E-Commerce: What You Need to Know About Setting Up Digital Payments

Learn the basics of how to get your online shop up and running with different payment methods, a merchant account, and a payment gateway.

In order to be able to sell products or services in your online shop, the first thing you need to do is make sure you’re able to charge and accept digital payments. No payment means no revenue. There are two tools you’ll need in place to do this that you may already be familiar with: a merchant account and payment gateway.

Each serves its own purpose, so you will need both if you’re running an online store. Plain and simple. A merchant account initiates the payment process and the payment gateway allows it to be completed. Setting up online payments is simple enough, but you’ll also want to give customers a couple of different payment options to meet varying preferences. Yes, it does raise the overhead cost slightly, but it’s negligible when having different payment methods bring in higher conversion rates.

Payment Methods

There are several common types of e-commerce payments, such as credit cards, PayPal, e-checks and such. It’s good to offer multiple options to accommodate different preferences.

In 2018, Statisa reported that Mastercard was the most popular form of online payment with three other major credit cards and Paypal hot on its heels.

How to Get Started

For a customer to complete an online payment, there needs to be a form to capture their information, a way to move the funds from their account, and a way for those funds to land in your business account. And it all needs to be secure.

Merchant Account

A merchant account is a halfway stop for all inbound payments being collected once a purchase has been made. Upon payment verification, the money is then sent to your business bank account.

One thing to note, a merchant account is not the same thing as a business bank account, as there’s no way to directly access a merchant account. It’s simply a mutual-grounds holding spot between the purchaser’s account and your business’.

So how do you choose the right merchant account? Consider cost, how easily it will connect with your current systems (each service should tell you up front which content management systems and such they can integrate with), and if it makes sense for your business or the future of your business, an ability to accept international payments.

Payment Gateway

A payment gateway transfers the funds from the merchant account to your business bank account after the funds have been cleared.

Unsurprisingly, you’ll want to be very careful with security. In fact, a 2018 Shape Security report found that around 90% of attempted logins to retailer sites were fraudulent — by far the highest percentage among sectors.

With that, you’ll want to be sure you’re using a high quality/high security payment gateway to protect your customers’ sensitive information and your online shop’s reputation for being trustworthy. Nothing prevents a customer from returning like their information getting stolen on a first purchase.

Some of the most popular payment gateways include Square, Stripe, ApplePay, etc. Depending on your business and your own preferences and budget, you’ll want to weigh your options and see which one has the most versatility for collecting payments. This is especially important if you sell anywhere else other than in your online shop, because it helps to keep everything streamlined.

Here’s a handy list of the eight best payment methods online retailers use for their shops to get you started.

Time to Start Selling

Now that you know what you need to research and which platforms to scout, it’s time to get your online shop running and open for business. Consider your budget, platform versatility, ease of integration, and the future of your business so you have flexibility to scale.


At FYIN, we help online retailers of all industries and sizes, from local restaurants to national enterprises, set up for online success. Contact us to learn more about how we can help your e-commerce get up and running.