SESSION TWO
UNDERSTANDING THE ECOMMERCE PROCESS
When did online shopping begin?
1979
Michael Aldrich connected a modified home TV
to a transaction processing computer over...
Another big year for ecommerce…
1994
Jeff Bezos starts Amazon
Netscape introduces SSL encryption
Pizza Hut introduces onli...
Almost 20 Years Later…
Ecommerce sales worldwide topped
$200B
in 2012
Source: InternetRetailer.com
In the third quarter of 2012
$4,423
was transacted per second by
Source: PayPal.com
The average consumer spends
$1200-$1300
shopping online every year.
Source: Forrester Research, Mashable Infographic 9/4/2...
By 2016
15% more people
will be shopping online
(192 million in the U.S. alone)
Source: Forrester Research, Mashable Infog...
know this stuff!
If you are even moderately serious
about web design, you need to
The Standard Ecommerce Process
Ecommerce with Third Party Processor
Understanding SSL
Shopping
Cart
Payment
Gateway
Merchant
Account
Bank
Account
The shopping cart’s job…
o  manage the shopping
process
o  communicate with the
payment gateway
o  keep the user happy
Some Shopping Cart Options
for WordPress:
o  Shopp
o  Cart66
o  WooCommerce
o  Gravity Forms
o  Easy Digital Downloads
o  ...
Download the PDF
Below the Chat Window
Similar to Point of Sale in a
retail store.
Authorizes payments for the
merchant and keeps a log of
authorized transaction...
Payment Gateway Fees:
o  A transaction fee (10¢*)
o  A batch fee (25¢*)
o  A monthly minimum fee ($20*)
* Current Authoriz...
A bank account that
receives payments from a
card issuer
Usually a separate
company than the Gateway
Like a collection age...
Acquiring Bank
(Merchant Account)

Issuing Bank
(of the Credit Card)
Hey, one of your customers
made a purchase for $100.
...
The Acquiring Bank (your
merchant account) assumes
the risk for a transaction.
o  Fraud
o  Chargebacks
Why take this risk?
Oh Good, More Fees…
o  Discount Rate (2-6%)
o  Monthly Minimum Fee
o  Customer Service Fee
o  Annual Fee
o  Chargeback Fee...
The application process is
detailed and time
consuming.
Secure merchant account
approval before constructing the
ecommerce...
Shopping
Cart
Payment
Gateway
Merchant
Account
Bank
Account
Shopping
Cart
Bank
Account
Third Party
Processor
Shopping
Cart
Bank
Account
Third Party
Processor
Lower transaction fees
Looks more professional
Simple recurring billing
Quick automatic deposits
Requires SSL on site
Rigo...
Accepts all major
credit cards
and echecks
No monthly fee

+ Customers
pay without
leaving your site
$5 monthly fee

+ Vir...
1.  How much volume will you process?
2.  Do you need to do recurring billing?
3.  Where are you based?
4.  Does the compa...
Download the PDF
Below the Chat Window
A web page that collects sensitive
information from the user should
be secured with SSL.
What is SSL?
SSL is a protocol that allows a
program on your computer to
establish a secure connection
to a remote server.
Web ServerWeb Browser
Hey, I need a secure
connection.
Sure, no problem, here’s
my security certificate.
Sweet, thanks
VIgh...
Offered free by many
hosting companies.
Shared by all sites
on a server.
URL is not your domain,
can cause trust issues
wi...
Y O U R W E B H O S T
Plugin by Mike Ems
Available free in the
WordPress Plugin Repository
SESSION TWO
UNDERSTANDING THE ECOMMERCE PROCESS
Ecommerce Basics - WebDesign.com Ecommerce Summit 2013
Ecommerce Basics - WebDesign.com Ecommerce Summit 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)
  • 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)
  • Ecommerce Basics - WebDesign.com Ecommerce Summit 2013

    1. 1. SESSION TWO UNDERSTANDING THE ECOMMERCE PROCESS
    2. 2. 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.
    3. 3. Another big year for ecommerce… 1994 Jeff Bezos starts Amazon Netscape introduces SSL encryption Pizza Hut introduces online ordering
    4. 4. Almost 20 Years Later… Ecommerce sales worldwide topped $200B in 2012 Source: InternetRetailer.com
    5. 5. In the third quarter of 2012 $4,423 was transacted per second by Source: PayPal.com
    6. 6. The average consumer spends $1200-$1300 shopping online every year. Source: Forrester Research, Mashable Infographic 9/4/2012
    7. 7. By 2016 15% more people will be shopping online (192 million in the U.S. alone) Source: Forrester Research, Mashable Infographic 9/4/2012
    8. 8. know this stuff! If you are even moderately serious about web design, you need to
    9. 9. The Standard Ecommerce Process Ecommerce with Third Party Processor Understanding SSL
    10. 10. Shopping Cart Payment Gateway Merchant Account Bank Account
    11. 11. The shopping cart’s job… o  manage the shopping process o  communicate with the payment gateway o  keep the user happy
    12. 12. Some Shopping Cart Options for WordPress: o  Shopp o  Cart66 o  WooCommerce o  Gravity Forms o  Easy Digital Downloads o  iThemes Exchange
    13. 13. Download the PDF Below the Chat Window
    14. 14. Similar to Point of Sale in a retail store. Authorizes payments for the merchant and keeps a log of authorized transactions. Example: Authorize.net
    15. 15. Payment Gateway Fees: o  A transaction fee (10¢*) o  A batch fee (25¢*) o  A monthly minimum fee ($20*) * Current Authorize.net Fees
    16. 16. A bank account that receives payments from a card issuer Usually a separate company than the Gateway Like a collection agent
    17. 17. 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.
    18. 18. The Acquiring Bank (your merchant account) assumes the risk for a transaction. o  Fraud o  Chargebacks Why take this risk?
    19. 19. 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.
    20. 20. The application process is detailed and time consuming. Secure merchant account approval before constructing the ecommerce platform.
    21. 21. Shopping Cart Payment Gateway Merchant Account Bank Account
    22. 22. Shopping Cart Bank Account Third Party Processor
    23. 23. Shopping Cart Bank Account Third Party Processor
    24. 24. 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
    25. 25. 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
    26. 26. 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?
    27. 27. Download the PDF Below the Chat Window
    28. 28. A web page that collects sensitive information from the user should be secured with SSL.
    29. 29. What is SSL? SSL is a protocol that allows a program on your computer to establish a secure connection to a remote server.
    30. 30. Web ServerWeb Browser Hey, I need a secure connection. Sure, no problem, here’s my security certificate. Sweet, thanks VIghro' boneH vide'os vIneH
    31. 31. 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
    32. 32. Y O U R W E B H O S T
    33. 33. Plugin by Mike Ems Available free in the WordPress Plugin Repository
    34. 34. SESSION TWO UNDERSTANDING THE ECOMMERCE PROCESS

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