How to Set Up Online Payment For Small Businesses (Get Paid Faster)

Setting up online payments is a key foundation for running a modern business. Nearly two-thirds of adults globally use them, and in the US, that number is 89%, according to Statista.² People have come to expect fast, reliable pay methods, and most notice when the process gets in the way.

Customers expect flexible ways to pay. Suppliers expect faster, more reliable ways to get paid. And if your payment system is clunky or confusing, you risk losing both.

This guide will explain what you need to know to set up an online payment system that works for your business today while providing flexibility for future growth. We'll also discuss the Wise Business account. The global account that can help your company with all things cross-border.

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What Is an Online Payment System?

An online payment system is the technology that allows businesses to accept and send payments electronically. It replaces manual processes like cash payments, paper invoices, and wire transfers with faster, more secure transactions.

For small businesses, setting up online payments is often one of the first steps toward improving cash flow and building a more professional operation.

An online payment system handles two main types of transactions:

• Incoming payments from customers through online checkout pages, mobile apps, invoices, or payment links
• Outgoing payments to suppliers, contractors, or service providers, often across different platforms or currencies

In practice, online payment systems show up in everyday business activities like:

• A checkout form on your e-commerce website
• A digital invoice sent to a client
• A subscription payment link
• A supplier payment made through an online platform

A strong system should feel seamless. It should keep payments moving on time and make tracking what’s coming in and out easier. With the right setup, managing money across currencies and platforms feels far less complicated.

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Save Time and Hassle With Wise Business

Wise is not a bank, but a Money Services Business (MSB) provider and a smart alternative to banks. Wise makes it easy to send, hold, and manage business funds in currencies. You can get major currency account details for a one-off fee to receive overseas payments like a local. Simply add the local account details when billing international customers to receive international payments with no fees.

Account opening is 100% online, with no need to visit a branch or book appointments.

Once you’re set up, you can connect to software such as Wave, FreshBooks, and more. You can also withdraw funds from Stripe without currency conversion fees.

Open a Wise Business account online

Some key benefits of Wise Business include:

Major local account details to receive international payments with ease No monthly account fees just a simple one-off fee for account details Receive payments from e-commerce platforms such as Amazon or via Stripe. Free invoicing tool to generate and send invoices. Create invoices using the Wise invoice generator or invoice templates. Accounting integrations, including a QuickBooks Bill Pay connection. Bill payments will be synced, matched, and categorized in QuickBooks for simple reconciliation. BatchTransfer. Fast payment of up to 1,000 people.

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How Online Payments Work

On the surface, online payments seem instant. A customer clicks “Pay Now,” and the transaction is complete within seconds. But behind the scenes, a lot happens to verify the payment and move the funds securely.

Here is how the process typically works:
1. Payment initiation: The customer chooses to pay and enters their payment details through an app or online checkout page.
2. Data capture: The payment gateway encrypts the customers’ information and securely sends it to the payment processor.
3. Authorization: The payment processor contacts the customer’s card issuer or bank to request approval. The bank checks the card’s validity, available funds, and possible fraud risks before sending back an approval or decline.
4. Settlement: Once approved, the transaction amount is moved from the customer’s account to the business’s merchant account. Funds are usually settled in batches at the end of the business day and transferred to the business’s regular bank account.

Security and regulatory standards are built to protect sensitive data throughout this process. Technologies like encryption safeguard payment information, and businesses that accept online payments are expected to comply with requirements such as PCI DSS.

The Key Components You’ll Need

Setting up online payments is not just about connecting a bank account and calling it a day. A complete system has a few important parts that work together to move money securely between you and your customers or suppliers.

Here is what you need to know about the core pieces.

Payment Gateway

The payment gateway acts as the front door of your online payment system. It captures your customer’s payment information and passes it along securely for authorization. Think of it as the digital version of a card reader at a checkout counter.

When setting up an online payment gateway, prioritize ease of integration with your existing sales tools. From there, check that it offers strong security features and built-in fraud protections. A good gateway should feel invisible to the customer but reliable behind the scenes.

Merchant Account

A merchant account is a special type of bank account that temporarily holds the funds from card payments before they are transferred to your regular business bank account. After a transaction is authorized, the money moves into the merchant account, where it stays until settlement is complete.

Some payment providers bundle the merchant account and gateway together, while others offer them separately. If you’re choosing your merchant account, look for one with clear fee structures and flexible settlement times.

Payment Processor

The payment processor connects all the pieces behind the scenes. It sends the transaction information from the gateway to the customer’s bank for approval, handles settlement, and ensures the funds eventually land in your account.

Choosing a reliable processor can make all the difference in payment speed and support when issues come up. Rest assured that they're also responsible for keeping transitions secure and ensuring your system meets industry requirements like PCI DSS.

Beyond these core components, there are optional tools that can make managing online payments even easier. Depending on how your business operates, you might also want:

• Invoicing apps: Let you create and send digital invoices with built-in payment links
• Mobile POS systems: For businesses that accept payments on the go
• Subscription billing platforms: For managing memberships, recurring services, or installment payments

Choosing the Right Payment System for Small Businesses

Choosing the right payment system isn’t just about finding the cheapest option or picking a brand you recognize. It's about finding a system that fits your business's current needs and allows it to grow.

Here are the key things to look for when comparing payment systems for small businesses.

Cost Transparency

Many providers advertise low fees upfront, but the actual cost often varies based on how often you get paid and the types of transactions you process.

Look closely at:

• Transaction fees (percentage plus fixed fee per sale)
• Monthly fees (some providers charge a flat subscription fee)
• Additional charges (may apply for certain features, such as handling chargebacks or converting currencies)

Flexibility

Not all payment systems are built to grow with you.

A flexible system should:

• Handle both small transactions and larger, high-volume periods
• Support multiple payment methods (credit cards, ACH transfers, digital wallets)
• Offer features you can add later, like subscription billing or international payments.

Security

Security cannot be an afterthought.

Look for providers that:

• Are fully PCI DSS compliant
• Use strong encryption standards
• Offer built-in fraud prevention tools like address verification and CVV checks.

Integration

A good payment system should work seamlessly with the other tools you already use.

Look for easy integrations with:

• Your POS system (for physical sales)
• Your e-commerce platform (like Shopify, WooCommerce, or BigCommerce)
• Your accounting software (like QuickBooks or Xero)

This will reduce manual work and make it easier to track your cash flow accurately.

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There are dozens of providers on the market, but here is a quick look at a few popular options for small businesses:

Provider	Pros	Cons
Stripe	Strong API for custom setups, supports many currencies and payment methods, suitable for scaling.	Can be complicated for businesses without technical resources.
PayPal	Easy setup, trusted by consumers, good for quick online sales.	Higher transaction fees, limited customization.
Square	Great for in-person payments and small retailers, with straightforward pricing.	Limited international payment options.
GoCardless	Focused on recurring and direct debit payments, with lower fees for bank transfers.	Not ideal for one-time card transactions.
FreshBooks	Built-in invoicing and payment links are great for service businesses.	More limited payment method support compared to larger gateways.

How to Create an Online Payment System Step-by-Step

Setting up an online payment system may sound complicated, but breaking it down into clear steps makes the process much easier to manage.

Here’s how to create an online payment system that fits your business and sets you up for smooth, secure transactions.

1. Pick Your Platform

Start by choosing the core tools that will power your system.

At a minimum, you’ll need:

• A payment gateway to capture customer payment details
• A payment processor to handle approvals and move funds
• Optional tools like invoicing software or a mobile POS system, depending on your operation.

Some providers, like Stripe or Square, package these tools into one platform. Others may require you to assemble your setup.

2. Set Up Your Merchant Account or PSP

Next, decide how your business will receive funds.

You have two main options:

• Merchant accounts, set up through banks or specialist providers, offer more control but can take longer to arrange.
• Payment service providers (PSPs) like PayPal, GoCardless, and Stripe offer faster setup with fewer moving parts, which suits many small businesses.

3. Integrate the Payment System

Once your platform is in place, it needs to connect to wherever payments will happen, like your website or point-of-sale system.

Look for systems that support:

• Built-in plugins for e-commerce platforms
• Mobile POS hardware for in-person sales
• APIs for more tailored integration

4. Set Up Security Basics

Every part of your system should protect customer payment data.

As you build it, make sure to:

• Use SSL certificates to encrypt transactions on your site
• Choose providers that follow PCI DSS standards
• Turn on basic fraud prevention tools, like CVV checks and address verification

5. Test Your System

Before going live, make sure everything works as it should. Run a few test payments using different methods, confirm refunds are handled properly, and check that transaction data flows into your accounting tools or reports.

6. Launch and Monitor

Once everything is running, keep an eye on performance.

Make sure to monitor:

• Which payment methods are being used
• Settlement timing and transaction fees
• Any failed payments or chargebacks

Best Practices When Setting Up Online Payments

Getting your payment system live is just the beginning.

To make the most of it, you must focus on the details that shape how people interact with it and how well it performs behind the scenes.

Offer Multiple Payment Methods

Customers expect options. Cards still dominate, but digital wallets like Apple Pay and Google Pay are quickly gaining ground. They accounted for 50% of global online purchases in 2023, which is expected to reach 61% by 2027.¹

Depending on your business, supporting ACH bank transfers or other regional payment options may also make sense. Offering flexibility removes friction and helps more customers follow through at checkout.

Put Strong Fraud Prevention in Place

Protecting your business from fraud doesn’t need to involve complex tools. Many payment providers include key protections by default; you must ensure they’re enabled. That includes address verification (AVS), CVV checks, and basic data encryption.

Simple checks like these can make a big difference in avoiding chargebacks and spotting suspicious activity early.

Make Sure It Works on Mobile

Mobile-first design is quickly becoming the standard for customers. If your payment process doesn’t load properly on a phone, you’ll lose some of your sales without realizing it. Test your payment pages and forms on different devices to ensure they’re responsive and easy to use without zooming or pinching the screen.

Review Payment Data Regularly

Once your system is running, the data it generates can tell you a lot. Look at how people are paying, where drop-offs happen, and what days or times see the most activity. These trends can help you adjust your pricing, rethink your checkout design, or catch technical issues that only show up in live use.

Conclusion: A Smarter Way to Handle Payments

Digital payments are now part of everyday life worldwide, and online payment systems have adapted. They can be seamlessly integrated with current tools and offer a great deal of functionality. Having the right online payment system ensures that your business is collecting revenue without allocating a large amount of resources to manage the process.

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Sources:

1. Online Payment Statistics | Electro IQ
2. Digital Payments Statistics in 2025 | Ecommerce Tips