Category: Ecommerce

“Payment gateway transaction” is a fancy term for a fairly simple concept.  Assuming you did a lot of holiday shopping at a physical store this year, you probably used a “point of sale terminal.”  It’s that little machine at the checkout counter where you, or the cashier, swipe the credit card.  It’s very secure.  An online payment gateway is basically the same thing as a point of sale terminal, but it’s what you use for e-commerce.  With the Web Payment Software payment gateway, you get to accept credit cards and e-checks. But how does it all work?

Order Submission

First, a customer will submit their online order.  Once they press that submit button, their info gets sent to you, the merchant’s, web server.  It’s sent through a secure-socket-layer (SSL) encryption.  Websites are SSL-Secured if you see that little lock next to URL at the top of the web browser.

Payment Gateway to the Processing Stage

Once you receive the info, you send it to the payment gateway.  Again, this is SSL-Secured.  The payment gateway will then take that transaction to the payment processor.  This is (most of the time) the third party company appointed to handle credit card transactions.  They check for anti-fraud, the card’s country of issue, etc.  These are security measures that take just a few seconds.  From there, the transaction info is sent to the credit card company that is being used.

Credit Card Companies

If a customer used Discover or AmEx, the processor will act as an “issuing bank.”  Issuing banks gave the customer their credit card in the first place.  It’s also the same bank that pays the acquiring bank — and the acquiring bank pays you!  In the case of Discover or AmEx, the processor will directly approve or decline the transaction.  If the customer used a Visa or MasterCard, those companies send the info to an issuing bank.  The issuing bank will either approve the transaction, or decline it and provide a reason, such as having insufficient funds.

Processing Back to the Payment Gateway

The processor then takes the response, and then forwards it to the payment gateway.  The payment gateway takes the response and turns it into a legible explanation for both the merchant and customer to view on the computer screen.  As you probably know, the entire process is extremely quick — a matter of seconds.  At this point, the merchant knows if the order is cleared to ship.

Get Paid!

At the end of the business day, merchants submit their approved authorizations to the acquiring bank.  The acquiring bank deposits the money you’ve earned into your account a few days later.  And there you have it!

To summarize, the whole process looks like this:

Opening an online store without a plan is a recipe for disaster.  There are a lot of companies that pop up quickly, then die out two months later because they didn’t plan properly. Considering opening an online store? Follow these six steps!

Product Idea

If you’re attempting to break into a market that’s already over saturated with brands, try to take a different approach to your product. A good example of this is sunglasses. Companies that produce expensive sunglasses are everywhere. And just a few years ago, up-and-coming companies were trying to get innovative by producing really cheap ones that still looked good. It worked for awhile, but the market quickly became even more over saturated. A new wave of companies are now starting with a different approach: wooden sunglasses.

I truly believe online sellers have a much higher success rate when their products have a story. Slapping a cool design on products won’t sell them. People want a reason to buy something. One of the major reasons TOMS Shoes is a successful company is not because of how the shoes look. It’s because buyers know they’re helping a good cause.

Research Competitors

Once you have an idea for a product, thoroughly searching Google for competitors is a good place to start. You’ll also want to monitor interaction on social media networks. Then, talk to family, friends, and potential buyers. Conduct surveys. Even call your competitors and ask them questions.

Once you’re ready to turn your idea into something real, you should be doing all the legal/tax paperwork to register your business.

Set Sensible Pricing

When your online store is brand new, you’re the little fish in the big pond. You need to build up your credibility. Just because you think your products are worth $200 a piece, doesn’t mean everyone else will. Research pricing and set it sensibly, but not too low, or people will fear that they’re buying a low quality product.

Catalog Development

Developing a thorough catalog is an absolute must. Hire a professional photographer to take high quality photos of your goods. It will be well worth your money. Make sure your product descriptions are short, but packed with good content that will really make people want to buy your products. Make sure the catalog is well organized.

Marketing

Once you get your store off the ground, you need to promote it! Get your brand on Facebook, Twitter, and Google+ and start advertising it. Also consider e-mail marketing, or traditional advertising tactics like magazine advertisements. Keep your customers engaged with unique, fresh content that they’ll want to keep coming back to see.

Customer Service

Customers can’t truly see the product they’re ordering until it arrives at their doorstep. And they want to be sure that all issues will be taken care of if something goes wrong. Make sure you have superior customer service. Big stores like Amazon and Backcountry.com are known for their good customer service. They’ve built a following of people that will always buy from them, even if they can find the price cheaper somewhere else.

You’ve seen the term everywhere.  E-Commerce, eCommerce, even E-Business — it doesn’t matter how you spell it, it’s the same thing.  E-Commerce is any type of business transaction that involves a monetary exchange over the internet — on a computer or cellphone.  This can include shopping, banking, renting, and so on.  And since it is 2014, e-commerce is growing faster than ever.  Why? There are a handful of reasons. But first, let’s review the types of e-commerce.

Types of E-Commerce

B2B – Otherwise known as Business-to-Business, this is any exchange between a distributor and a retailer, wholesaler and a retailer, etc.

B2C – Also known as Business-to-Consumer, this is the most common type of E-Commerce, and where Web Payment Software specializes! If you’re buying a vintage piece of art, movie, etc., you’re participating in B2C E-Commerce.

C2B – This means Consumer-to-Business. A consumer will post something he/she needs done, like a video. Businesses then bid on the project, and the consumer decides who he/she would like to work with.

C2C – Consumer-to-Consumer e-commerce is growing at a rapid pace. The most common example is eBay, where two customers interact to make a deal. One customer pays for the item, then the other ships it.

The Benefits of E-Commerce

1. The prices are usually lower. Take a second to think about how many expenses there are for a brick and mortar business. You need to for pay employees, electricity, insurance, etc. With an online business, you’re almost always eliminating the need for humans. This keeps expenses on the business down, and the price of goods lower for shoppers.

2. You can compare prices. Think the price of something seems high? You don’t need to hop in the car and search for the best price. You just need to compare by opening a few tabs on your internet browser. This also helps when you’re running an online business, because prices of competitors often fluctuate.

3. It’s convenient. No need to worry about store hours. Shop or do your banking anytime, anywhere. Shipping can be done extremely quickly nowadays, too. Delivery drones soon, anyone?

4. Your market can be global. As a business owner, you won’t need to market only to people close to where you’re selling.

As you can see, e-commerce has many different parts that bring the whole process together. With the rise of mobile accessibility and social media, e-commerce will only get larger. Why do you find e-commerce useful?