This article will address on some of the things to think about when setting up a shopping cart or e-commerce solution on your website to take online credit card payments.
To setup a shopping cart to take credit cards, you will need the following:
- An internet merchant account. A merchant account usually requires a business bank account to be established (which usually requires a tax ID depending on the state).
- A payment gateway. Some banks may bundle the merchant account with a preferred payment gateway.
- A web hosting account
- An SSL (Secure Socket Layer) certificate so credit card numbers can be safely transmitted. This is required for PCI compliance.
- A dedicated IP address for the SSL certificate
- A shopping cart application within your website
Merchant Accounts
An internet merchant account requires an application an approval from a bank. Do shop around. Internet merchant accounts are not created equal and different banks have different terms, percentages, and features. For example, in Tekro’s experience, we discovered one bank would not deposit funds until 48 hours or so after the transaction. Tekro switched banks and now funds are available the next business day, sometimes less than 24 hours. This alone can be very valuable.
Payment Gateways
The payment gateway is the interface between your e-commerce website and the bank. When your site takes a credit card, the moment the page is submitted, the payment gateway is contacted. A conversation between your website and the gateway takes place. The conversation is about getting authorization for the payment. The payment gateway determines if the transaction is good and if so, authorizes the payment and lets your website know the transaction was successful. At this point, your website lets the user know the payment was successful. But behind the scenes, the payment gateway is working with your customer’s bank to transfer funds to your bank account.
There are many payment gateways available. Tekro prefers Authorize.net as its payment gateway. It is a well known and established gateway and almost every shopping cart supports it.
SSL Certificate and Dedicated IP Address
The SSL certificate encrypts the traffic that goes between your website and your customer. Typically, everything on the internet is transmitted in plain text, where everyone could read the content if they really wanted to. But SSL provides a means to encrypt the data so only the website and the customer’s computer can read the data. SSL also ensures the website is who it says it is. To acquire an SSL certificate, your business identity has to be proven to the SSL provider. Once proved, they provide the SSL certificate and it can be installed on the server.
To install the SSL certificate, it requires a secure web server which requires its own dedicated IP address. One trick hosting providers can do to lower costs is share IP addresses. For SSL to work, the IP address can not be shared.
Once the SSL certificate is installed, you can enter your website’s address with https:// (not the added “s”) instead of just http://. This lets the browser know to use the secure server and the SSL certificate and to encrypt all the data going to and from the browser.
Without an SSL certificate and a dedicated IP address, you can still run a shopping cart, although without the added security, your customers’ credit card information is at severe risk of being intercepted. This can tarnish your business’s reputation. Although customers today are savvy to recognize a website with and without SSL and likely will not purchase from a website that does not have an SSL certificate.
Shopping Carts
Shopping carts come in many different flavors. There are shopping carts for specific functionality and carts that are more generic for selling any product. Carts are designed with different languages and this is important to find one that will fit the requirements of your existing website (if you don’t have a website, then keep in mind when you do shop for one what features it will need). Shopping carts may be freely available to download and use and others may require payment. You can even custom build a cart, although this requires time and expertise in credit card handling, security, and web programming and development.
At Tekro, we have worked with osCommerce and Zen Cart. Both of these carts are free to download and use, have been around for quite some time and have had the bugs worked out of them, and provide many features. Other shopping carts will likely work fine too. Make sure to review and demo several carts before making a final decision. Also make note what payment gateways they support.
Getting Started
The difficult thing about getting started with a shopping cart is figuring out where to start first. Tekro recommends picking out a shopping cart first. Find a shopping cart which will match your needs and fit within the features of your website (for example, if you find a PHP based shopping cart, make sure your web host provides PHP).
Once you picked out a shopping cart, note the payment gateways it supports. You might wish to print these out or jot them down. You may need them while you are at the bank asking questions.
The next step is to find a bank that offers an internet merchant account. You will want to research what the costs and terms are. Make sure they will be able to work with a payment gateway that your shopping cart can use. Note, this process can take a bit of time. Tekro once completed this process in 1 week (merchant account and payment gateway) and with another bank it took 3 months.
Setup your merchant account and find out from the bank how to go about getting setup with the payment gateway. The bank may or may not set you up automatically and may require you to contact the payment gateway to get setup. If so, you will need the merchant account information the bank has provided you once approved.
After getting the merchant account and payment gateway setup, it is time to get the SSL certificate and dedicated IP address. Both of these can take a little bit of time, usually up to a week or so depending on how quick the web hosting provider is. They may do all the work or they may provide instructions for you to install the SSL certificate. Handling of the dedicated IP address is almost always done by the hosting company and they will handle moving your website to the new IP address if you are already hosting with them.
With the SSL certificate installed and working, and all of the bank account information setup, it is time to install the shopping cart, test it, and then open it for business. It is recommended to run a couple test transactions to make sure the shopping cart is communicating with the payment gateway. Once those work, it is recommended to do an actual transaction with a credit card in your possession. That way you can verify the funds have been taken from your credit card and deposited into your business banking account. You can also verify how long it takes to go from one account to the other. If this works, then it is time to open the shopping cart for business!
Tekro LLC has setup several shopping carts and runs a shopping cart of its own to manage its hosting business. If you are a customer or thinking to be a customer, contact us and we will be happy to provide assistance in getting your business setup to take online payments.