How to Accept Online Payments and Get Paid Faster

Published Monday 26 January 2026

Table of contents

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

Key takeaways

• Implement online payment options to accelerate cash flow by receiving funds in 1-3 days instead of 30+ days, with customers paying up to 40% faster when given convenient payment methods.
• Add payment buttons directly to your invoices by choosing a provider that integrates with your accounting software, which allows customers to pay instantly with a simple click.
• Budget for merchant service fees of 2.5-3.5% for credit cards and 1.5-2.5% for debit cards, while considering direct debit options at $0.20-$2.00 per transaction for larger invoices.
• Prioritise mobile-friendly payment options as customers increasingly use phones for payments, ensuring your business stays competitive in the digital payment landscape.

Popular online payment methods

Online payment methods are digital systems that let customers pay invoices without cash or cheques. The most common options include:

• Credit and debit cards: Process payments instantly through secure gateways
• Digital wallets: Services like PayPal that store payment details securely
• Direct debit: Automatic bank transfers you can set up for recurring payments
• Bank transfers: Direct payments from customer bank accounts

In the case of direct debit, the customer can authorise ongoing payments. This allows you to take money direct from their bank account whenever a bill is due.

Why accept online payments?

Online payments accelerate your cash flow by getting you paid up to twice as fast as traditional methods, which is critical when some large companies pay on average 15.5 days late. Many online payments process instantly.

The benefits for your business include:

• Faster payment: Receive funds in 1-3 days instead of 30+ days
• Reduced admin: No more chasing late invoices or manual payment tracking
• Higher payment rates: Customers pay 40% faster when given convenient options
• Better cash flow: Predictable payment timing helps with business planning

Learn more about how to accept online payments.

How does online payment work?

Online payment processing works through merchant service providers that connect your invoices to payment systems. Here's how the process works:

1. Choose a provider: Select one that integrates with your accounting software
2. Set up your account: Most providers offer free setup with no upfront costs
3. Enable payment buttons: A 'pay now' button automatically appears on your invoices
4. Send invoices: Customers click the button and pay instantly online
5. Receive funds: Money appears in your account within 1-3 business days

How to set up online payments

Getting started with online payments is more straightforward than you might think. Most of the work is done by your payment provider and accounting software.

Follow these general steps:

1. Choose a payment provider that fits your business needs. Look for one that integrates with your accounting software to keep things simple.
2. Connect the provider to your software. This is usually done in the settings or app marketplace section and only takes a few clicks.
3. Update your invoice templates to include the payment link or button.
4. Start sending your new and improved invoices to customers.

Add online payments to your invoices

The easiest way to get paid online is by adding a payment link directly to your invoices. When a customer receives your invoice by email, they can click a 'Pay now' button to settle their bill in seconds.

This removes the friction of manual bank transfers and forgotten due dates. It makes paying you as simple as any other online purchase, which helps improve your customer's experience and your cash flow.

Security and fraud protection

When you handle payments, you need to keep your data and your customers' data safe. Reputable online payment providers invest heavily in security to protect everyone involved.

They use data encryption and comply with strict security standards to protect sensitive financial information. In many jurisdictions, central banks and regulators ensure financial institutions meet their obligations under anti-money laundering and counter-terrorism financing laws. This means you can offer convenient payment options while staying protected from fraud.

Mobile payment options

Your customers are increasingly using their phones for everything, including making payments. Offering mobile-friendly payment options is no longer a nice to have. It is now a necessity as global adoption of new digital and payment technologies grows, as shown in the CPA Australia small business survey 2024–25.

What are merchant service fees?

Merchant service fees are charged per transaction, not as setup costs. Here's what you can expect to pay:

Card payments:

• Credit cards: 2.5-3.5% per transaction
• Debit cards: 1.5-2.5% per transaction
• Example: $100 invoice = $2.50-$3.50 fee

Bank transfers:

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

You can choose when to accept payments online; you do not have to do it every time. You can switch it on and off. To help keep costs down, businesses tend not to offer online payment on invoices of more than $5,000.

How to account for transaction fees

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

This automation saves time and ensures accurate financial reporting for tax purposes.

Choosing the right payment provider

With many options available, choose a provider that works for your business. Here are a few things to consider:

• Fees: Compare transaction fees and any monthly charges to find a cost-effective solution.
• Integration: Make sure the provider connects seamlessly with your accounting software to automate reconciliation.
• Payment types: Check that it supports the payment methods your customers prefer, like credit cards or digital wallets.

Will everyone pay faster?

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

• 30% of customers pay immediately when they receive the invoice
• 50% of customers pay within 3-7 days instead of 30+ days
• 20% of customers maintain their usual payment timing
• Chronic late payers, such as large businesses, which one report found were the latest payers for an 18th straight quarter, often become on-time payers when paying is more convenient

The key benefit is making payment effortless for customers who want to pay promptly.

Start accepting payments online today

Online payment integration transforms your invoicing from a cash flow headache into a competitive advantage. If late payments currently strain your business finances, adding 'pay now' buttons to your invoices can cut your average payment time in half.

Xero's integrated payment solutions work seamlessly with your invoicing, so you can focus on growing your business instead of chasing payments. Ready to improve your cash flow? Try Xero for free and start accepting online payments within minutes.

FAQs on accepting online payments

Here are answers to some common questions about accepting online payments.

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 other small businesses. Xero integrates with a range of popular payment gateways like Stripe and GoCardless.

How secure is online payment processing for small businesses?

It's very secure. Reputable payment processors use advanced encryption and security protocols to protect transaction data. This makes it one of the safest ways to handle payments.

Can I accept payments if I don't have a website?

Yes. You can accept online payments without a website by adding a payment link to your digital invoices. When customers click the link, they are taken to a secure page to complete the payment.

What happens if a customer disputes an online payment?

If a customer disputes a charge (a chargeback), the payment provider will notify you and guide you through the process. You'll have an opportunity to provide evidence, like the original invoice, to resolve the dispute.

How long does it take to receive online payments?

The time it takes for money to appear in your account varies by provider and payment method. It typically ranges from two to five business days.