Last checked: 03/06/2022

Setting up an online shop

Dealing with online payments

A major part in the online sale process belongs to payments, which can include credit or debit cards, bank transfers, prepaid cards or some other means.

A good payment provider will offer you a secure payment environment and a single interface to the payment methods you decide to use and will enable you to operate across borders.

When you enter new markets, it's important to look at the payment methods that are accepted locally. To the best of your ability, try not to discriminate based on location and provide payment options that customers are the most used to.

Choosing the right payment methods for your business

The key factors that determine the use of specific payment methods are:

Make sure that the payment methods you choose are straightforward and intuitive to use and allow your customers to complete the transaction quickly. Online payment accounts, prepaid cards, online bank transfer, real-time bank transfers based on online banking or even cash-based e-vouchers are also alternative ways to pay.

There are multiple advantages to offering alternative payments:

Selecting your payment service provider

There are 3 main payment services you can choose from. Your choice will depend on what type of customers you have, what you are selling and in which territories:

Using a single payment service provider

The payment service provider (PSP) manages the flow of information (such as transaction information) and provides you with a payment gateway to one or more online payment methods for which they act as an intermediary.

If you want to operate cross-border, you will need a PSP that unlocks payment methods in other countries and supports the currency in which you want to accept payments.

If you are a small trader, it is best to use a single PSP if you operate across different countries with divergent national preferences. The PSPs have expertise on national markets and established relationships with most of Europe's traditional and alternative online payment systems.

PSPs are governed by a specific set of rules and regulations. They must be registered in their home member state and the European Banking Authority (EBA). You can verify the validity of the PSP you choose to work with in the national registriesOpen as an external link.

Hosted or integrated?

As with general website setup, when you set up the payment gateway for your web shop you can either opt for a page hosted by your PSP or for an integrated payment solution:

Using a PSP also guarantees that security measures are in place to ensure safe and secure payments, such as strong customer authentication for payments, as well as measures to prevent payment fraud.

All PSPs charge on a fee-per-transaction basis. The transaction cost can be a flat charge per transaction and/or a percentage of the value of the transaction volume. You cannot charge this transaction fee to your customer without making it explicit during the payment process or make it higher than what it costs for you.

Respecting your customers' rights

A payment agreement constitutes a contract with a customer. Make sure you comply with the following obligations throughout this process:

Warning

Note that if you are using a PSP, in the event of unauthorised payment transactions and billing or processing errors, they are obliged to refund your customers immediately for the unauthorised transaction.

Once the payment has been confirmed by the customer, make sure to send an e-mail to show that the transaction has been completed. Depending on the type of e-commerce payment and contract, you might need to provide different types of information.

Visit our section on Customers to read more about your customers' rights.

Complying with tax and VAT obligations

Selling online also means dealing with fiscal and value-added tax (VAT) obligations. Different rules apply depending to whom, where and which good you are selling or service you are supplying. Make sure you are applying the rules of the country where VAT is due, as well as the correct rate (standard, reduced, or even zero rates may apply).

Note that you also need to check whether you should be paying excise duties. Find out more about the tax obligations related to your online business.

EU legislation

Need support from assistance services?

Get in touch with specialised assistance services

Do you have questions on operating a business cross-border, for example exporting or expanding to another EU country? If so, the Enterprise Europe Network can give you free advice.

You can also use the assistance service finder to find the right help for you.

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