What are the practical steps for monetizing a web service?

Chances are that this idea will go absolutely nowhere (as most ideas do), and as you're new to this you're prone to vastly overestimating the probability of success and estimated returns.

My advice is to relax, and focus on learning what you're doing instead of focusing on "monetizing a web service".

If you want immediate practical direction, set yourself up with a Stripe merchant account (and whatever is necessary for that), and start selling. If you can't get past this, everything else is a waste of time.

Even if the project goes nowhere, you can use this account for other side projects you want to make money.

Accepting any money from anybody to your personal account is just stupid, and will make for a huge nightmare when you want to transition to being a huge business or paying taxes.

Do that and worry about the rest once you have enough money.

Sure, on average a start-up will fail. However, if either it does work out or it fails because you screwed up and someone came after you, and you didn't get a few basics in place up-front, then you are up the creek without a paddle and may not be able to salvage the situation after the fact.

It will probably take no more than a quick chat with an accountant to figure out the minimum you need to do to comply with your local tax laws and whether it's worth setting up some sort of company at this stage. The total spend required to do that in my country, including both the accountant's advice and the legal fees to register a new company and get the proper documents created, is less than a day's salary. This does vary significantly by country, but again a local expert can advise you because they do this all the time.

Likewise, if you're potentially bringing in thousands of bucks per year, spending a couple of hundred to get a real lawyer to look over your terms and answer any general questions about licensing things you really need to know right now is probably money well spent.

None of this is to say that you won't decide to just set up a site and start charging anyway, assuming you can find a payment service available in your location that will let you take payments as a private individual of course. Maybe that really is the right path for you at this stage (though at least if you were in the same position in my country, IMHO that would be unlikely).

But seriously, any accountant and lawyer used to working with small businesses will understand the situation you're in and be able to give you some basic advice about what you really do and don't need to worry about right now, and it will cost you a few hours and a day or two of salary, and even if things don't work out this time you'll still have the useful background knowledge if you decide to do anything else commercial later.

You should concentrate on making what you make and marketing it so you have a business that is worth having in the first place, but part of running a business professionally is knowing how to deal with the administration and keep the overheads in proportion, and it's much easier to do that if you just get something basic but sufficient set up from the start.