How to accept online payments and get paid faster

Published Wednesday 22 April 2026

Table of contents

• What is online payment processing?
• Why accept online payments?
• Popular online payment methods
• How online payment processing works
• How to set up online payments
• Choosing the right payment provider
• What are merchant service fees?
• Security and fraud protection
• Mobile payment options
• Will everyone pay faster?
• Start accepting payments online today
• FAQs on accepting online payments

Key takeaways

• Add a 'Pay now' button to your invoices so customers can settle their bill in seconds, cutting your average payment time from 30+ days down to 1–3 days.
• Choose a payment provider that connects directly with your accounting software to automate reconciliation and remove manual admin from your invoicing process.
• Compare transaction fees carefully before committing to a provider, as card payments typically cost 1.5–3.5% per transaction, while direct debit charges a flat $0.20–$2.00, making it a cheaper option for large invoices.
• Use reputable payment providers that follow security standards like Payment Card Industry Data Security Standard (PCI DSS) to keep your customers' financial data safe and protect your business from fraud.

What is online payment processing?

Online payment processing is the electronic system that lets your business accept, authorise, and settle customer payments through digital channels. Instead of waiting for cheques or cash, you receive funds directly into your bank account within days.

For small businesses, this means faster access to your money and less time chasing overdue invoices. The sections below cover the payment methods available, how the process works, and how to get started.

Why accept online payments?

Online payments get you paid faster. While traditional invoicing can leave you waiting 30+ days, online payments typically clear in 1–3 days. This matters when some large companies pay on average 15.5 days late.

The benefits for your business include:

• Receive funds faster: Get paid in 1–3 days instead of 30+ days
• Reduce admin: Automate invoice tracking and payment collection
• Increase payment rates: Customers pay 40% faster when given convenient options
• Improve cash flow: Predictable payment timing helps with business planning

Learn more about how to accept online payments.

Popular online payment methods

Online payment methods are digital systems that let customers pay invoices without cash or cheques. Each method suits different business needs.

• Credit and debit cards: Process payments instantly through secure gateways. Best for one-off purchases and customers who prefer familiar checkout experiences. Funds typically clear in 1–3 business days.
• Digital wallets: Services like PayPal store payment details securely. Ideal for customers who want fast checkout without entering card details each time.
• Direct debit: Automatic bank transfers you set up for recurring payments. Perfect for subscriptions, retainers, and rent collection. The customer authorises ongoing payments, allowing you to collect from their bank whenever a bill is due.
• Bank transfers: Direct payments from customer bank accounts. Lower fees than cards but requires customers to initiate payment manually.

How online payment processing works

Online payment processing connects your invoices to secure payment systems through a merchant service provider. When a customer pays, several steps happen behind the scenes.

Here's what happens when a customer clicks 'pay now' on your invoice:

1. Customer receives your invoice: The invoice includes a secure payment button or link
2. Customer enters payment details: They click the button and provide card or bank information
3. Payment gateway encrypts the data: Sensitive details are secured and sent to the processor
4. Bank or card network authorises the transaction: The customer's bank confirms funds are available
5. Funds are settled: Money transfers to your merchant account, typically within 1–3 business days
6. Your accounting software reconciles the payment: The invoice is automatically marked as paid

Once the payment is processed, you can streamline future transactions.

Add online payments to your invoices

Adding a payment link to your invoices is the fastest way to get paid. When customers receive your invoice by email, they click a 'Pay now' button and settle their bill in seconds.

This creates a smooth payment experience with automatic due date reminders. Paying you becomes as simple as any other online purchase.

How to set up online payments

Setting up online payments takes minutes, not hours. Your payment provider and accounting software handle most of the technical work.

1. Choose a payment provider: Select one that integrates with your accounting software to keep things simple
2. Connect the provider: Find it in your software's settings or app marketplace and link your accounts
3. Update your invoice templates: Add the payment link or button to your standard invoice design
4. Send invoices: Start billing customers with your new payment-enabled invoices

Choosing the right payment provider

A payment provider (also called a payment gateway or merchant services provider) processes transactions between your customers and your bank. The right choice depends on your business needs.

Consider these factors when comparing providers:

• Fees: Compare transaction fees and monthly charges. Card payments typically cost 1.5–3.5% per transaction, while direct debit costs $0.20–$2.00 flat.
• Integration: Check that the provider connects with your accounting software to automate reconciliation and save admin time
• Payment types: Confirm it supports the methods your customers prefer, such as credit cards, digital wallets, or direct debit
• Payout speed: Some providers settle funds in 1–2 days, others take longer

What are merchant service fees?

Merchant service fees are the costs payment providers charge to process each transaction. You pay per transaction, not as an upfront setup cost.

Card payments have the following typical fee structures:

• Credit cards: 2.5–3.5% per transaction
• Debit cards: 1.5–2.5% per transaction
• Example: A $100 invoice costs $2.50–$3.50 in fees

Bank transfers typically have lower fees than card payments:

• Direct debit: $0.20–$2.00 per transaction regardless of amount
• Automated clearing house (ACH) transfers: Usually under $1.00 per transaction

You can switch online payments on and off for individual invoices. To keep costs down, many businesses skip online payment options for invoices over $5,000 and use direct debit or bank transfer instead.

Understanding how to record these costs is important for accurate bookkeeping.

How to account for transaction fees

Transaction fees count as business expenses in your accounts. Accounting software automatically matches fees with payments, so you see your true profit per sale without manual calculations.

This saves time and keeps your financial reporting accurate for tax purposes.

Security and fraud protection

Online payment processing is highly secure. Reputable providers invest heavily in protecting your data and your customers' financial information.

Standard security measures include:

• Encrypt data: Sensitive payment details are encrypted during transmission
• Comply with security standards: Providers follow strict standards like Payment Card Industry Data Security Standard (PCI DSS) to protect card data
• Ensure regulatory compliance: Central banks and regulators ensure financial institutions meet anti-money laundering and counter-terrorism financing requirements, guided by tools like the updated National Money Laundering and Terrorism Financing Risk Assessment

This means you can offer convenient payment options while staying protected from fraud.

Mobile payment options

Mobile-friendly payments are now essential for every business. Your customers increasingly use their phones for everything, including paying invoices.

Global adoption of digital payment technologies continues to grow, as shown in the CPA Australia small business survey 2024–25. When your payment process works smoothly on a phone, you keep customers who value convenient payment options.

Will everyone pay faster?

Payment speed varies by customer, but the overall impact on your cash flow is significant. Here's what typically happens:

• Expect 30% of customers to pay immediately when they receive the invoice
• Expect 50% of customers to pay within 3–7 days instead of 30+ days
• Expect 20% of customers to maintain their usual payment timing
• Convert customers who typically take longer to pay to on-time payers when paying is more convenient

The key benefit is creating a smooth experience for customers who want to pay promptly. Even customers who typically take longer to pay respond well when you make the process easier.

Start accepting payments online today

Online payment integration transforms invoicing into a competitive advantage. Adding 'pay now' buttons to your invoices can cut your average payment time in half.

Integrated payment solutions work seamlessly with your Xero invoicing, so you can focus on growing your business. This is an important priority given only 38 per cent of New Zealand small businesses reported growth in 2025. Ready to improve your cash flow? Get one month free and start accepting online payments within minutes.

FAQs on accepting online payments

Here are answers to common questions about online payment processing.

What is the best platform to accept online payments?

The best platform depends on your business needs. Look for providers that integrate with your accounting software, offer competitive fees, and are trusted by small businesses. Xero integrates with popular payment gateways like Stripe and GoCardless.

How secure is online payment processing for small businesses?

Online payment processing is highly secure when you use reputable providers. They use encryption, comply with security standards like Payment Card Industry Data Security Standard (PCI DSS), and follow regulatory requirements to protect your data and your customers' financial information.