The transaction system consists of four main aspects:
• Setting up the shopping cart and catalog services
• Payment processing and verification services
• Setting up Merchant account for credit cards, and
• Security certification and encryption to ensure safe and secure transaction.
Most of the payment processing systems discussed later in this section integrate each of these services into your website. Let us start by discussing the benefits and usefulness of Shopping carts and catalogs.
If you are selling just one or two items on your site you won't have much need for a shopping cart. However, a site with a variety of products should use the shopping cart system because it's the easiest way for your customers to shop. The easier it is to shop, the more they will spend, which is exactly the psychology supermarkets use. Shoppers are similar, whether in a supermarket or scanning through your website. And the nice thing about electronic shopping carts is that the wheels never go square, and you don't have to send a clerk out after the store closes to round up all the carts that have been left scattered around the neighborhood. Shopping carts are convenient and this is the preferred format on most web stores.
No matter how many shopping features you need, good shopping cart programs are completely customizable. That means you can create your online store to fit seamlessly into your site and function according to how your customers will shop. For example, if you want your customers to see some of your products immediately, you can feature them on the home page. If your customers are the browsing type, you can also create a detailed catalog.
Listed below are some features that you should look for in your shopping cart and catalog:• Set up multiple levels of categories and subcategories
• Hide or show products and categories at any time.
• Set multiple-choice lists for membership levels, duration, premium services or anything you want.
• Have the sales tax, if applicable, calculated automatically. (This will not be applicable for electronic content and information delivery)
• Provide the shipping options with details and rates and allow selection from these options. (This will also not be applicable when the delivery is online or through a download)
• Get order information delivered to your email address instantly and securely.Shopping online can often be confusing. Many orders are left abandoned because people get lost in product information or can't get through the checkout pages. You should ensure that your shopping cart makes navigation simpler for your customer. You customer should be able to:
• Navigate easily• Find items quickly using a Search facility.
• Zoom in to any product for a more detailed view.
• Move to other categories or products with one click.
• Add items to the cart on any page with a product.
• Checkout without hassles. Ideally, customers fill out one form, click to review it for changes, and then click to confirm it.
• Receive a confirmation email immediately upon placing an order.
Transaction is the most important aspect of any online paid or selling website. What payment options do you provide to your customer on your website? Are these options secure and reliable? Payments with credit card are the fastest and the most efficient form of a transaction on a website. There are certain key aspects of allowing payments with credit cards, which are discussed in the next section. However, the most vital aspect of the complete transaction process is security and authentication of the transactions on your website.
Let us first understand the whole process that takes place during an online payment transaction. Key participants of an online payment transaction are:
The Merchant – you in this case
The Acquirer – the financial institution that provides authorization to the merchant (you) that a given card account is active and that the proposed purchase does not exceed the customer's credit limit
The Payment Gateway – the system that processes merchant payments by providing an interface between the merchant and the acquirer's financial processing system
The basic steps of an online payment transaction should include the following:• The customer places an order online by selecting items from your web site and stores it in a Shopping cart. Once the order is complete, he/she proceeds to checkout and make payment for the goods or services. The customer order is then sent to you, including payment data. The payment information is encrypted by an SSL pipeline set up between the customer's web browser and your web server, using an SSL certificate. Security certificates and encryption is discussed in more detail later.
• You would then request payment authorization from the payment gateway, which routes the request to banks and payment processors. Authorization is a request to charge a cardholder, and must be settled for the cardholder's account to be charged. This ensures that the payment is approved by the issuer, and guarantees that you will be paid for your service or product. This process first requires that you set up a merchant account for accepting credit cards online. Your third party payment service would take care of this. A more detailed view on accepting credit cards online is given in “Merchant account for credit cards”.
• Once you are guaranteed that the payment is approved, you should confirm the order and supply the goods or services to your customer.• The confirmation (generally in the form of an email) will have an order summary of the items, their price, a total, and an order number. This process should be automated. As soon as the customer checks out, he should receive the notification.
• Transactions are settled, or routed by the acquiring bank to your acquiring bank for deposit.
There are many third party payment services that completely automate the whole process of online payment transaction. The most popular and trusted services are listed below.
ClickBank is one of the most popular and easiest services to use for payment processing online. Sign-up is quick and you get approved and running in one day.
The ClickBank Control Panel is easy to use. You can get familiar with the whole system in no time. It costs $49 to open a ClickBank account. This is pretty cheap when compared with other payment processing systems.
Also, ClickBank has a built-in affiliate program. No need to install any expensive scripts on your website. You can start signing up affiliates right away as soon as you open your account.
Once you open an account, all your transaction money gets deposited into your account. You are paid the full balance every two weeks.VeriSign Payment Services provide payment connectivity over the Internet between online customers, merchants, buyers, sellers, and the financial networks that move money between them. VeriSign is easy-to-use, secure and costeffective.
VeriSign offers a host of solutions for online payment processing. These are:Payflow Pro – This is the most basic form of online payment system that allows you to accept payments on the Internet. Payflow Pro gives you immediate connectivity to all major payment processors and is integrated with all major shopping cart software. Payflow Pro has a set up fee of $249 and a monthly fee of $59.95.
Payflow Link – This service also allows you to accept payment in the form of credit card and debit card on the Internet. Payflow Link works with all major shopping cart software. Payflow Link has a set up fee of $179 and a monthly fee of $19.95
Payflow Recurring Billing – This solution allows you to automatically bill your customers on a regularly scheduled basis through this convenient service. Payflow Recurring Billing is integrated with Payflow Pro and Payflow Link. Payflow Link with Recurring Bill has a set up fee of $193.95 and a monthly fee of $29.90 whereas Payflow Pro with Recurring Bill has a set up fee of $288.95 and a monthly fee of $89.90
Commerce Site Services – This package includes authenticating your online business, encrypting sensitive data with an SSL Certificate, and securely processing payments with any of the above online payment solutions. This package costs around $900.
PayPal is an account-based system that lets anyone with an email address securely send and receive online payments using their credit card or bank account. There are two types of accounts.
Personal Account (Buyer Account) - Personal accounts are for individual use onlyPremier/Business Account (Customer Account) - Premier and Business accounts include premium features, such as the ability to accept credit card payments and use the PayPal Shopping Cart.
PayPal charges Premier and Business accounts to receive payments. Personal accounts are free, but may not receive credit card payments. There is no set up fee and monthly fee for receiving payments with Premier and Business accounts. However, you are charged a certain percentage for every transaction.
Apart from credit cards, you may also allow customers to mail a check for payment. However, such forms of payment consume a lot of time to process and are not as reliable as online payments. You may have to wait for ages before getting your check in the mail.
iBill (http://www.ibill.com) has a wide range of services, including check processing and support for service-based billing, which makes it a very good solution for businesses, big and small, who want to add billing and credit-card authorization services to their websites.
iBill offers a wide range of plans. These plans range from an authorization service for companies with existing e-commerce sites (the Basic TP plan) to a catalog-sales plan for companies that have no back-end billing or shopping-cart mechanisms in place (the Catalog TP Plan). For the Basic TP plan, the fee is 25 cents per transaction, with a one-time setup fee of $149 and a minimum monthly maintenance fee of $50. The fee for the Catalog TP plan is $1 per transaction, with a one-time fee of $149 and a minimum monthly fee of $50.
Apart from these, iBill also has a reseller subscription service, which is targeted at subscription websites with recurring billing. The Subscription Sales TP service sets up iBill to handle back-end transactions for the purchase of content or services on a one-time or recurring basis, where a user is sent directly to an iBill secure Web page for payment processing. The user is then given a username and password for future transactions. The fee for this service is based on a sliding scale as a percentage of your billable.
In addition, there are two billing options that are unrelated to credit cards. The Web900 program charges customers via their phone bill; the charge appears as a 900-number charge, without the use of a credit card. The other service allows you to accept checks online, where the customer passes along his/her account information and iBill electronically transfers the funds from the account. However, the transaction fee for these services is quite high ranging from 15% to 35% per transaction.
For Merchant account set up you should always look for an e-commerce service and payment processing company that can integrate your merchant account needs with your payment processing, hosting, and shopping cart requirements. Integrated solutions mean you keep your infrastructure tight and your customer service centralized.
A merchant account enables you to begin accepting credit card payments over the Internet. It's a 'liaison' account linking your customer's credit card account with your own business account, functioning as a clearinghouse for credit card transactions. Sounds simple right? So what's the first critical error many online businesspeople make? They assume that all merchant accounts are alike.
Of course, this faulty assumption has led to much frustration - and more than one website crisis. Building a sound business foundation means finding the best merchant account for your business model and for the types of goods you sell. Though the rates of some service providers can be quite high, many of the cheaper solutions will end up costing you more in terms of poor service, inflexible limits, technical difficulties, or inept customer care. The key is finding the right balance.
First, competitive rates and reasonable fees are important, so make sure you do some rate comparison. Look at the transaction fees charged for every transaction performed online. Many services provide discount rates for every online sale you transact. This is something you should consider while choosing the right payment processing and merchant account setup service.
Some merchant account providers will charge you a fee for every charge back you incur. If your business typically receives a disproportionately high amount of charge backs, then charge back fees can hit you hard.
Another important aspect while selecting your service provider is the kind of Customer Service it provides. Communication is critical. Make sure your merchant account provider has the customer care platform to swiftly and reliably answer questions and resolve problems.
Remember, rates and fees are simply a part of the big picture. Getting a wider perspective on initially intangible items like sensible policies and superior customer service is essential in choosing the best provider for your unique business needs. Look for the details that distinguish one provider from the next. Security Certification and Encryption
As discussed earlier, the most vital aspect of a sound payment processing system is security and authentication of all transactions on your website. A customer needs to have complete faith in the security infrastructure of your payment processing system.
The most trusted technology for ensuring a highly secure transaction is by implementing Digital signatures via web server certificates that enable authentication and SSL (Secure Sockets Layer) encryption. SSL web server certificates lead to a secure online payment management system, to allow your e-commerce web site to securely and automatically accept, process, and e-commerce web site to securely and automatically accept, process, and bit SSL encryption is the world's strongest form of commercial encryption, and hence the safest. Your customers should be very comfortable with a 128-bit SSL encryption. The 128-bit SSL encryption is what all payment processing companies make use of these days.
SSL server certificates fulfill two necessary functions to establish trust for online payment:SSL server authentication -- Server certificates allow customers to confirm a web server's identity.
SSL encryption -- SSL server certificates establish a secure channel that encrypts all information sent between a customer’s web browser and your web server, protecting private information from interception over the Internet.
Only after you have built a web site and implemented SSL certificates to authenticate your business to customers and encrypt communications and transactions, you can address other crucial components of the payment processing system: enabling customers to easily pay for products and services online, and processing and managing those payments in conjunction with a complex network of financial institutions.
You have designed a very usable web site, you have hosted it using a very reliable web hosting company, and you have integrated a safe and trusted payment processing system with your website. However, all these can prove to be useless until you know your site is actually working and accessible. If you want to create an accessible website, you will need to test, test and test again.
A recent Forrester Research report reported that failure to ensure website quality will cost the average small or mid-size company thousands of dollars in wasted expenditures on website redesigns, forfeited revenue, and lost customers. Testing a website is a long and tedious task, but it's perhaps the most important task of all. There are numerous stages to testing, all of which are very important. Ranging from browser testing, to content testing, none should be excluded.
Visual Acceptance Testing is the first port-of-call for all webmasters. This type of testing generally ensures that the site looks as it is intended to. This includes checking the graphic integration, and simply confirming that the site looks good. In this stage you should assess every page carefully to ensure that each looks the same. The site should be tested under different screen resolutions and colour depths.
Functionality testing is perhaps the most vital area of testing, and one which should never be missed. Functionality testing involves an assessment of every aspect of the site where scripting or code is involved, from searching for dead links, to testing forms and scripts.
You should also test your payment processing system completely and thoroughly. After all, you wouldn’t want a potential customer to get stuck at the last stage and eventually leave the site just because there is something wrong with payment processing.
This stage of testing removes any errors in your content, and ensures that your site has a professional appearance. In this phase, you should reread each page on your site, and check for spelling and grammatical errors.
This test phase is completed in order to ensure that your website renders correctly on a user's screen. To begin with, you should test several pages from your site on different browsers such as Internet Explorer 4, 5, 6, Netscape 4 and 6, and Opera. This can be extremely important - if your site does not work properly with the Netscape browser, Netscape users will end up annoyed, and they'll go elsewhere.