Starting Your Web Store – How to Receive Payments Online


A very important step when starting your web store is to ensure that you can receive payments online. You’ve created your web store because the online retail channel means that your customers can buy 24/7 from anywhere. However, your web store is not the only one online. So, if you customers have problems to pay for your products, they will leave your site and try elsewhere.

Let’s have a look how you can receive payments online.

How to receive payments online

The way we buy and pay for our products has evolved with the internet. As a result, there a number of ways your customers can choose to pay for your product online.

  1. Credit cards

For online shoppers, the preferred method of payment is still a credit card. Accordingly 42% of people are making online payments using credit cards. Also are Visa and MasterCard the two most popular card scheme brands. The use of credit cards for online payments is popular because of the following:

  • Credit cards have already been in use for decades in offline trading.
  • Credit cards are available and accepted worldwide.
  • To pay with a credit card is simple – it involves entering the credit card number along with the name of the card owner into a form.
  • Credit cards are generally convenient for the buyer.

There are however some disadvantages when receiving payments online via credit cards:

  • Credit cards do not possess a good security mechanism. If an attacker steals a credit card number, it is sufficient to buy products online.
  • Credit cards are not anonymous. When a product is purchased, the owner of the credit card and its number become known to both the seller and the banks involved in the transaction.
  • It is expensive for web store owners to receive online payments via a credit card. Credit card institutions and banks require the seller to pay relatively high basic charges as well as a percentage of sales to them.
  • Credit cards are not suitable for payments between private individuals.
  1. PayPal

PayPal is a credit card-oriented payment system. In contrast with credit cards, makes PayPal payments between two private individuals possible. In order to be able to use PayPal, it is necessary to register with it. The receiver of a transaction pays PayPal a fee which depends on the turnover. This is deducted directly from the amount received. However, web store owners need to monitor their PayPal accounts closely.

“While making payments via PayPal is fairly simple, receiving payments is where things get a bit more complex. This has to do with South Africa’s exchange control regulations, which state that you cannot hold money paid to you in foreign currency for more than 30 days. You also cannot use foreign currency that is sitting in your PayPal account to pay to another PayPal user” according to Maya Fisher-French of “Maya on Money”.

  1. Electronic funds transfer (EFT)

EFT is the electronic transfer of money from one bank account to another. It is also one of the oldest electronic payment systems. EFT is considered to be a safe, reliable, and convenient way to conduct business. The advantages of EFT include the following:

  • Reduced administrative costs
  • Increased efficiency
  • Simplified bookkeeping
  • Enhanced security

One concern with the use of the EFT payment system is that criminals may fax or email you a fraudulent proof of payment certificate. So, when you complete that transaction, you may discover that the funds are not showing in your bank account. The best way to prevent this fraud is to wait for the funds to show in your bank account before delivering the goods.


Although there are many innovative digital payment methods and systems known, credit cards, PayPal and EFT are the most important one to have when you start doing business with your web shop. Remember that there are costs and risks involved to receive online payments. However, without it – well…?

Remember, you need a well researched and written Business Plan to get your business off to a good start!

Read also: 7 Steps to Start an Online Business


Meier, A. and Stormer. H. 2009. eBusiness & eCommerce: Managing the Digital Value Chain, Springer-Verlag Berlin Heidelberg.




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