Last editedDec 20212 min read
Your start-up is almost ready to start trading. Your team is well-trained, your product is ready for market, and your launch strategy is in motion. You understand the perils and pitfalls that you’ll face in your all-important first year, like maintaining healthy cash flow. You understand the importance of retaining customers. But before your launch, you need to ponder this question.
How will you get paid?
The answer isn’t as simple as you may think. Whether you conduct business online or in a brick-and-mortar premises, you’ll need to have a payment solution set up to ensure secure and frictionless payments from your clientele. Here, we’ll look at everything you need to know about payment for your start-up.
What is a payment solution?
There was a time when most business transactions involved only cash. In the digital age, however, there are all manner of software solutions competing for market dominance. This is good for start-ups because it affords them a wealth of choice. But they can be bamboozling for newcomers.
Payment gateways, payment processors and merchant accounts
Conventional payment solutions are made up of three components — payment gateways, payment processors, and merchant accounts.
Let’s take a look at each of these in greater detail:
Merchant accounts — These are separate bank accounts that enable you to accept payments via credit and debit card.
Payment gateways — Payment gateways act as an intermediary between your online store (where payment is made) and your merchant account (where the payment ends up). Think of them as the digital equivalent of on-site POS machines.