Learn Which Payment Process Is Best For your Business

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Payment processing is probably the most intimidating element of the whole “selling online” puzzle when you’re just getting started. And that’s perfectly understandable.

After all, this is the part of the job – as you’re launching a new online store – where you start dealing with your customers’ financial info, such as credit card numbers, sensitive personal data, and etc. And as an eCommerce store owner, it’s your full responsibility to make sure that your customers’ data is kept safe above all else.

Luckily, payment processing isn’t that difficult to figure out once you start looking into it. For the most part, the difficult heavy lifting is handled by other companies so that you can focus on the core of your business. But we’ll get to that…

In a hurry? Here’s a summary of the key differences between payment processors, payment gateways, and merchant accounts:

Payment gateway

connects your eCommerce store to the payment processor; sends a transaction request to the payment processor

Payment processor

processes the request from the gateway and executes it – takes the money from the customer and deposits it in your merchant account or an account managed by a third-party

Merchant account

this is where the funds get deposited after a successful transaction; merchant accounts are optional, you don’t need to have one as an eCommerce business


When does payment processing come into play?

The core items you’ll need to get as an eCommerce professional include the following:

  • 📛 A domain name (such as xyzbusiness.com)
  • 🏗️ A quality eCommerce website platform (like WordPress, Shopify or BigCommerce)
  • 💻 Quality (not just the cheapest) web hosting (hosting is included with platforms like Shopify, but not with systems like WordPress/WooCommerce)
  • 💳 A way to accept payments from customers – aka. payment processing

That last part is what we’re going to discuss today.

The first surprising thing about payment processing is that it works kind of independently of your eCommerce store. It’s basically a whole separate thing/system that only gets activated when your customer is ready to pay.


How all three work together

Here’s how the magic happens when a customer places an order in your eCommerce store and then proceeds to pay for it:

Once the customer has picked a product and is ready to pay, each of the three elements handles its own unique task:

  • The payment gateway takes care of sending the transaction request to the proper payment processor or credit card company issuer.
  • The payment processor, as you would expect, processes the payment – making sure that it’s submitted correctly, that the customer has funds at their disposal, and that all the payment details have been submitted correctly.
  • The merchant account is where the funds get deposited when the processing ends successfully.

It essentially all goes from payment gateway → payment processor → merchant account.

While I’m at it, it’s also good to keep in mind that in some setups, all three elements are hidden under one umbrella company. In other words, the store owner doesn’t usually have to deal with three separate entities individually, but can instead work with a single company that acts as all three.

A quick list of the top payment processors

There’s an abundance of payment processors to choose from, but we’ve narrowed it down to just the very best:


PayPal can be directly integrated with your website, and because of its familiarity with customers all around the world, it’s highly trusted. The flexibility of PayPal is truly great. You can process payments not only via your eCommerce store but also inside an app and even in your physical store.



Stripe describes itself as “developer-centric” and it’s a very fitting term as Stripe’s biggest advantage is how customizable it is. Stripe’s API allows you, or your developer, to experiment and create an experience that fits your business perfectly.

Stripe is available in 20+ countries and lets you accept more than 135 different currencies! This means that you can charge your customers in their local currency while still receiving funds in yours.



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Square is a fantastic option for a store looking to sell online as well as offline.

Square offers a range of devices you can set up in your physical store, from simple clip-on magstripe readers that you put on your phone, to contactless mats, terminals, stands, and even full registers.

Square is also incredibly intuitive and easy to understand for beginners. Its point of sale system (which is free) is the real added benefit. Advanced features such as digital receipts with integrated feedback forms, card splitting costs, as well as inventory management for tracking stock are all free.



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