3. 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.
4.
5. Another big year for ecommerce…
1994
Jeff Bezos starts Amazon
Netscape introduces SSL encryption
Pizza Hut introduces online ordering
6. Almost 20 Years Later…
Ecommerce sales worldwide topped
$200B
in 2012
Source: InternetRetailer.com
7. In the third quarter of 2012
$4,423
was transacted per second by
Source: PayPal.com
8. The average consumer spends
$1200-$1300
shopping online every year.
Source: Forrester Research, Mashable Infographic 9/4/2012
9. By 2016
15% more people
will be shopping online
(192 million in the U.S. alone)
Source: Forrester Research, Mashable Infographic 9/4/2012
10. know this stuff!
If you are even moderately serious
about web design, you need to
16. Similar to Point of Sale in a
retail store.
Authorizes payments for the
merchant and keeps a log of
authorized transactions.
Example: Authorize.net
17. Payment Gateway Fees:
o A transaction fee (10¢*)
o A batch fee (25¢*)
o A monthly minimum fee ($20*)
* Current Authorize.net Fees
18. A bank account that
receives payments from a
card issuer
Usually a separate
company than the Gateway
Like a collection agent
20. The Acquiring Bank (your
merchant account) assumes
the risk for a transaction.
o Fraud
o Chargebacks
Why take this risk?
21. 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.
22. The application process is
detailed and time
consuming.
Secure merchant account
approval before constructing the
ecommerce platform.
26. Lower transaction fees
Looks more professional
Simple recurring billing
Quick automatic deposits
Requires SSL on site
Rigorous PCI Compliance
Complicated setup process
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
27. Accepts all major
credit cards
and echecks
No monthly fee
+ Customers
pay without
leaving your site
$5 monthly fee
+ Virtual terminal
for phone
transactions
$30 monthly fee
Integrates PayPal
with your current
merchant account
$25 monthly fee
10¢ per transaction
28. 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?
30. A web page that collects sensitive
information from the user should
be secured with SSL.
31. What is SSL?
SSL is a protocol that allows a
program on your computer to
establish a secure connection
to a remote server.
32. Web ServerWeb Browser
Hey, I need a secure
connection.
Sure, no problem, here’s
my security certificate.
Sweet, thanks
VIghro' boneH vide'os vIneH
33. Offered free by many
hosting companies.
Shared by all sites
on a server.
URL is not your domain,
can cause trust issues
with users.
Certifies you own your
domain name.
Usually issued within
an hour or two.
Cheap
$20+ a year
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
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)
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)
