What is payment acceptance?
The term “payment acceptance” has two meanings.
First, it is the process of accepting payments online or offline.
The second definition is the share of successful payments out of all attempted payments. In this case, people also use the term “authorisation rates” when referring to card payment acceptance.
Here, we’ll focus on the first definition, as it is much broader and more looked for than the second one.
How to accept payment offline?
The simplest and oldest way of offline payment acceptance is using cash. If you’d like to handle in-store transactions of a small business, cash is probably the only option you need. For larger businesses, dealing with piles of cash may be inconvenient, unsafe, and costly. Besides, people worldwide increasingly go cashless, switching to other payment methods. For example, in the US, only 29% of adults say cash is their preferred payment option.
Another way of accepting payments in-store is via bank cards or NFC devices and POS terminals. Most terminals require an internet connection for work, but there are plenty of solutions that can work in an offline mode while the connection is unstable. For this type of payment acceptance, a business owner has to work with a bank or payment service provider that offers POS devices.
How to accept payments online?
Accepting payments online is much more diverse. There is a myriad of online payment options that enable businesses to accept payments, both local and international ones. For this, working with a bank is not enough for a merchant. They’ll need the help of an online payment service provider.
Who is the payment provider?
Payment service provider, payment provider, payment vendor, payment processor, or gateway are all similar things. These are the intermediaries between merchants, banks, and customers, who enable the transaction processing. They’re neither the owners of the transactions nor the end beneficiaries. They help merchants with accepting payments online by providing necessary software, opening a merchant account, and handling transaction processing. Merchants can only provide customers with the online payment options that their payment providers support.
The most popular ways of accepting payments online
- Bank cards. One of the appealing things about bank cards is that they can be used for online and in-store payments. Besides, this payment option is convenient and secure if the store and the cardholder take care of all necessary safety measures. Over 2 billion cards are currently used worldwide, making it a very popular e-commerce payment method. A merchant needs to work with a bank or payment provider to accept credit and debit cards, and each transaction will cost the business owner a fee.
- Mobile payments. Being able to pay with a mobile device grows vital for customers globally, getting used to mobile shopping and instant payments. When purchasing on mobile, customers commonly use mobile wallet solutions like Apple Pay or Google Pay or other payment apps like PayPal, Zelle, Venmo, Alipay, etc. It’s convenient because their payment details are already safely tokenised, allowing them to pay quickly without needing manual data entry. That’s why mobile payments are so popular — the industry generated $1,3 trillion in revenue in 2020 and was expected to reach $1,7 trillion in 2021.
- Alternative payment methods. There are plenty of other payment options, from direct debit, electronic checks, and ACH payments to cryptocurrency payments, each with specificities. Accepting payments with alternative methods requires a merchant to work with payment service providers. But don’t get caught in a trap of connecting dozens of payment methods - research your audience’s preferences first and select a few they would like to use.
- Invoicing. For some business models, invoicing is a way to go with online payments. It is when the merchant prepares an invoice and sends it to the customer for payment. Some payment providers support creating invoices and sending them to customers through the provider’s dashboard.
- Recurring payments. Usually, recurring billing is used in the subscription-based business model. Different payment methods can power it, but most commonly, it’s a bank card or a mobile wallet with a bank card tied in. A merchant sets the payment calendar, and the shopper only has to enter their payment details once to confirm the subscription. All further payments will be made automatically until the user decides to unsubscribe from the service.
How Corefy can help
If you’re only starting the journey of online payment acceptance, you’ll unlikely need a solution like ours. But once you start looking for more ways to accept online payments, you’ll discover that having just one payment provider is not enough to cover all the needs of the growing business, especially if you plan international expansion.
You’ll start working with multiple payment providers, which is when the need for new payment processing features, optimisation opportunities, and unified management and analytics occurs. It is precisely what we do at Corefy, backed up by offering our payment industry expertise as a service. If you’re already on this step of your journey, get in touch with us and let’s build an optimal payment setup for you.
Ready to boost your business to the next level?
Get in touch with us and we will try to provide you with the most relevant offer.