Timothy
Parker Consulting Incorporated
|
|
|
|
Credit Card Processing As we continue to look at what we need to set up our e-commerce site, a few small items need to be taken care of. The first is money. Not ours, but our customers. How are we going to collect it? Most e-commerce sites allow you to pay by credit card, the most friendly and convenient method for customers. We need to be able to offer the same capability, unless the product or service we are selling doesn't lend itself to this kind of retail sales. My site, for example, is offering preconfigured servers. While there may be some credit card sales, I expect I'll be dealing with purchase orders and cheques from companies and organizations for the most part. But I will also offer credit card handling, as customers request it a lot Your site may deal only with credit card sales. Flexibility is good, of course, but don't overly complicate your task by supporting too many little-used features. Providing support for credit card sales on our e-commerce site requires two components: software to securely capture the customer's credit card information and verify it, and a merchant account to handle the credit card transactions themselves. The first can be dealt with through SSL (Secure Socket Layer) versions of most Web servers. Products like Netscape's Web server provide automatic switching to the secure transaction mode, allowing you to design Web pages that accept credit card and expiry numbers without fear of the information being intercepted. If you've ever gone to a site that informs you that the site wants to switch to secure mode in your browser, you've been to a secure site. While most Web pages are transmitted with no encryption, secure pages are sent with 128-bit encryption (40-bit in some cases) to scramble the information. Secure pages run a little slower and have higher overheads than non-secure pages, but you do need to offer secure pages for payment information. Customers will demand it although some customers simply don't trust secure pages. If you are hosting your web site on your own machinery, you will need to purchase or install a Web server package that supports secure mode. As mentioned, Netscape offers an excellent package. Microsoft's Internet Information Service (IIS) also supports secure mode. On the inexpensive side, the Apache Web server (designed for UNIX and Linux) provides free secure server software. If you are having your site hosted by another company, such as your ISP, then they will set your site up with the secure Web server. As far as I can tell, all ISPs offer this service as part of the basic subscription price. So we can get the credit card information captured securely, what about processing it? You may already have a merchant Visa or MasterCard account, which can be used on your Web site. If this is the case, you will need to either manually enter the information a customer leaves on your Web site into your transaction terminal, or better, interface to the merchant account electronic processing center automatically. This will provide validation of the customer's card and account as well as ensure you have the funds credited to your account properly. All the credit card issuing companies offer support for electronic processing, so you should talk to your bank or card issuer about their services. Usually there is no additional charge for electronic processing. If you don't have an existing merchant Visa or MasterCard account, what do your do? You could apply for an account but this is a frustrating and annoying process. Usually you have to justify the sales volumes, which is difficult to do for e-commerce sites. (Many of the merchant account representatives just don't understand e-commerce. You'd be better off selling pencils from a street corner!) If the card issuer does deem you to be a reasonable risk for a merchant account, you still may have to pay a hefty deposit and a good percentage of each transaction to the company. One site I know which had very good potential was told they could have a merchant account only if the owner posted a $200,000 bond and paid 5% of every transaction. That's ridiculous and beyond the reach of most of us. Fortunately, there is an alternative. There are many sites in the US and a few in Canada that offer pass-through credit card processing services. When a customer decides to buy from your e-commerce site, they are passed through a hyperlink to the card processor, which collects, verifies, and authorizes the transaction. The customer is then passed back to your site, usually transparently. The card processing service then collects a percentage of your transaction (usually around 5% but some are higher, some lower), and you can have money sent to you for your share. There is usually no setup cost associated with these card processing services, as they make their income from the service fees. A few ISPs do offer credit card processing services themselves, but most don't. If your site doesn't lend itself to credit cards, then you save yourself a lot of trouble. However, consumers expect credit card support and you should seriously look at offering it, even if you think it doesn't fit your site's profile. |
|
Send mail to
tparker@tpci.com with
questions or comments about this web site.
|