E-Commerce Basics

 

If I could give only one piece of advice to those wanting an ecommerce web site it would be this: make absolutely sure that your web site developer has done ecommerce sites before and knows the necessary precautions.

To have an online store and accept payments you need several tools:

1. A payment System;
2. A way of verifying credit card numbers
3. A secure gateway for collecting private information

Depending on the product or service you sell and your payment provider, you may also need:

• a shopping cart;
• a merchant account; and
• AVS (address verification system).

Payment Systems

 

Merchant Account

A merchant account is your authorization from the major credit card companies to accept and process credit card payments. Your merchant account may charge extra fees to accept American Express and / or Discover card. The merchant account also establishes the rate you will pay to process credit card payments.

This rate can depend on the merchant account, your credit history and the type of goods you sell. Merchant accounts for established brick and mortar stores usually prohibit using the Internet to process more than a very small percentage of sales. Internet Merchant accounts come with higher fees for transaction processing since there is more risk when the seller never sees the credit card. The average percentage charged on a transaction is around 2.6% to 3.0%.

There can be more than one fee associated with a merchant account. For example it's typical to charge a percentage of each transaction, plus a small fee per transaction (usually from $0.25 to $0.50) and perhaps even a monthly statement fee (usually $10 to $25) for a list of your monthly transactions. There also maybe a monthly minimum processing fee; meaning even if you have no or very few transactions you will have to pay a minimum amount of approximately $25.00.

AVS Checking

In addition to a merchant account, you will need an AVS system. The Address Verification System (AVS) is a system used by credit card processing networks that attempts to limit identity theft. The AVS system matches the credit card billing address on file with the street address entered for the card at the time or purchase. This helps verify that the card is not stolen, but it doesn't necessarily prevent a person in the same household from using the card. It is not absolute assurance that the credit card is not being misused. But it certainly is a necessary tool for an online merchant.

The normal charge for AVS is around $.10 per transaction. However if someone runs a computer program to attempt to determine good credit card numbers on your check out system, that $0.10 per transaction can mount up, especially over a weekend when the typical safeguards are not in place. The AVS system is usually an option with your payment gateway provider.

Bottom line: setting up a secure way to process Internet payments can be fairly expensive. Attempting to process payments without secure processing methods can be even more expensive in the end.

E-Commerce Site Construction

If you need a great business web site, KatsueyDesignWorks is the place to start - and end - your search for a web site designer.

We provide:

• Custom Designs
• Custom Graphics
• CSS
• Search Ready
• Great Service
• Economical Prices
• Modern Browser Compliant