processor.
This whole process usually takes less than an hour, but it’s crucial to test everything to avoid payment issues when real customers try to pay.
Offering multiple payment options makes it easier for your customers to pay. Some customers might prefer credit cards, while others might want to use digital wallets or even cash on delivery (COD).
Imagine you are selling handmade jewelry, and you offer only credit card payments. One of your potential customers prefers to use PayPal because they don’t want to enter their card details. By not offering PayPal, you might lose that sale. If you also offer UPI, you can target customers from India who prefer UPI over cards.
Each payment gateway charges fees for processing transactions. These are typically a small percentage of the sale and sometimes a fixed fee per transaction.
Let’s say you sell a product for ₹1,000 and your payment gateway charges 2% per transaction. That’s ₹20 per sale. If you know that cost, you can price your product slightly higher, like ₹1,020, to cover the fees.
Security is crucial when handling payments. Customers trust that their personal and payment details will be protected. The best way to ensure this is to use a PCI-compliant payment gateway. This ensures your payment process follows strict security standards.
All major gateways like Stripe, Razorpay, and PayPal are PCI-compliant, meaning they follow strict guidelines to keep customer data safe. We are going to know about this in more detail in the next chapter.