Accepting Online Payments for eCommerce

In order to accept payments over the web we must use what is known as a 'payment gateway'. This joins our sales website with a bank account, and allows orders from the website to charge a credit card or other bank account.

There are several popular ways to allow your site to accept online credit card payments. Site owners can decide which ones of these to offer as options to customers.

Credit Card payment options:

  1. Through your bank. To accept credit card payments through your existing bank you need to set up an 'internet merchant bank account'. The bank incurs fees for this service: usually a setup fee of $200 - $400, monthly fees of $30 - $60 and a transaction fee similar to normal credit card transactions, 2.5% - 3.5%.
    Contact your bank for more information on fees and setup.

  2. Paypal. This is an online option that puts paid money into your Paypal account which can then be transferred to a normal existing bank account. Paypal is free to set up and charges no monthly fees, but typically charges 50c and 3% - 5% per transaction fee.
    Their fee structure is a little confusing - click here for paypal fees.

  3. Offline payments. Buyers complete the shopping cart transaction online but are then required to direct debit, send a cheque or make a credit card payment by phone. This requires no extra services to be set up online.

For a site with a low turnover the online payment systems of Paymate or Paypal work out better due to the lack of set monthly fees.

For a site with a large turnover or fewer, larger transactions, it usually works out better to have an Internet Merchant account with a bank.

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