What you need before you start building
A payment website requires three separate pieces working together: a place where customers see your products or services, a way to collect their payment information securely, and a system that moves money from their bank account or card into yours. You cannot build just one of these and stop—all three have to exist and talk to each other, or the transaction fails and your customer leaves.
Before you write any code or sign up for any service, decide what you are actually selling. A digital product (ebook, software license, course) needs different payment handling than a physical product (which needs shipping tracking), which is different from a service (which might need scheduling). Each one changes which payment processor and which website platform makes sense for you.
You also need a business bank account separate from your personal account. Payment processors will not send money to a personal account, and mixing business and personal money makes taxes and disputes much harder to sort out later. Open this before you choose a processor, because some processors ask to verify the account during setup.
Key Takeaways
- You need three things: a website where customers browse, a payment processor that handles the transaction, and a way for those two to communicate—most website platforms handle this connection for you.
- Shopify, WooCommerce, and Square Online are the most common platforms for small businesses; each one charges differently and connects to different payment processors.
- A payment processor (Stripe, Square, PayPal) takes a percentage of each transaction (usually 2–3% plus a small per-transaction fee) and deposits money into your business bank account.
- Your website must use HTTPS encryption and never store customer card numbers yourself—the payment processor handles that part, which protects you from fraud liability.
- You will need a business license in your state, and you may need to collect sales tax depending on where you operate and where your customers are located.
Choosing a website platform that handles payments
Shopify is the most common choice for small businesses selling physical or digital products. It charges a monthly subscription (starting around $29 for the basic plan), takes a percentage of each transaction you process through their system, and includes hosting, security, and basic payment processing all in one. You do not have to hire a developer—you pick a template, add your products, and connect a payment processor. Shopify works with Stripe, PayPal, and their own payment processor.
WooCommerce is free software you install on your own website hosting (which you pay for separately, usually $5–15 per month). It gives you more control over how your site looks and works, but you have to handle updates and security yourself, or hire someone to do it. WooCommerce connects to most payment processors, including Stripe and PayPal. This route is cheaper if you have low sales volume, but costs more in time or developer fees.
Square Online is built by Square, a payment processor. It is free to set up and you only pay when you make a sale (no monthly subscription). The trade-off is that Square takes a larger percentage per transaction than some competitors. Square Online works best if you are already using Square for in-person payments (like a cash register), because everything syncs automatically.
Custom-built websites are an option if you have specific needs that templates cannot meet, but they require hiring a developer and cost thousands of dollars upfront. Most small businesses should start with a template platform and move to custom only if the template becomes a real constraint.
How payment processors work and what they cost
A payment processor is the company that actually moves money. When a customer enters their card number on your website, the processor checks with the customer's bank that the card is real and has enough money, holds the money temporarily, and then deposits it into your business bank account (usually within 1–3 business days). The processor charges you for this service.
Most processors charge in two ways: a percentage of the transaction (usually 2.2–2.9% for online card payments) plus a fixed fee per transaction (usually $0.30). So if a customer pays you $100, you might receive $97.00 (the processor keeps $3.00). Some processors also charge a monthly fee or a fee to set up your account, though many waive this for small businesses.
Stripe charges 2.9% + $0.30 per online card transaction and has no monthly fee. They are known for fast payouts and good customer support. PayPal charges 2.2% + $0.30 for card transactions and 1.99% + $0.49 for PayPal wallet payments. Square charges 2.6% + $0.10 for card transactions and works well if you also take payments in person. Rates vary slightly by country and payment method (debit card, credit card, digital wallet), so check the current rates on each processor's website before you decide.
Never store customer card numbers yourself. The payment processor stores them in their secure system, and your website only asks the processor to charge the card. This protects you from fraud liability—if someone steals card data, it is the processor's responsibility, not yours, as long as you followed their security rules.
Setting up the connection between your website and payment processor
Most website platforms (Shopify, WooCommerce, Square Online) have built-in buttons to connect to major payment processors. You sign up for a processor account, get your API keys (a long string of characters that proves your website is allowed to use that processor), and paste them into your website settings. The platform then handles the rest—when a customer clicks "Pay," the website sends their information to the processor, waits for approval, and shows a confirmation page.
If you are building a custom website or using a platform that does not have a built-in connection, you will need a developer to write code that talks to the processor's API (application programming interface). This is not difficult for experienced developers, but it is not something you can do yourself without learning to code.
Test every step before you go live. Most processors give you a test mode where you can process fake transactions and see what your customer sees. Use it. Process a test payment, check that the money appears in your test account, and make sure the confirmation email goes to the right address. If something breaks, you want to find it before real customers try to pay you.
Security and legal requirements for payment websites
Your website must use HTTPS encryption, which scrambles data so that hackers cannot read customer information as it travels from their computer to your server. Most website platforms include this automatically, but check your settings to make sure it is turned on. Your web address should start with "https://" not "http://"—if it does not, customers will see a warning that the site is not secure, and most will leave.
You need a business license in your state. Requirements vary by state and by what you are selling, so check your state's Secretary of State website or your county clerk's office. Some states require a license before you start, others only if you reach a certain amount of sales. Getting a license costs $50–$200 and usually takes a few days to a few weeks.
You may need to collect sales tax depending on where you operate and where your customers are located. If you have a physical location in a state, you must collect sales tax from customers in that state. If you sell online, the rules are more complicated and vary by state—some states require you to collect tax from all customers, others only from customers in your state. Use a tax calculator like TaxJar or Avalara to figure out what you owe, or talk to an accountant. Most website platforms can calculate and collect tax automatically if you set it up.
Keep records of every transaction for at least three years. Your payment processor sends you a statement every month, and you should download and save it. These records are what you show to the IRS if you are audited, and they are also what you use to dispute a transaction if a customer claims they never received what they paid for.
Getting your first payment and what happens next
When a customer completes a purchase, they see a confirmation page on your website. They also receive a confirmation email (which you set up in your website platform). The payment processor holds the money for 1–3 business days while they check for fraud, then deposits it into your business bank account.
During those 1–3 days, the money is not yours yet—if the processor detects fraud or the customer's bank reverses the charge, the money goes back to the customer and you lose it. This is called a chargeback. If you get too many chargebacks (usually more than 1% of your transactions), the processor can close your account. To avoid chargebacks, ship physical products quickly, send digital products immediately, and respond to customer complaints within 24 hours.
After the money lands in your account, it is yours to keep (unless the customer disputes it later). You are responsible for paying taxes on it, so set aside 25–30% of each payment and put it in a separate savings account. At the end of the year, your accountant will tell you exactly how much you owe.
Common mistakes to avoid when building your payment website
Do not ask customers to email you their card number. This is illegal under payment card industry rules, exposes you to fraud liability, and makes customers rightfully suspicious. Always use a payment processor that handles card information.
Do not launch without testing. Process a test transaction from start to finish, including the confirmation email and the deposit into your bank account. If you skip this step, your first real customer might find a broken checkout, and you will lose the sale and their trust.
Do not ignore chargebacks. If a customer disputes a charge, the processor will notify you and ask for proof that you delivered what they paid for. Respond within the deadline (usually 7–10 days) with an order confirmation, shipping tracking, or delivery proof. If you do not respond, you automatically lose the dispute and refund the customer.
Do not forget to set up tax collection before you make your first sale. Adding it later means you have to go back and calculate what you owe on past sales, which is a headache. Set it up in your website platform from the beginning.
Frequently Asked Questions
Do I need a website developer to build a payment website?
No. Shopify, WooCommerce, and Square Online all let you build a payment website without coding. You pick a template, add your products, and connect a payment processor through built-in buttons. You only need a developer if you want custom features that templates do not offer.
What happens if a customer says they never received their order?
For physical products, you need proof of delivery—a tracking number from your shipping carrier. For digital products, you need proof you sent it (an email receipt or download link). Keep these records for at least three years. If you cannot prove delivery, the processor will refund the customer and you lose the money.
Can I accept payments without a business bank account?
Most payment processors will not deposit money into a personal account. Even if one does, mixing business and personal money makes taxes much harder and can cause problems if you are audited. Open a business account before you set up your payment processor.
How long does it take to get money after a customer pays?
Payment processors usually deposit money into your bank account within 1–3 business days. Some processors offer faster payouts (same day or next day) for an extra fee. Check your processor's payout schedule before you sign up.
What if my payment processor closes my account?
Processors close accounts for too many chargebacks, suspicious activity, or selling prohibited items. If this happens, you lose access to process new payments and may not be able to refund customers. To avoid it, respond to customer complaints quickly, ship orders fast, and keep detailed records of every transaction.