E-Commerce FAQ

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What is E-Commerce?

Electronic commerce which is generally known as Ecommerce in short is the term used to refer to buying and selling products or services online. These can be physical goods and services or virtual ones such as downloadable software, videos, games and music. Usually, an online store is created where goods and services are displayed. A shopper can browse the items, place an order, choose the shipping method, destination and "Check Out" with just a click of the mouse.
Other terms commonly used are e-business for online businesses and e-tailing for retail selling over the internet. Any type of electronic business transaction is still ecommerce and this goes beyond online buying and selling. It includes electronic payments and fund transfers, inventory management, supply chain management, exchange of data, online auctions, internet banking, online ticketing, Mcommerce "mobile commerce" and Fcommerce “Facebook commerce"etc.

What is a Shopping Cart?

A shopping cart is software used to enable shoppers to select and pay for the items they want to buy on a site, by adding them to the cart or basket for purchase. The shopper may browse and select the items, add them to the virtual cart, place an order and pay for them using credit cards, debit cards, PayPal, electronic checks or any other method. The shopping cart calculates the total cost, handling and shipping charges as well as taxes. It also performs other functions like inventory control management and the re-order level to avoid the online store going out of stock.
Shopping carts' function is crucial for every e-commerce business. It enables you to create your Web site and integrate an online store, add buttons to enable shoppers click the items they want to purchase and add an online store as a new web page to an existing Web site. The shopping cart should be user-friendly, quick and efficient so online shoppers can purchase products easily without hassles.
Choosing the right shopping cart is important if you have to start selling right away. The most popular shopping carts are Magento, Cube Cart, osCommerce, Zen Cart and Agora Cart.

What do I need to set up an ecommerce Web site?

Setting up an Ecommerce website depends on whether you want to do-it-yourself or you want to engage a web designer. If you have some technical knowledge you can set up the Web site yourself from scratch. This has been simplified by the use of video tutorials and ready-made Web site templates which you can use even if you have no technical knowledge. It is easy to customize the templates to have something of your own regardless of your skill level. However, the fundamentals are still the same.
Not all ecommerce Web sites are the same. It depends on which transactions you want to carry out and the security system you want to provide. If you want a fully featured Web site which processes "real time" online transactions and accepts credit card payments within a secure environment, you will need:
• A domain name
• A web hosting account i.e. shared hosting, VPS or dedicated server
• SSL Certificate
• A shopping cart
• Internet-ready merchant account or third-party payment processor i.e. PayPal
• Payment gateway
• A dedicated IP address which is optional

How much does it cost to set up an online store?

You can start an online store using minimum investment. There are low-cost pre-designed templates which you can download and customize instead of creating a Web site from scratch but if you need to engage the services of a web designer you will need to pay hundreds to thousands of dollars depending on the online store you want. After you have set this up, costs of ecommerce plans range from $20-$130 per month. This will depend on the number of traffic you receive on the Web site, the transactions you handle and the type of security you provide.
Some costs are once-off while others are on-going. You will need to pay for the shopping cart software, web hosting account, merchant account, payment gateway and SSL Certificate all of which depend on the provider and the services you require.

I already have a Web site. Can I integrate an online store into it?

Yes. It is possible.
Integrating an online store into your Web site is easy and straight-forward. If you are a new customer you can buy an ecommerce hosting plan which comes with all the features that you require. If you are an existing customer all you need to do is create you online store and provide a link from your website to the store.
You can also add the products and services onto your existing web pages where shoppers can view them and buy from you. Use clear images with attractive colors which shoppers can view from many angles, be able to zoom and check relevant information. People buy what they see. Setup the different styles, sizes, prices, colors and product descriptions to attract the online traffic.
What are third-party online credit card processors?

A third-party processor like PayPal accepts online credit card payments on your behalf if you do not want to do this yourself. It incorporates a merchant account and a payment gateway into one. The shopping cart is usually part of the deal although not always.
Many start-ups and small businesses may not afford the fee charged on a merchant account so in such a case a 3rd party processor is the most suitable for handling online payments to limit the bite on profits.

What do I need to handle “real time" online credit card transactions myself?

To be able to handle online credit card transactions yourself you will need to have an internet-ready merchant account, a payment gateway account and obtain a Secure Sockets Layer SSL Certificate.

What is a Merchant account? How do I get one?

Accepting credit cards is vital for any type of business whether it is conducted online or offline. A merchant account is a bank account that enables you to accept online credit card payments. There are different kinds of merchant accounts such as the brick and mortar type of retail merchant account and the "internet-ready" merchant account which is a specialized type used by online businesses. If you have a Web site you will need to get a merchant account before taking credit card orders to help you payments from the customers' bank accounts.
The internet-ready merchant account is convenient because it enables you to accept "real time" credit card payments without anybody's intervention. If you choose accepting payments directly, you will need to set up security systems to prevent fraud and to protect customers' sensitive financial information. This type of account has additional security checks to greatly minimize any chances of fraud since online payments are more risky. There are many internet-ready merchant account providers.
You can get your own merchant account from Chase Merchant Services, E-onlinedata and PayQuake or any other provider of your choice that supports payments from the following-:
• Authorize.Net
• CyberSource
• VeriSign/PaymentNet
• LinkPoint Card Service
These are reliable and affordable merchant account providers that charge minimal fees and provide online processing and payment systems to give you and your customers a hassle-free experience. If you already have a merchant account from another provider you can still use it to accept credit card payments that are presented on your Web site.
The merchant enters into an agreement with the merchant acquiring bank. Choosing the right merchant account is beneficial to you and your customers. It is convenient it saves money and time for you as well as improves your cash-flow.
Acquiring banks offer payment processing through gateway accounts on behalf of merchants for a fee.

What is a payment gateway? How do I find one?

A payment gateway such as Authorize.Net is a service that authorizes payments for e-businesses, brick-and-mortar businesses and online retailers. It connects your ecommerce store with your online merchant account provider. It also verifies whether the customer's credit card account has available funds to purchase the goods and services ordered on the website within seconds.
Some merchant account providers have their own payment gateways although the majority of businesses use third-party payment gateways. You can choose a merchant account that also provides a payment gateway service or get them separately.
The payment gateway service automatically processes, verifies and accepts or declines the payment transaction between the customer and the merchant in "real time". This is done on behalf of the merchant who pays a fee for the service. It enables the merchant to accept or decline credit card payments, electronic checks and other electronic payments from customers.
When a customer submits an order of goods or services on a website, mobile phone or other payment medium, the credit card transaction is presented to the payment gateway to facilitate authorization and transfer of funds over the internet. The merchant forwards the credit card information to the payment gateway that processes the payment transaction securely.
This is done by encrypting the information as it passes from the customer to the merchant then to the payment processor and to the credit card issuer back to the payment gateway and to the merchant to fulfill the order. All this is done using secure internet connections until the money is deposited in the merchant's account. The money is then transferred to the merchant's bank account.

How can I assure my customers that their transactions are secure?

Customers are weary about submitting their credit card details or other sensitive information over the internet. For them to do so, you have to assure them that their transactions will be secure. If customers are not satisfied that the information they provide on your Web site is safe they will not buy from you. You will need to assure them by securing your site on a server that supports Secure Sockets Layer SSL or the recent Transport Layer Security TLS which has been based on SSL. It is also important to comply with the "Payment Card Industry Data Security Standard" PCI DSS and have regular audits from time to time.
A site that has been secured by SSL has a special symbol like a closed padlock which is displayed on the browser window. The URL of a secured site starts with HTTPS instead of the usual HTTP.
What is SSL (Secure Sockets Layer)?
Before customers give out their credit card details, or any sensitive personal information they want to be sure that this is not misused by unauthorized users. Secure Sockets Layer is the protocol which is used to ensure security of customers' transactions over the internet so that unauthorized users do not access this information and that it is secure as it is presented on your Web site and as it travels through the internet. When a site is secured with SSL the private information is encrypted using a public key and decrypted using a private key when it reaches the designated user to avoid fraud and data tampering.
An SSL secured site has a symbol in form of a padlock icon on the browser window or a green address bar that indicates that the site is secured. In this case the information you provide whether it is credit card details or contacts is only seen by the owner of the website.

What is an SSL Certificate? How do I get one?

A web server requires an SSL Certificate to be able to utilize the SSL protocol. To obtain the SSL secure connection you will need an SSL certificate which is a digital certificate that enhances security. For this to be possible, both the source and the destination must be secured with SSL. The website that is receiving the credit card information and the website it sends the information to, should both have obtained an SSL Certificate.
An SSL Certificate contains relevant information such as validity duration, Certificate ID, name and email address of the owner of the SSL Certificate etc.

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