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One important e-commerce solution to
increase orders is by accepting credit
card payments on-line. The reason is
that on-line buyers are usually
impulse buyers and accepting credit
card payment on-line provides a
convenient means for them to buy and
pay.
With more than 65% of the population
carrying at least one major credit
card, credit card acceptance creates
impulse and cash restrictive
purchases, along with ease of use for
Internet businesses.
There are four basic links in any
credit card E-commerce transaction:
The Web site 'shopping cart'; the Web
host or server; the 'Payment Gateway'
(or credit card processing agent) and
the Merchant Account (the financial
institution that credits the
E-commerce vendor). There are many
ways that these links can be joined
and these services and products can be
purchased as packages or individually.
In order to achieve what is called
'real-time' credit card processing,
each link must be able to successfully
transmit information down the chain to
the next, almost instantly.
Like most retailers, an E-merchant has
a display window for their products.
In E-commerce this is known as the
'Shopping Cart'. It is the first link
in completing an E-commerce
transaction, yet the last link in the
merchandising chain.
The Shopping Cart is split into two
parts, the 'storefront' and the 'cash
register'. A good shopping cart
amongst other things, allows customers
to select several items from the
storefront and purchase them as a
group when they reach the cash
register.
The cash register will present the
purchaser with an order form that will
collect all of the relevant credit
card information for processing. This
information is then transmitted
through what is known as a Secured
Socket Layer (SSL), a sophisticated
encryption system, to the credit card
processing agent ('Payment Gateway' in
E-commerce terms).
When your customer has entered their
purchase order the relevant
information travels the link between
your site and the Payment Gateway.
It goes directly from their computer
to the server on which your site is
hosted or to a server maintained by
the Payment Gateway. If it goes to
your server the Web host re-routes the
payment information to the Payment
Gateway. These transmissions of
confidential information must be
secure. Securing consumer confidence
is one of the foremost struggles of
E-commerce merchants today.
The Payment Gateway, or credit card
processing agent, is the agency
responsible for verifying credit card
information and affirming that there
are sufficient funds to cover a
purchase.
The better known ‘Link’ companies are
VeriSign, Authorize.Net and Online
Data Corp. These companies pass the
information to their Merchant Bank
that in turn contacts the credit card
issuer, which approves or denies
credit. Notice of approval or denial
is then forwarded back down the chain
to the Payment Gateway and to the
E-merchant.
Over the last few years, Internet
experts have been working hard to
create standards and systems to
protect consumers from fraud.
With the invention of SSL and Security
Certificates the Web has become a much
safer place to shop.
The last link in the chain is your
Merchant Account. This is an account
held for you by the Merchant Bank that
credits you for your approved
E-commerce transactions.
Canadian businesses often find getting
a merchant account from their bank for
an Internet business is next to
impossible. Many American companies
such as Online Data Corp. are now
jumping into our Canadian market, and
providing this service quite readily
to Canadian companies.
However it is done, the keyword is
integration. Remember that a shopping
cart is only part of the equation; it
is the final check out section of all
your merchandising efforts.
By making the decision to accept
credit cards, your company's profit
and growth can be realized much
sooner. -
John Shenton
- April 30, 2002
N.B. This article may be displayed on
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intact and a link to IMS plus
authorship is displayed.
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