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The first thing that you need to
understand is how e-commerce works:
A consumer, or potential customer, accesses
the Internet and navigates to your Web site.
If you have a brick-and-mortar business,
you'll want to have vital information on your Web site so that your
customers can find you; this would be a static Web site.
This may include current products that are
on special as well as other product listings that make consumers believe
that your business is where they want to make their purchase and is both
appealing and a good value to the consumer.
Likewise, if you have an online business,
you'll want to convince your potential customers or Web site browsers to
make a purchase for the products you are selling from your Web site.
Once consumers decide that they're ready to
make a purchase, they'll need to be guided to an online transaction or
secure Web server so that you can collect their personal and payment
information using a secure encryption method.
It is possible to create a Web site that
can collect credit card and other sensitive data without offering
encryption; however, most savvy shoppers will never enter credit card
information into a non secure Web site. Therefore, we highly discourage
any attempt to create a simple shopping cart that does not include secure
socket layer encryption of personal or sensitive data.
Operating a Web site without encryption for
personal or credit card data is a sure-fire formula for disaster and loss
of potential customers.
To enable your Web site for e-commerce, you
must install and configure your products in a shopping cart. It is
important to recognize the elements of a credit card transaction: your Web
site contains the product pricing, description, and images, and the
shopping cart is embedded into your Web site and stores the dynamic data
regarding your product.
When he or she is ready to "check
out" from the Web site store, the customer typically clicks a
"checkout" button and is taken to the encrypted version of the
company Web site.
The customer will typically continue with
the checkout process by calculating shipping costs, entering personal
information such as credit card data and a shipping address, and securely
completing the transaction.
All credit card companies charge a
percentage of the sale as an overhead fee for using their credit
processing services. The added service layer between your credit card
processor and your Web site is known as a transaction service or gateway
service.
This layer recognizes an e-commerce
transaction, performs immediate credit card authorization, and
processes the transaction. While this service is not uncommon, it does add
a layer of cost to operating your Web site.
There are two distinct possibilities that
account for how your order may be processed: after the order has been
placed, all of the necessary information travels through a private gateway
toward the "transaction/gateway processing network." This
processing network is where the transaction is approved or denied,
depending on the credit history of the consumer and the funds
available.
Although this may seem like a long process,
it takes only a few seconds to complete. For the business owner, offering
an e-commerce service is an added service and an added fee.
Another lower-cost option is to eliminate
the transaction/gateway processing network. Many Web site owners
prefer to manually "run" credit card payments through their desktop
credit card processing/authorization systems and merely use the
shopping cart as an order processing and retrieval system, where
the credit card is processed manually after the online session is
completed.
This low-cost alternative eliminates the
cost of the middle-tier authorization and does not affect what the
consumer sees after completing the checkout process. With both options,
the consumer should be sent an order confirmation by e-mail.
As mentioned, you will be able to use many
different systems of payment to accommodate your online transactions,
depending on how many transactions you average in one day. No matter what
type of payment method you choose, you need to ensure that it is encrypted
and secure so that the privacy and personal information of your
customers is never jeopardized.
As a reminder, never operate a Web site
where you collect personal data or financial information without offering
a secure and encrypted connection.
About the Author: Rob
Wood, owner, lead developer with http://www.synaxissolutions.co.uk
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