Ecommerce 101 - WordCamp Birmingham 2013

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An overview of the Ecommerce process. Presented at WordCamp Birmingham, August 24, 2013.

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  • Keep the user happy – a good cart stays out of the way as much as possible
  • * Retail – swipe card, POS contacts issuing bank to see if funds available, responds with approval or decline* Ecom – cart collects payment info, sends to gateway, contacts issuing bank, passes approval or decline back to cart which communicates with customerIf approved, issuing bank provides approval code, recorded by gateway for use in settlement processMost gateways offer a Virtual Terminal for manual transaction entry* Authorize.net is the largest and most popular gateway, many alternatives exist
  • Gateway is tracking list of approvals throughout day. Submits them in a group (batch) to merchant account for settlementFor their trouble, gateways charge fees… *
  • Merchant account does nothing until it receives a batch from the Gateway – previously authorized charges… like IOUs from issuing bank.* Merchant account is a bank service, * typically a different company than the Gateway (make sure the gateway you choose can talk to your merchant account)* Merchant account like a collections agent, contacts issuing banks to receive the promised payments (next slide visual)
  • A merchant account is provided by a bank… every time a transaction walks down hall of bank, fees tacked on by every cubical it passes.Discount Fee – 2-6% (divided betw merchant acct provider, gateway, and cc provider)Monthly Minimum – min amt if discount fees don’t exceedCS Fee / Statement Fees / Annual Fee (some of these can be negotiated)Chargeback Fee (customer challenges a charge on statement with their cc provider) - $15-$30 (sometimes whether successful or not)
  • Banks weigh risk of merchant before issuing them an account. Stringent process. Frequent denials.Be sure to get approval before site building… (freelancers make sure client has approval)
  • Summarize process
  • Combine the functions of the payment gateway and merchant account with a focus on convenience for the merchant.
  • Important because rarely connected directly to server that hosts site visiting.Data back and forth passes from comp to comp until destination. Possible for what sending/receiving to be viewed by someone along way. If credit card / sensitive info, this is a problem.Internet like a room full of people having conversation. Anyone can walk up and listen to your conversation with someone else.With SSL, that conversation is happening in a language that only the 2 people talking can understand.
  • Secure connection begins with browser initiating a “handshake” procedure. Requests security credentials from server.Server responds with certificate which includes name of server, who owns it, company info (dep on type) and encryption key.Could I please see some funny cat videos (Bing Klingon translator)
  • Last questions or comments?Next slide at end for coupon code reminder
  • Ecommerce 101 - WordCamp Birmingham 2013

    1. 1. @ n a t h a n i n g r a m Nathan Ingram! @nathaningram Ecommerce 101
    2. 2. @ n a t h a n i n g r a m Who is this guy? Nathan Ingram Freelance Web Developer since 1995 Instructor, WebDesign.com NathanIngram.com
    3. 3. @ n a t h a n i n g r a m Coupon Code wpyall25! Good for 25% off anything you want to buy at ! iThemes, PluginBuddy, WebDesign.com
    4. 4. @ n a t h a n i n g r a m The Beginnings of Ecommerce When did online shopping begin? 1979 Michael Aldrich connected a modified home TV! to a transaction processing computer over! a telephone line in the UK.
    5. 5. @ n a t h a n i n g r a m
    6. 6. @ n a t h a n i n g r a m The Beginnings of Ecommerce Another big year for ecommerce… 1994 Jeff Bezos starts Amazon Netscape introduces SSL encryption Pizza Hut introduces online ordering
    7. 7. @ n a t h a n i n g r a m Amazon.com launched in 1994! but didn’t turn a profit until… 2003 Last year the average Amazon order was over $47 Source: InternetRetailer.com on 6/26/2012
    8. 8. @ n a t h a n i n g r a m Ecommerce Today Ecommerce sales worldwide topped $225B in 2012 Source: InternetRetailer.com
    9. 9. @ n a t h a n i n g r a m In the first quarter of 2013 $5,277 was transacted per second by Source: PayPal.com
    10. 10. @ n a t h a n i n g r a m The average consumer spends $1200-$1300 shopping online every year. Source: Forrester Research, Mashable Infographic 9/4/2012
    11. 11. @ n a t h a n i n g r a m By 2016 15% more people will be shopping online (192 million in the U.S. alone) Source: Forrester Research, Mashable Infographic 9/4/2012
    12. 12. @ n a t h a n i n g r a m know this stuff! If you are even moderately serious! about designing web sites, you need to
    13. 13. @ n a t h a n i n g r a m Ecommerce 101 The Standard Ecommerce Process Ecommerce with Third Party Processor Understanding SSL
    14. 14. @ n a t h a n i n g r a m The Standard Ecommerce Process Shopping Cart Payment Gateway Merchant Account Bank Account
    15. 15. @ n a t h a n i n g r a m Shopping Cart The shopping cart’s job… o  manage the shopping process o  communicate with the payment gateway o  keep the user happy
    16. 16. @ n a t h a n i n g r a m Shopping Cart Some Shopping Cart Options for WordPress: o  Shopp o  Cart66 o  WooCommerce o  Gravity Forms o  Easy Digital Downloads o  iThemes Exchange
    17. 17. @ n a t h a n i n g r a m
    18. 18. @ n a t h a n i n g r a m Get the Chart ! nathaningram.com/ecommerce
    19. 19. @ n a t h a n i n g r a m Payment Gateway Similar to Point of Sale in a retail store. Authorizes payments for the merchant and keeps a log of authorized transactions. Example: Authorize.net
    20. 20. @ n a t h a n i n g r a m Payment Gateway Payment Gateway Fees: o  A transaction fee (10¢*) o  A batch fee (25¢*) o  A monthly minimum fee ($20*) * Current Authorize.net Fees
    21. 21. @ n a t h a n i n g r a m Merchant Account A bank account that receives payments from a card issuer Usually a separate company than the Gateway Works like a collection agent
    22. 22. @ n a t h a n i n g r a m What Merchant Accounts Do Acquiring Bank (Merchant Account) Issuing Bank! (of the Credit Card) Hey, one of your customers made a purchase for $100. OK, here’s the money Sweet, thanks.
    23. 23. @ n a t h a n i n g r a m Merchant Account The Acquiring Bank (merchant account) assumes the risk for a transaction. o  Fraud o  Chargebacks Why would they take this risk?
    24. 24. @ n a t h a n i n g r a m Merchant Account Oh Good, More Fees… o  Discount Rate (2-6%) o  Monthly Minimum Fee o  Customer Service Fee o  Annual Fee o  Chargeback Fee ! Types and amounts vary widely between banks.
    25. 25. @ n a t h a n i n g r a m Merchant Account Application process can be detailed and time consuming. Secure merchant account approval before constructing the ecommerce platform.
    26. 26. @ n a t h a n i n g r a m The Standard Ecommerce Process Shopping Cart Payment Gateway Merchant Account Bank Account
    27. 27. @ n a t h a n i n g r a m Ecommerce with a Third Party Processor Shopping Cart Third Party Processor Bank Account
    28. 28. @ n a t h a n i n g r a m Ecommerce with a Third Party Processor Shopping Cart Third Party Processor Bank Account @ n a t h a n i n g r a m
    29. 29. @ n a t h a n i n g r a m Standard vs. Third Party Processors Standard Lower transaction fees Looks more professional Simple recurring billing Quick automatic deposits Requires SSL on site Rigorous PCI Compliance Complicated setup process Third Party Higher transaction fees Can appear amateurish More complicated recurring billing Automatic deposits n/a or weekly No SSL required No (or simple) PCI compliance Easy setup process
    30. 30. @ n a t h a n i n g r a m The Many Flavors of Standard Accepts all major credit cards! and echecks No monthly fee Advanced + Customers! pay without! leaving your site $5 monthly fee Pro + Virtual terminal! for phone transactions $30 monthly fee Payflow Pro Integrates PayPal! with your current merchant account $25 monthly fee! 10¢ per transaction
    31. 31. @ n a t h a n i n g r a m What to Consider! when Choosing a Payment System 1.  How much volume will you process? 2.  Do you need to do recurring billing? 3.  Where are you based? 4.  Does the company have a good reputation? 5.  What level of support will you receive? 6.  Does the gateway integrate well? 7.  Are there any hidden fees?
    32. 32. @ n a t h a n i n g r a m
    33. 33. @ n a t h a n i n g r a m Get the Chart ! nathaningram.com/ecommerce
    34. 34. @ n a t h a n i n g r a m What About Security? Rule of Thumb: A web page that collects sensitive information from the user should be secured with SSL.
    35. 35. @ n a t h a n i n g r a m What About Security? What is SSL? SSL is a protocol that allows a program on your computer to establish a secure connection to a remote server.
    36. 36. @ n a t h a n i n g r a m How SSL Works Web Server Web Browser Hey, I need a secure connection. Sure, no problem, here’s my security certificate. Sweet, thanks VIghro' boneH vide'os vIneH
    37. 37. @ n a t h a n i n g r a m Types of Certificates Shared SSL Offered free by many! hosting companies. Shared by all sites! on a server. URL is not your domain,! can cause trust issues! with users. Domain Validated Certifies you own your domain name. Usually issued within! an hour or two. Cheap $20+ a year Extended Validation Certifies you own your business and domain. Can take a few days to! a few weeks to issue Green bar in browsers $149+ a year
    38. 38. @ n a t h a n i n g r a m Sources for Certificates Y O U R W E B H O S T
    39. 39. @ n a t h a n i n g r a m SSL and WordPress WordPress HTTPS (SSL) Plugin by Mike Ems Available free from the WordPress Plugin Repository
    40. 40. @ n a t h a n i n g r a m Nathan Ingram! @nathaningram Ecommerce 101
    41. 41. @ n a t h a n i n g r a m Coupon Code wpyall25! Good for 25% off anything you want to buy at ! iThemes, PluginBuddy, WebDesign.com

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