On This Page: Doing e-Business | Shopping Carts | Payment Processing Systems | Your e-Commerce Solutions
e-Business or Electronic Commerce (e-commerce) is the online buying of brand products and services over the Internet. There is very little that can not be sold by this electronic store front and is an every increasing reason why small businesses need websites.
Doing e-Business
Setting up to sell online is not complicated any longer. There is still significant work to be done still in errecting an e-commerce enabled website and of course some paper work to potentially do with a bank for credit card ordering, however overall it is far more painless than a few years ago.
There are different ways to do e-commerce, but the common staples are:
- a product or service to sell
- a way to create and process and order
- a way to get money from the buyer
While the first of these is obvious, the second and third are where some additonal detail work comes into play.
Shopping Carts and Order Systems
There is no shortage of shopping carts and order building systems including open source, commercial license and even custom written. Some are designed to reside within common and popular Content Management Systems while others are best sitting alone and still others are hosted pay-per-use or on demand systems (like PayPal).
The general purpose is to take an item from your website's catalogue page and "add it to the cart". This is literally how it sounds except there are no squeeky wobbly wheels involved. Cart software then tallies up the order of items, adds taxes and shipping and prepares a total ready for payment collection.
Payment Processing
This is the most challenging component of creating an e-store. Three major methods of payment collecting can be used:
- Pay-for-use service (like PayPal)
- Payment Gateway Server
- Self-Hosted Payment Software
These are ranked in order of complexity and cost to implement.
User-Pay Systems
A system like PayPal can be up and operating in a few days at most provided you are able to provide bank routing information so they can deposit payments to you. These types of services generally have a higher "discount" rate (money they take off the top for doing the transaction) than more complex merchant account solutions.
Payment Gateway System
Next in line is the payment gateway. There are several of these partnered or run by the five chartered banks in Canada who setup and assign merchant account numbers to your business and bind them with the primary chequing account at their institution. Typically there is a security deposit and questionairre that is required to sell online with this arrangement due to the pervieved risk and cardless transactions.
When clients "check out" from your cart, a data packet with the total is handed off to the payment gateway online which is skinned to look like your branding. The client then enters their credit card information and the transaction is verified and cleared in real time and the sales transaction complete. A data packet is then sent back to your shopping cart software on your website that says if the transaction was successfully paid or not. If it was, the sales receipt is printed and you are told to ship the product to the buyer. If the transaction was not approved, another form of payment is requested or the order cancelled. Settlement of the charges are deposited to your account usually within 48 hours (accept American Express who has a settlement procedure of 8 business days).
Most payment gateways have a flat-rate service charge of about $75 per month regardless of whether there is activity or not (you pay even if there are no sales). When there is a sale, there is also a 1.75% - 5% discount taken off the sale price of the item. This is profit for the card issuer and is billed monthly to your bank account.
Self-Hosted Servers
In the two prior examples, the security and responsibility for the transcation and most importantly the credit card information was that of the bank or provider. The last version and most expensive and complicated requires you to host banking software or other custom coding to process the transcations in real time from your own hosted server. The security is fully your responsibility both from an aspect of protecting the credit card number and transaction over the Internet as well as ensuring the server itself that is doing the transactions are secure physically and from a virus point-of-view.
Issuing banks typically will require either a site visit to inspect the server or if it is in a secure data centre for you, a letter from their operations manager as to the levels of protection they are safe guarding the box and data with. Lastly, the seller in this scenario is also responsible for obtaining and keeping current the Secure Socket Layers (SSL) certificate which gives an encrypted channel between the buyer and the seller. This is the magic that makes the padlock and "https" appear on your web browser.
This last type of e-business is extremenly hard-core and expensive. It is estimated that this only be seriously considered when siginificant traffic and monies are changing hands through one's e-business store front(s).
Your e-commerce
There are many great opportunities and also many options to consider when thinking about selling online. Falcon Innovation Group's website design select packages are great starting points for e-commerce and we can coach you through this process and ensure that the right e-commerce solution is placed for your new website selling program. Call us at 1-866-570-5433 for more information or to set-up a meeting.
