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WEB HOSTING FAQS

E-Commerce Hosting FAQ
By: Developer Shed
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    2004-09-14

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    This FAQ details the ins and outs of what is required when pursuing online sales. Learn what is involved, what the commonly used ecommerce terms mean and what is needed.

    What is Ecommerce? 
    Ecommerce stands for electronic commerce; we will use the term Ecommerce to refer to Internet sales of services and products. In particular we will use it to refer to doing the whole process online: from selecting what is being ordered to accepting payment.

    How do I know if I need an Ecommerce Host?
    If you want to sell products or services online then you are going to need an Ecommerce host. Unless you want to take a chance that people will send you a check to order a product from a site. Just think about how many times have you sent a check though the mail to order something online from a web site; that number is probably zero.

    Do I have to accept credit cards? 
    Yes is the short and simple answer.

    Ask yourself how many items a week you buy that you really do not need. Then figure out how many of those items you bought using a credit card. In retail stores it is pretty well known that accepting credit cards increase impulse purchases between 50% to 80% and that is why any retail store you walk into accepts credit cards.

    When a customer walks into a retail store the customer can pay with cash, check, or credit card. In the online world cash is not possible and no one ever sends in a check to buy an item from an online merchant. Accepting credit cards online is the only way to have a viable business.

    What is shopping cart software and do I need it? 
    Shopping cart software is software that runs on the web server that keeps track of the items or services the customer wants to purchase. Once the customer is done browsing and has selected all the items and/or services they want to purchase then they go to the checkout area. In the checkout area is where the customer will put in all their personal information and their payment form. Using shopping cart software allows the developer or owner of the web site to get the site up and running a lot faster than if they were to create the entire shopping experience from scratch.

    You can get away without using shopping cart software if you only have 1 or 2 items and/or services to sell. However, if you have more than that, then you should seriously consider using shopping cart software. The great thing about shopping cart software is that most hosts will let you test the shopping cart software even before you setup your account with them. So make sure you test out all the versions you can find to figure out which one you like best.

    How do I accept credit cards? 
    There are two different ways to accept credit cards. One is to sign up for a service like PayPal where they actually accept the credit card and then they send you the money. This might be okay for a smaller site but if you are serious about doing Ecommerce then you should get a merchant account.

    A merchant account is very similar to a bank account but it is only used to accept payments from credit cards and online checks. The money is then transferred into your normal business account. The time it takes to go from the merchant account to your business account depends on a few variables, which will need to be discussed with the company you setup your merchant account with.

    What is a virtual Terminal? 
    When a customer is in a store then the merchant has access to the credit card and can process it though a “terminal” right next to the cash register. In the online world that is not possible though. In the online world we have “virtual terminals” which is where users give all their personal information and credit card information. This information is used to verify that this is really the owner of the card. If the information the customer gave matches what the credit card company has on record then the sale will go though.

    Is PayPal a good way to accept credit cards? 
    Customers want to pay the way they want to pay so being able to accept PayPal payments is a good idea but it should not be the only way you accept payments. Having a number of different ways a customer can make a payment will increase impulse sales and that will significantly increase your bottom line.

    What is real-time credit card processing? 
    Real-time credit card processing is when a user enters their personal information along with their credit card information into the order form and they get a response as to if their credit card was accepted or rejected right away. Most merchant account and software combinations allow for this but some do not so make sure if you want to do this that yours has the ability.

    The other option instead of real-time credit card processing is manual credit card processing. What this means is if a user enters an order at midnight then it would go into a queue, which you would then have to check in the morning. If the order looked legitimate you would then process the credit card. Doing the credit card processing manually just adds another step in the process and the more steps there are the more chances there are that a mistake will be made.

    Should I look into accepting checks online? 
    Yes you should; you want to increase the number of ways a person can pay because it will increase your sales. A good number of merchant accounts do check verification online so ask your merchant account provider.

    Do I need SSL? 
    Yes you need SSL because it secures the information being sent between the users computer and your web server. If this transaction is not secured then personal information along with credit card information could fall into the wrong hands.


    Glossary of terms:

    SSL
    Stands for “Secure Socket Layer” which is a web security protocol used to protect data being sent between the web browser to the web server.

    Merchant Account
    An account setup so that a business can accept payments for products or services with by credit card.

    Shopping Cart
    Shopping cart software is software that allows the owner of the web site to easily add new items to their store without any programming. The software also allows users of the site to easily add multiple items to their list of items they want to buy and then checkout with all items at once.

    Virtual Terminal
    This is a web-based interface for processing credit cards.

    Check Verification
    This is the ability to accept checks online from a customer without actually having to have the customer send you the check.


    DISCLAIMER: The content provided in this article is not warranted or guaranteed by Developer Shed, Inc. The content provided is intended for entertainment and/or educational purposes in order to introduce to the reader key ideas, concepts, and/or product reviews. As such it is incumbent upon the reader to employ real-world tactics for security and implementation of best practices. We are not liable for any negative consequences that may result from implementing any information covered in our articles or tutorials. If this is a hardware review, it is not recommended to open and/or modify your hardware.

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