When deciding to move your payment systems online, it is important to have an efficient knowledge of online payment systems and how using them may affect your business.

First, let us start with some key-phrases:

Automated Clearing House (ACH): With ACH, customers can make payments from their bank accounts to clear utility bills – cable, power, etc – and other types of bills.

Merchant accounts: Businesses receive payments via credit and debit cards with their merchant accounts. Merchant providers are required to obey regulations established by card associations.

Payment gateway: This acts as the middleman between the merchant and their sponsoring bank. It allows merchants to securely pass credit card information between the customer and the merchant and also between merchant and the payment processor.

Payment processor: This is the company that a merchant uses to handle credit card transactions. Payment processors implement anti-fraud measures to protect both the front-facing customer and the merchant.

PCI compliance: This is when a merchant or payment gateway sets their payment environment up in a way that meets the Payment Card Industry Data Security Standard (PCI DSS).

Using an electronic payment system has many benefits, but such systems are not without drawbacks.


• It is convenient and customers can easily make payments. This is important especially for e-commerce.

• You can integrate it with accounting software, making it easier to manage money.

• You don’t have to waste as much time depositing paper checks and cash at the bank.


• You have to pay a processing fee to accept plastic and some other electronic payments.

• If you use a traditional physical credit card terminal, monthly or annual fees might apply.

• Some payment processing services lock you into contracts that are costly to terminate early. This is most common with traditional credit card terminals.

On the cons side, these can all be easily negotiated when you seek out reliable payment processors/merchant account providers. Nevertheless, the advantages especially the ease of business, far outweigh the disadvantages and as a 21st century organisation, it is time to step into the era of digitalisation – if you are still stalling or hesitant.