This articles follows on from Part 1

Payment processing

Once a user has filled their shopping cart and is happy to proceed, they need some way to get the money from their credit or debit card to your bank. Remember that the shopping cart only creates orders and calculates totals – it doesn’t let the user pay for them. For that you need payment processing.

It’s a fairly complex process containing a lot of sub-processes that occurs when a user clicks the ‘Pay now’ button, but the basics of it are that a payment gateway acts as an intermediary between the shopping cart and the receiving account, usually an Internet Merchant Account (IMA).

There are two ways to go about setting up the payment gateway and IMA: bundled as a single service, or set up as separate entities.

Payment gateway providers such as Sagepay and RBS Worldpay offer packages that include the payment gateway and IMA as one service, or if you prefer to shop around for your own IMA they can offer the payment gateway as a standalone.

A payment gateway should cost around £20 per month, and your IMA will have various charges associated with it e.g. setup fee, transaction charges, monthly fees, discount fees etc. Transaction fees are typically a small percentage plus a few pence per transaction, decreasing as sales volume increases. For example Nochex fees start at 2.9% plus 20p per transaction.

It’s important to note that if you already have a Merchant Account from your bank to process offline card payments it is not the same as an IMA. You will need to apply for the IMA separately.

There are payment systems that work slightly differently to the standard gateway/IMA model, the most famous being PayPal.

PayPal acts as a payment gateway and pays the money into a PayPal account, which is linked to your standard bank account.

No matter which PayPal option you choose they will charge transaction fees. On the simpler packages that is all you pay, but your users will go to the PayPal website to enter their card details. There is an option called PayPal Website Payments Pro that allows users to pay on your site without leaving to pay on a third party site. Using Website Payments Pro costs £20 per month on top of your transaction fees.

SSL certificate

An SSL certificate is used to secure the flow of information between your website and your site users.  The last thing you want your potential customers to see is a box popping up to warn them that the information they are about to send will be transmitting over an insecure connection and asking if they wish to continue, particularly if it is address or credit card details.

Using SSL prevents this situation and ensures that personal information cannot be compromised as it passes over the internet.

Extending E-Commerce

Electronic Data Interchange (EDI) is a system that provides non-repudiated business transactions between you and your supplier, and is a powerful way to avoid all the issues that come with stock control and shipping administration.

If you have a relationship with a supplier who is willing to accept and ship orders on your behalf, EDI will integrate with your website and send orders to your supplier in a format their systems understand.

Even if you don’t hold stock currently but do send orders to your supplier manually, EDI will automate this process.

Somebody who knows what they’re doing to put it all together

An e-commerce website is a totally different ball game to a standard website. It’s as different as an airplane is to a car, so you need to make sure that you don’t trust the construction of it to a fresh-faced web designer with no experience of payment gateways, SSL certificates, hosting and integrating e-commerce systems.

Website NI have built the following successful e-commerce websites:

• Tony Kealys
• Contour Blinds
• Ramko Hydraulic Rams
• Meekin Fuels
• Arts & Crafts of Ireland
• Emma Hall Stationery
• Stucco Italiano

Summary

Starting an e-commerce website from scratch can be a daunting prospect, and a task that requires a lot of time, knowledge and management skills.  It can be very easy to get confused by all the jargon that surrounds online selling, and all the inter-dependent components needed to get an e-commerce website launched.

Inter-dependent is the key word in that last sentence.  Every component needs to be carefully considered beforehand as a wrong decision on one could mean another component is rendered useless.

From domain names to SSL certificates and everything in between, this article will clear the mist surrounding e-commerce websites, and explain each component’s function to help you get your online sales project up and running.

Domain

The need for a domain name is not unique to e-commerce websites, but it is worth mentioning briefly.  Choose a domain name that is easy to say, easy to remember and if possible contains the words that people will use to search for your products.

For example, a high street hardware shop called R. J. Martin could trade very well in their town, but online would be better with a name like martinhardware.com

One other very important thing to consider with a domain name is how it looks when typed out as one word.  Some examples of domains that weren’t thought through are at http://www.grupthink.com/topic/22/Easily_mispronounced_domain_names_What_are_your_favorites

Hosting

As with a domain name, every website needs a host.  This is simply a computer that your website is saved on, and which has an internet address that doesn’t change.  This means it can always be found by people who are looking for it.

Unless your website is getting a massive amount of traffic and has millions of transactions per month, the best place to go for hosting is a specialist hosting company. They look after backups, security, databases and other features that would be prohibitively expensive to run from a home or office computer.

When choosing a hosting company you should consider the location of the host computer (should be in the same country as your target market), customer service and of course price; but the most important consideration is the operating system.

The two main operating systems for hosts are Linux and Windows, with Linux being the most popular by a wide margin.  It is important to note that although you may be using a Windows computer the likelihood is that you connect to a Linux host when you view a website – the choice of host operating system is nothing to do with your own computer’s operating system.

So why is it so important to make the right choice between Linux and Windows?  The answer lies in your choice of shopping cart.

Shopping cart

‘Shopping cart’ has quite a broad meaning in terms of e-commerce.  It is the system that allows your customers to view products, add them to a basket, remove them from the basket and take them to a virtual checkout, creating a subtotal and shipping costs.  A shopping cart will also have an administrator section where you can add/edit/delete products and product categories, update prices, launch special offers, cross-promote items and manage orders.

In short, the shopping cart allows your customers to create orders and you to manage them.

Now, to get back to why your shopping cart influences your hosting.  Shopping carts are built by programmers, and in the main they use one of two programming languages: PHP or ASP.  Generally speaking PHP only runs on Linux hosts, and ASP only runs on Windows hosts.

Therefore if you have bought 12 months of Linux hosting and decide you like the look of an ASP shopping cart, one of them is going to have to go.

So why would you choose one over the other? What makes some people choose PHP and others ASP?  The following table sets out the main differences between each, however it is important to know that these are generalisations and there are exceptions, but in the main the situation is as follows:

*Modern PHP shopping carts such as Magento have reliable and tested extensions.

There are probably thousands of different shopping carts available, with some of the most well known ones being Magento, osCommerce and Actinic.

Tomorrow we look Payment Processing, SSL Certificates and Electronic Data Interchange in Part 2