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An eCommerce Primer
Many small business owners will find the need to accept credit
card payments for products and services offered on their website.
When I set up my first ecommerce website I found the information
surrounding online credit card purchases to be more confusing
than any other aspect of marketing on the Internet.
The reason as it turns out is that the various organizations
offering to advise you on how to set online payment systems up
have conflicting interests and, in some cases, no idea how the
systems work together.
The other potentially confusing aspect of online payments is
that the entire system involves a number of service suppliers
each providing one element of the entire chain. The real trick
is getting them all working together.
So let me outline the parts and then give you a couple of
suggestions for how you might approach an ecommerce system for
your business. (There are dozens of ways to get the same thing
done!)
Internet Merchant Account - In order to take online payments,
when you don't physically swipe a credit card, you need an
Internet merchant account. This account can be issued by your
bank or by a host of companies, such as Merchant Warehouse, that
offer Internet merchant accounts. It's important to note that if
you already have a merchant account for your store or business,
you will need to get an Internet account as they are different.
This account will include a set-up fee and some % per
transaction fee.
Most banks only provide merchant accounts for Visa and
MasterCard. It is a very good idea to offer American Express and
Discover card payment options. In order to do this you need to
contact American Express and Discover and activate accounts.
Once you have this information you can provide it to your
merchant account provider's payment processor to process all
four cards in the same account.
Virtual Terminal - A virtual terminal is an add-on service that
comes with your Internet merchant account. This allows you to
take phone orders or in-person workshop orders and then go to a
secure Internet based site and process the orders into your
account.
Secure Payment Gateway - Since Internet traffic is susceptible
to eavesdropping you will need a secure payment gateway that
allows your customer's credit card data to be secure as they
place orders. This is yet another service provider that
specializes in secure transaction and takes the secure data and
passes it through a secure gateway to your payment processor.
You want to make sure that this part of the process works with
your merchant account and your shopping cart. I would stick with
one of the leading gateway providers. This would include
Authorize.net, VeriSign and SkipJack There is a fee for this
service as well. It is important that you communicate who your
gateway provider is to your merchant account provider.
If you are selling goods that are available to download
immediately you will also need what is known as real time
processing from your secure processor. This is simply a
connection that gets a credit card transaction approved or
declined in real time as a customer places an order. There is an
additional charge for this service.
Shopping Cart - shopping carts come in software and hosted
service based versions that allow your customers to shop for
multiple items and then pass the order to your payment system by
way of checkout. This service is very important if you have
multiple products available on your web site. There are some
very stable, fully functioning shopping carts that are free or
very low cost. Some leading cart systems include osCommerce,
zencart, and 1ShoppingCart. I must repeat that you need to make
sure that your shopping cart is supported by your payment
gateway and vice versa - just ask.
Third Party Processing - There is an alternative solution to the
entire puzzle known as a third party processor. In this
approach, the third party provider may offer all of the
processing and no merchant account is required. The drawback to
this approach is that you generally pay a higher overall fee per
transaction and have limited ability to customize your
customer's check out experience to match your website. PayPal,
an eBay company, is the largest provider of this approach and is
a very acceptable option.
A Few Words of Advice
Each piece of the ecommerce puzzle comes with a fee, either as a
monthly set price or on a per transaction basis. Make sure that
you understand what the fees are. Online merchant account
providers are notorious for charging very high application and
set-up fees. Start with your bank, but shop this aspect around.
Most small business owners should be able to set-up a fully
functioning, real time processed site with a shopping cart for
less that $150/mo (not including per transaction fees)
Make sure that you find out which parts work well with each
other. In other words, when you are looking for a shopping cart
or payment processors make sure that they integrate with your
real time payment gateway and vice versa. If you stick with the
big names in each category you shouldn't have any problems.
About the author:
John Jantsch is a marketing coach, author and creator of the
Duct Tape Marketing System. You can get more information about
the Duct Tape System and download your free copy of How To Grow
Your Small Business Like Crazy by visiting
http://www.ducttapemarketing.com