| by Peter
Cooper (1)(2)(3)(4)(5) Chapter
2
How to Implement a Merchant Account Sketching out your
digital shop Before you apply for an e-commerce merchant
account, you need to establish a strategy for your new venture. Are you selling
memberships? A wide range of products? A single product? An ongoing service? Whatever
your situation, you'll need to approach the task from a certain direction. Decide
what your goals are, and stick with them until you're established. Choose
suitable software for your e-commerce site You're probably
going to need software to run your e-commerce site, especially if you have a large
catalogue of items to sell. The software will act as an electronic catalogue,
allowing you to enter your wares, categorize them and price them accordingly.
E-commerce software usually allows you to enter your own design templates so that
your site looks the way you want it to. Even if you're only
going to be operating a simple membership service, you'll need a program to handle
new subscribers and supplying passwords, although there are some specialist providers
who can supply these services directly on their own servers. How
an e-commerce site works To establish what needs to be
done before applying for your merchant account, let's run through a sample e-commerce
site. Your customer arrives at your site, and is invited to browse a database
of items. Product descriptions, pictures , and prices are all displayed to the
customer by the database driven e-commerce software. They pick and choose from
a variety of products and these are placed into their 'shopping basket'. Now
the user clicks on the Checkout button. Having decided to purchase their chosen
items, the user fills out a delivery and payment form, handing over their credit
card details, address, and other relevant information. Where do things go from
here? This is the point where different systems/methods can
be used. If you're using an online authorization company who provides a secure
server for your orders to be sent to, then once the user submits their payment
details, it will go to the processors secure Web site, they will pass through
the instruction to debit the card, and e-mail you the rest of the details (delivery
address, product choices, etc.). On the other hand, if you
run your own secure server, the details will be sent to your own server. Then,
depending on the setup, forwarded onto your credit card processor via programs
installed on your server, or stored on the server for you to send, or process,
manually. Most Merchant Account Providers can provide you with
equipment and software to allow you to process all credit card orders yourself,
saving you from paying an online credit card processor to do it. However, this
means you will have to provide the secure server for accepting the credit card
information, and then you'll have to take each order and run it through your software
or credit card terminal. Using an online credit card processor simplifies matters
by sending the details straight to them, and they process the orders automatically. After
Processing After the card has been processed by yourself,
or your online authorization company, the customer's card will be debited, and
your Merchant Account credited within usually a couple of days. The Merchant Account
Provider will also take a commission of approximately 5% per transaction. Once
you have the details of the order, the products selected and the delivery address,
you must take action straight away and e-mail your customer a digital invoice,
or at least a confirmation of the order. Many e-commerce software packages will
deal with this for you, so there shouldn't be a need to worry. You
will want to arrange dispatch of the product promptly, to reduce the risk of 'chargebacks'
when people become dissatisfied with waiting for their orders. Chargebacks cost
you money, and won't put you in good favor with your Merchant Account Provider. Linking
your Credit Card Processor with your Merchant Account
If
you opt to use an online credit card processor in conjunction with your e-commerce
software, you will need to supply the credit card processor with details to link
transactions to your merchant account. When you get a merchant account, you will
be provided with a e-commerce merchant account number, which you can supply to
the credit card processor. When a transaction comes through on your account, it
merely delivers the money (minus commission) to the specified merchant account.
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