You may be wondering if there’s an easier way to process payments than you were previously doing.
The number of people who use the Internet for banking has increased to 3 in 4 from 1 in 4 ten years ago.
While online payment systems may seem complex, at their core, they just make it easier for your members, customers, or donors to make their contributions.
As the technology of online payment services has evolved, human behavior has shifted rapidly. To reach all of your potential customers, donors, or members, offering an online payment option is now a necessity, no matter how big or small your organization is.
Our post will help you decode the jargon and navigate all of the options in implementing online payments, even though it may initially seem intimidating.
What is the need for Online Payment Services?
Unlike many small organizations, your organization primarily collects payments by cash or check. You and your supporters can benefit from adding online payments, even if you are using this method now.
Achieve the expectations
Paying online is becoming increasingly popular. It is important to them that signing up, registering for an event, or donating is as easy and fast as possible. It is considered out of date to have a website that does not accept online payments.
Increasing the speed of the process
Using online payments is quicker than cash payments because the check doesn’t have to be mailed or cleared. Payment can be made online, updated in your bank account, and the whole process can take seconds. As a result, your organization’s cash flow will improve, and you’ll be able to confirm transactions almost immediately. Participants will know if they have successfully registered for an event right away, and prospective members will not have to wait long to join your organization.
Make your life easier
In addition to saving you time, automated payments eliminate the hassle of registering payments manually. As long as you set up your website for online payments, these are automatically taken care of. Credit card information is not handled or stored by you. You are not responsible for updating member information.
Understanding the terminology used for online payments
Payments made over the internet are described by several terms that are almost interchangeable:
While they are distinct, with subtle differences, all are considered financial middlemen, a company that stands between your website and your customers, and between your bank accounts. It allows for the completion of online transactions, as well as payments made online.
Gateway for online payments
Payment gateways receive online payment requests on your website and transfer them to payment processors from there. It could be considered the digital equivalent of a POS machine at a grocery store where you insert your credit card.
Pay-processors are companies that validate a purchaser’s credit card information (for example, those of your members, donors, or supporters) and verify they have enough funds to cover the payment. An authorized transaction occurs when the customer’s account has sufficient funds to cover the transaction. A status message is sent to your website by the payment gateway once the transaction is complete. In addition to giving you equipment for accepting in-person payments, a payment processor company can provide you with a swiper.
Providing payment services
An internet payment provider (or payment processor) manages the payment gateway or payment processing services. Most will also provide payment processing services.
Services or systems for collecting payments
Depending on the features and pricing of the payment gateway, a payment provider may offer several types of payment systems. Paypal, as an example, is an online payment service provider with several payment services and systems such as PayPal Payflow Pro and PayPal Express Checkout (and here is a list of alternative online payment systems). After you finish reading this post, you will find reviews of several online payment systems.).
Account for merchants
You should also understand the concept of a merchant account. A successful online transaction transfers funds from the buyer’s account to your merchant account, a kind of bank account designed exclusively for holding funds received from credit and debit card transactions. Payment providers usually require that you set up a merchant account with them to accept online payments. Your organization’s bank account receives regular transfers from your merchant account.