B2B payments part 3: Your guide to ecommerce payment processing

In this series, we’ve covered B2B payments in general and different forms of online payments. While included under the umbrella of online payments, ecommerce payments are specific to online stores and marketplaces.

For the most part, ecommerce payments are made by securely capturing customer credit card or bank account information online, encrypting the data, and sending it through a process that transfers the funds from the customer to the business.

In this post, we’ll discuss the components of ecommerce payment processes, how they work, and how to set one up for your online business.

  1. What is a payment gateway?
  2. What is an ecommerce payment processor?
  3. Common ways to set up ecommerce payments
  4. Checkout flow and cart abandonment
  5. How to integrate payments with an ecommerce website
  6. Security with payment processing

What is a payment gateway?

A payment gateway is the area of your site that collects payment information. Essentially, when the customer hits “Checkout,” they go from the shopping cart to the payment gateway. 

Gateways can be coded into your ecommerce website or you can contract with a gateway provider, like Square, 2Checkout, or PayPal.

Regardless of whether you build your own or use a third-party provider, the gateway must encrypt the customer’s information so it can securely pass it on to the payment processor. Failure to do so opens your site up to fraud and theft of customer data.

What is an ecommerce payment processor?

Ecommerce payment processors go between your site and the customer’s bank or financial institution. There are three key steps for payment processing:

  1. Verifying payment details
  2. Ensuring adequate funds
  3. Approving the transaction

Common ways to set up ecommerce payments

There are several ways to handle ecommerce payments. Some of the most popular are:

  • Ecommerce websites
  • Online marketplaces
  • Mobile wallets
  • Social media shopping
  • Cryptocurrency
  • Third-party payment APIs

You’ll need to consider what makes sense for your business as well as the payment methods your customers expect. 

How you sell goods and services also plays an important role in deciding which methods to use. If you’re selling on a site or through a marketplace, you’ll need to collect payments through the checkout portal. If you’re selling goods in person, mobile wallets make payments easier to accept.

Checkout flow and cart abandonment

The checkout process is a key part of the customer experience. It’s important to make sure your online shopping environment:

  • Displays prices clearly
  • Calculates taxes correctly
  • Processes the types of payments your customers use
  • Securely collects payment information
  • Collects only the necessary data
  • Doesn’t include any extra or unnecessary steps

While some level of cart abandonment is normal, a high cart abandonment rate is usually an indicator that something is wrong. A slow, broken, inaccurate, or otherwise inefficient process can lead to dissatisfied customers who abandon their carts. 

How to integrate payments with an ecommerce website

Marketplaces, such as Amazon, Esty, and Facebook typically handle the entire purchase experience, including shipping and sales tax calculation, via their own payment gateways and processors.

Site builders, like WordPress and Squarespace, often contract with specific gateways and processors to provide plug-ins, making ecommerce payments simple and straightforward to include with your site.

If you’re creating your own custom site, you can either build your own gateway and incorporate a payment processor or use third-party providers for your entire shopping cart experience. Most payment processors also provide gateway services, so you can use the same company to handle both the collection and processing of ecommerce payments.

Security with payment processing

The value of securing your ecommerce payment system cannot be overstated. You don’t want to open your business up to fraudulent actors, nor do you want to compromise the safety and security of your customers. In addition to losing business, an improperly secured site could open you up to liability.

Businesses of any size that collect, transmit, or store customer payment information must abide by Payment Card Industry security standards — and ensure any third parties they work with do as well.

To give you an idea of the security expectations, some of the security measures include the examples we covered in part 2 of this series:

Encrypted data

Look for SSL (secure sockets layer) or TLS (transport layer security) protocols, which prevent bad actors from accessing payment data while it’s in transit.

CVV check

If you accept credit cards remotely or online, make sure you require the card verification value (CVV) — those three or four digits printed on the card. It ensures the person making the payment has the physical card with them.

Fraud monitoring

You or your payment vendor can set rules and triggers based on common fraud activity. When detected your system can either reject the transaction or require manual approval.


Tokenization is a form of data protection. It de-identifies transaction information for transit, using a random string of numbers that can be decrypted by the intended recipient using a valid key.


Ecommerce payments are becoming an increasingly necessary part of doing business. With remote sales continuing to grow, and the immediacy customers have come to expect, relying on traditional payment methods can put you at a competitive disadvantage. 

Meeting customers where they are both in terms of how they shop and how they purchase will help keep your business relevant and promote growth.

But it’s important to build your capabilities responsibly. Use trusted vendors, implement secure platforms, and safeguard your customers’ data.

This is the third of a three-part series on B2B payments. Read the first two installments: 

B2B payments part 1: Overview of B2B payments solutions

B2B payments part 2: Accepting online payments

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