How to set up an online payment system for your e-commerce business

Every week in South Africa, over 50% of internet users are shopping online – and 51.7% of e-commerce purchases are made via mobile phones. Additionally, while cash payments remain prevalent, South African consumers are gradually changing their payment preferences to lean toward digital and instant payment methods, which meet their growing demand for more seamless experiences.  

Leaders at growing e-commerce businesses have a lot to manage and often don’t have full time staff focused on payments. However, they know they need to offer online payments with the methods customers prefer to use, in order to future-proof their businesses and ensure continued growth. 

This blog will walk e-commerce leaders through the basics: what online payments are, how they work, how they help businesses grow and what you need to do to start processing them.

What online payment options are available today?

Online payments, or digital or electronic payments, are simply payments made via a website. An extension of this is mobile payments which can also be made via an app. If positive and seamless, the online payments experience can be leveraged as a differentiator to enhance the customer’s overall experience with greater flexibility and control over how they pay. 

Some ways to ensure a differentiated payments experience include:

• Offering a selection of popular payment methods
• Ensuring a seamless and friction-free payment experience
• Ensuring payments are reliably processed when a customer wants to pay

How do online payments work?

No matter the payment method, every online transaction follows the same basic principles:

• Initiation - the customer chooses their preferred online payment method
• Validation - payment service providers and banks verify available funds, authenticate the user and authorise the transaction
• Settlement - the merchant’s account is funded shortly after payment initiation, or after a few days, depending on the type of payment selected

This combination of these functions ensures that online payments are not only fast but also secure, giving customers and merchants confidence in every transaction.

Generally, online payments follow these steps:

1. Customer chooses a payment method: At checkout, the customer selects how they would like to pay
2. Payment details are secured and sent: If paying by bank or card, the merchant’s payment service provider or gateway encrypts or tokenises the payment details before securely sending the instruction to the bank
3. Routing through networks or schemes: Depending on the method, the request may pass through an intermediary network - for example, Visa or Mastercard for card payments, or a clearing system like PayInc for EFT transactions
4. Authentication and authorisation: Transactions may need additional authentication such as 3DS authentication for online card transactions. This process ensures that the issuing bank (customer’s bank) verifies that the transaction is being made by the rightful accountholder. Additionally, the issuing bank checks if the customer’s account has enough funds to complete the transaction 
5. Clearing and settlement: Once authorised, the funds move to the merchant’s account. In some cases, this settlement is instant, in others, like card payments, it may take one to three business days
6. Payment confirmation: Finally, when the online transaction is processed, both customer and merchant receive a confirmation
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How can online payments benefit e-commerce businesses?

Online payments are catalysts for growth because they optimise customer experience and operational efficiency. Customers prefer fast, secure and flexible ways to pay, and e-commerce businesses that meet this demand see higher conversions, smoother cash flow and fewer operational bottlenecks. 

How to set up online payments for e-commerce businesses

1. Access or set up a merchant account

To start accepting online card payments in South Africa, you need to have or access a merchant account. 

Definition: A merchant account is an account that the merchant’s bank (acquiring bank) uses to process card transactions. The bank uses this account to hold funds until all transaction fees are cleared before settling funds into the business banking account. 

The way to access a merchant account depends on the size of the business. 

• Businesses that process transaction values of less than $1 million (Visa) and $10 million (Mastercard) per annum can choose to use payment facilitators (payfacs) to acquire card payments through an aggregated merchant account, such as via Stitch.
• Businesses that process higher transaction values per annum need to have their own merchant account with a bank, but will also need a system operator (SO) or payment gateway to process transactions. Stitch also supports these businesses as an SO.

Stitch provides both payfac and system operator services for merchants and enterprises with complex payments. We understand that not all businesses are ready to own their own merchant account, so we prioritise going through the growth journey with you and offering a first-class payments solution no matter where in the journey you are. 

2. Partner with a payment processor

You do not need a developer to set up an online payment method. You can partner with a payment processor that provides businesses with online payment solutions. Especially for small businesses, online payment methods provided through a payment gateway make it easier to reach new markets without investing in expensive infrastructure. The alternative is to build a payment processing system yourself, which can be labour-intensive and take away from what’s really important - building a competitive business.

Choosing the right payment gateway or processor will have a significant impact on your payments experience and inevitably, your conversion rates. Our clients have access to an extensive range of online and in-person payment methods, backed by ironclad security and fraud protection.
Additionally, e-commerce businesses may choose to leverage platforms such as Shopify and Woo, which make it easy to get started with an e-commerce account and start accepting payments via partners or plug-ins, like Stitch Express.

3. Activate your account 

Activate an account with your preferred payment gateway provider. With Stitch Express, this can be completed in three easy steps. 

4. Integrate your website with your payment gateway 

Integration should be simple and seamless to ensure rapid speed to market. 

One of the easiest ways to add online payment options to your website or app is to use plugins. You can remove the heavy lifting by using the Stitch Express plugins that are tailored for e-commerce platforms like Shopify, WooCommerce, Squarespace and Webflow.

For enterprise businesses with higher transaction volumes and complex payment requirements, Stitch provides a unified API to simplify integration while providing greater control over the user interface and checkout process.

5. Test

Before going live, test that everything is working properly. Stitch ensures businesses get the support they need by providing a team of experts to assist with integration and testing until you are ready to launch. 

Conclusion

Setting up an online payment system doesn’t have to be difficult or challenging, whether you’re a business that’s on its growth journey or an established enterprise with high transaction volumes. Partnering with a payment processor or payfac can accelerate your deployment, enabling you to accept online payments within a matter of days. 

FAQs

How can Stitch help me accept secure online payments quickly?

Stitch offers multiple integration options, from hosted payment pages to full API access so you can start accepting payments as quickly as possible. For e-commerce businesses operating on platforms like Shopify or Woo, the Stitch Express plugin can be activated in less than 24 hours.

What documents are needed to onboard with a payment processor?

Requirements vary depending on your business type. We have outlined document requirements to get started with Stitch Express here. 

Can I offer both card and bank payments through one Stitch integration?

Yes. With a single Stitch integration, you can accept the following payment methods:

• Capitec Pay, Absa Pay and Nedbank Direct EFT
• Apple Pay, Google Pay and Samsung Pay
• Card
• DebiCheck or debit order
• Manual EFT 
• Crypto

How do I process credit card payments online?

To process credit card payments online, you need a merchant account or access to a payment facilitator plus a payment gateway like Stitch that routes transactions securely through card networks.