How to create an online payment system for small business

The online payments ecosystem is vast, and it can be intimidating for a new business owner. When looking for the best online payment system for a small business, you're bound to come across some names you recognize as well as a few you don't. We've created a simple guide to online payment systems for small businesses, breaking down the basics and providing you with all of the information you need to set up an online payment system.

How does an online payment system work?

To begin, what exactly is an online payment system? It's straightforward. Online payment systems are a method of accepting payments for goods and services over the internet. These systems are made up of three components: the payment gateway, the payment processor, and the merchant account, which handles the entire transaction. Here's a little more information about these aspects of small business online payment systems:

Payment gateway – 

A go-between for credit card companies and payment processors. The online payment gateway essentially manages the technical aspects of cardholder data transfer, ensuring that the transaction is completed quickly and securely.

Payment processor – 

A third-party company that oversees the card transaction process. The payment processor will communicate your customer's card details with your bank and their own bank, and the payment will be processed if there are sufficient funds in the account.

Merchant account – 

A type of bank account used by businesses to accept credit/debit card payments. You won't be able to accept these types of payments unless you have a merchant account, which is why new businesses should open one as soon as possible.

These three components of your online payment system work together to complete the transaction from start to finish, withdrawing funds from your customer's bank account and depositing them in your business's merchant account.

Types of online payment systems

Customers can make payments online using two methods: credit/debit cards and Direct Debit. If you accept credit/debit cards, you can either build your own online payment system (which includes setting up the payment gateway, payment processor, and merchant account) or outsource to a third party. If you use a third-party payment provider, they will handle the entire transaction on your behalf. Furthermore, the burden of PCI DSS compliance will be lighter because your company will not come into contact with any financial data.

Then there's Direct Debit (an automated payment method that allows you to take payments directly from your customers' bank accounts). Again, you have the option of collecting Direct Debit payments in-house (to do so) or outsourcing Direct Debit payments to a third party who will handle payment collection on your behalf. SifiPay is one of a number of Direct Debit payment providers to choose from.

Create an online payment system: step-by-step

Now that you know a little bit more about online payment systems, let's look at how you can set one up for your company. If you do not want to use a third-party online payment system, you can create one yourself by following these steps:

Consult an expert to ensure that all coding, security, and compliance issues are addressed correctly.

Create a hosting platform and obtain a Secure Socket Layer (SSL) certificate.

Create the payment form/page.

Find a payment processor that allows you to process various types of payments, such as credit and debit cards and Direct Debit.

Link your payment processor/merchant account to your payment page.

Conquering online payments with SifiPay

Direct Debit may be the most suitable online payment method for small businesses. SifiPay can handle the entire payment collection process for you, ensuring that your company gets the money it needs when it needs it. Furthermore, SifiPay is simple to integrate with your existing payments workflow – whether you're using any system – and the SifiPay API allows you to tailor your online payment system to your exact needs.