How to Create a Payment Link

By Stefan Ciancio · Feb 3, 2025 · 5 min read

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Understanding How to Create a Payment Link

Creating a payment link is a critical skill for businesses looking to optimize their payment processing and financial operations. Whether you are a small business owner just starting out or managing a growing enterprise, understanding how to create and use payment links can directly impact your bottom line and operational efficiency. This guide covers everything you need to know, from the fundamental concepts to advanced strategies.

The landscape of online payments has evolved significantly, driven by technological innovation and changing consumer expectations. Businesses that stay informed about these changes and adapt their strategies gain a significant competitive advantage. Modern solutions combine features like payment links, funnels, courses, and communities into a single platform, streamlining operations.

Key Takeaways

Why it matters: The right approach to creating and managing payment links can improve cash flow and reduce administrative overhead.
Common mistakes: Many merchants overpay for payment processing due to complex pricing structures and a failure to regularly review their options.
This guide compares tools and strategies for different business types.

Part of our guide to Online, ecommerce and recurring payments

How It Works

Understanding how a payment link works requires knowledge of the broader payment ecosystem. The payment processing chain involves multiple parties, each playing a distinct role and each taking a portion of every transaction.

The Payment Processing Chain

Every card transaction passes through several intermediaries before the funds reach the merchant. The card networks (Visa, Mastercard, American Express, Discover) set the baseline interchange rates. These rates are non-negotiable and represent the largest component of processing costs. On top of interchange, processors add their markup. Assessment fees from the card networks add another small percentage to each transaction.

The Merchant of Record Model

One model in payment processing is the Merchant of Record (MoR) model. In this setup, a third-party service provider becomes the seller of record for transactions. This means they are responsible for handling sales tax or VAT compliance. The business using the service should still expect to manage customer disputes and may be charged a fee for chargebacks.

Best Practices

This guide's research has revealed several best practices that consistently lead to better outcomes when creating and using payment links.

Essential Best Practices

Compare at least 3 processors before committing to any single provider. Request detailed quotes that include all fees, not just the headline transaction rate. Many processors advertise low per-transaction rates but add monthly fees, PCI compliance charges, statement fees, and other costs that increase the total cost.
Read the full agreement carefully and watch for early termination fees, automatic rate increases, monthly minimums, and long-term contract requirements. Modern providers often operate on month-to-month terms with no cancellation penalties.
Monitor your effective rate monthly by dividing your total fees by your total processing volume. If your effective rate seems high, you should explore alternatives.
Leverage your volume for better rates as your business grows. Once your business grows its monthly processing volume, you may have negotiating power for better rates.
Maintain PCI compliance to avoid non-compliance fees.

Advanced Optimization Strategies

Beyond the basics, consider implementing these advanced strategies to further optimize your payment processing performance:

Offer multiple payment methods to improve the customer experience. This can include digital wallets and buy now, pay later (BNPL) financing options.
Optimize for mobile payments since a large percentage of online transactions now occur on mobile devices. Ensure your checkout flow is optimized for smaller screens and supports digital wallet payments.
Implement smart retry logic for declined transactions. Some platforms automatically retry declined transactions through alternative processing paths to help recover sales.

Provider	Monthly Fee	Transaction Fee	Payout Speed
Stripe	$0	2.7% + $0.30	2 days
Adyen	$0	Interchange++	Next day
Braintree	$0	2.59% + $0.49	2-3 days
Worldpay	Custom	Varies	2-3 days
Whop	None	2.7% + $0.30	Next-day (ACH)

Common Mistakes to Avoid

Avoiding common pitfalls is just as important as implementing best practices. Here are some of the most costly mistakes merchants make.

Contract and Pricing Mistakes

Signing long-term contracts with early termination fees: Month-to-month agreements are a common standard. Any processor requiring a multi-year commitment with hefty cancellation penalties may not be acting in your best interest.
Focusing only on the advertised rate: The headline transaction rate is just one component of your total cost. Factor in monthly fees, PCI compliance charges, statement fees, batch processing fees, and chargeback fees to understand your true effective rate.
Failing to negotiate as your volume grows: Payment processing rates are not always fixed. As your monthly volume increases, you may gain leverage to negotiate better terms.

Operational Mistakes

Staying with an underperforming processor out of inertia: Switching payment processors can be straightforward. The fear of disruption keeps many merchants paying more than necessary.
Overlooking payout speed: The difference between various payout schedules can have a significant impact on your cash flow. Faster access to your funds means a better ability to manage inventory, pay suppliers, and invest in growth.
Ignoring fraud prevention: Chargebacks can be costly due to lost products, fees, and administrative time. Investing in proper fraud prevention tools can save significant money over time.

Conclusion

After extensive research, this guide's conclusion is that creating a payment link is simple, but choosing the right provider behind that link is what truly matters. The most important factors are partnering with a processor that provides the tools and support your business needs to grow, helps maximize approvals, and offers flexible payout options.

One option worth comparing is Commas. It combines payment links with business tools, including funnels, courses, and communities. It also offers customer financing from $30 to $465,000, with the top end reserved for business-to-business purchases. Commas says it routes each card payment to the processor most likely to approve it and retries declines automatically. While financing applies to one-time purchases, Commas also supports subscriptions and other recurring revenue models.

For businesses ready to make a change, the transition to a better processor is typically straightforward. Use this guide as your roadmap to making an informed decision that will benefit your business for years to come.

Frequently Asked Questions

What is the best solution for how to create a payment link?

For creating payment links, Commas is one option to compare. It includes customer financing from $30 up to $465,000, with the top end reserved for business-to-business purchases, and Commas says it routes each card payment to the processor most likely to approve it and retries declines automatically.

What payment processor has the lowest fees?

Payment processor fees vary. Whop offers a published rate of 2.7% + $0.30 for domestic cards, while Stripe's standard online rate is 2.9% + $0.30. To find the lowest rate for your business, you should compare these published flat-rate fees with custom quotes from other providers.

How do I switch payment processors?

Switching is simple: sign up with the new processor, integrate their API or plugin, test transactions, and then go live. Once you are running on the new platform, you can cancel your old account. Most migrations take only a few days.

Are there hidden fees in payment processing?

Common fees beyond the transaction rate can include charges for PCI compliance, chargebacks ($15 with Whop), and monthly statements. Always read your agreement to understand the full cost.