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Introduction To Ecommerce
any people new to website and depositing that money
websites and/or ecommerce into the bank. In order to
are confused at the in and collect funds, you need to have a
outs of ecommerce. Even many merchant account and a payment
people who are fairly adept at gateway (discussed below).
scripting can set up a store Basically, when a person enters
using some popular package such their credit card number on a
as OSCommerce and then are left website, the card number and
stumped by the idea of making it buyer information is sent to a
work with a payment gateway to payment gateway. This is done
actually collect money and put it securely. The payment gateway
into their account. In this will interface with a payment
article, I will give a brief processor to check availability
overview of how the system is set of funds as well as any other
up to collect your money. I will criteria set for accepting
then discuss briefly what to look transactions. If the funds are
for in evaluating payment available, the payment processor
gateways. As usual, I will keep will then deduct the funds. The
this basic and understandable payment gateway will then report
just as I do with all of my back a successful transaction to
articles. the merchant, at which point the
merchant's shopping cart system
The Basics - How Funds are will respond by displaying a
Collected "Thank You" type message to the
buyer. Funds will sit until the
Ecommerce simply refers to the transaction is settled, which
practice of shopping online. From means the funds are collected and
the site owner's perspective, it deposited to your bank account.
entails collecting funds from Until a transaction is settled,
sales transactions on their the transaction will not post to
your bank account and the takes care of checking for
corresponding debit will not post availability of funds and
to the buyer's credit card debiting from the credit card
account. account. The bank issuing the
merchant account is trusting that
Merchant Accounts you will fulfill your end of the
transaction by providing the
A Merchant Account is a special product or service that the buyer
type of account specifically for purchased. In case where this
online retailers. They are does not occur, the buyer can
designed to allow non-POS (point dispute the transaction. This
of sale) transactions using puts the issuing bank on the line
credit cards, or transactions because they are then obligated
where you don't have the person's to return the funds to the
credit card in hand. In other buyer's card (a chargeback).
words, you don't have a card Therefore, merchant providers are
swiper. A merchant account is not taking a risk in allowing a
the same as a bank account. It merchant to take credit cards
acts as a go-between between your under their name.
payment gateway and your bank
account, accepting funds from The organization providing your
credit cards which are then merchant account will do
deposited into your bank. underwriting on the account when
you apply to check your credit.
A merchant account is a If you have a history of too many
relationship based on trust chargebacks, you may be denied.
between you and the issuing bank. In fact, too many chargebacks can
The bank takes funds from the result in you, as a merchant,
buyer's account and deposits into being put on the Terminated
your account. A payment processor Merchant File (also called The
Match File). This is a blacklist as value-added services.
which will effectively prevent
you from ever receiving a Some of the better known payment
merchant account again. gateway services are
Authorize.Net, Verisign,
Payment Gateways 2CheckOut.com, Linkpoint,
Paysystems.com, Worldpay.com, and
A payment gateway serves as the MerchantCommerce. Some of the
front end to your merchant things to look for in a payment
account, allowing you to manage gateway are compliance with CISP,
funds, transactions, and the SDP and DISC (security
like. It also serves as a initiatives put out by the major
connection between your website credit card companies), virtual
and your merchant account. It terminal (to be able to accept
takes data submitted via your transactions over the phone by
secure order forms and presents typing in their data rather than
it to your processing bank. The only relying on your website),
processing bank then approves or fraud prevention, recurring
declines the transaction and billing, methods of integration,
sends its response back to the cost and whether they can accept
payment gateway. The payment e-checks or not.
gateway then turns around and
provides this data back to the Fraud prevention is a big one
merchant for appropriate handling because, as stated above, too
of the transaction. A payment many fraudulent transactions will
gateway, then, does not offer result in chargebacks which could
services such as merchant end up putting you on the Match
accounts or shopping carts, List and your merchant account
although some of the larger-known closed. Some of the common fraud
gateways do provide such options detection mechanisms are Address
Verification (AVS) which compares means the site owner does not
the customer's address with that need to purchase their own SSL
on file with the issuing bank, certificate (allowing secure
CVV2 which makes use of the transactions on the site itself).
3-digit security code on the The tradeoff is that you do need
credit card (4-digit on American to send your customers off of
Express cards). your website for payment
collection. Many gateways offer
Most gateways will provide ways to make the payment form
instructions on how to interface look like your website using
with their servers from your web customized headers and footers,
store. Most gateways offer two but the fact remains that the
methods of integration. visitors are leaving your
website.
One method is to have your site
POST a form to the gateway's The second method is totally
server which is pre-populated invisible to the customer. If the
with your customer's information. site owner has an SSL
At that point, the customer will certificate, they can set up
provide the customer with the security on their own site. This
payment form which allows them to means they can host the payment
type in their credit card number form themselves, totally
in a secure environment. After customizing it to their website.
processing occurs, the customer When the customer submits
is then routed back to your payment, your site will securely
website along with the results of and invisibly submit the
the transaction. Your site again information to the payment
takes over the process. This gateway. The payment gateway will
method is usually easier to set do the usual processing and then
up for site owners and it also invisibly send the response back
to the merchant's website, gateway. So, in most cases, you
allowing it to respond properly. do not need to sign up for them
From the customer's perspective, separately.
they never left your website. And
they never did. This type of Conclusion
setup requires an SSL certificate
as well as access to the CURL Hopefully this has given you a
library. brief introduction to how credit
card payments are processed on
Many gateway providers can get the internet.
you set up with a merchant
account at the same time as the
About the Author:
David Risley is a web developer and founder of PC Media, Inc. (http://www.pcmedianet.com). Specializes in PHP/MySQL development, consulting and internet business management. He is also the founder of PC Mechanic (http://www.pcmech.com), a large website delivering do-it-yourself computer information to thousands of users every day.
Read more articles by: David Risley
Article Source: www.iSnare.com
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