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Introduction To Ecommerce
by: David Risley
Many people new to websites and/or ecommerce are confused at the in and outs of ecommerce. Even many people who are fairly adept at scripting can set up a store using some popular package such as OSCommerce and then are left stumped by the idea of making it work with a payment gateway to actually collect money and put it into their account. In this article, I will give a brief overview of how the system is set up to collect your money. I will then discuss briefly what to look for in evaluating payment gateways. As usual, I will keep this basic and understandable just as I do with all of my articles.

The Basics - How Funds are Collected

Ecommerce simply refers to the practice of shopping online. From the site owner's perspective, it entails collecting funds from sales transactions on their website and depositing that money into the bank. In order to collect funds, you need to have a merchant account and a payment gateway (discussed below). Basically, when a person enters their credit card number on a website, the card number and buyer information is sent to a payment gateway. This is done securely. The payment gateway will interface with a payment processor to check availability of funds as well as any other criteria set for accepting transactions. If the funds are available, the payment processor will then deduct the funds. The payment gateway will then report back a successful transaction to the merchant, at which point the merchant's shopping cart system will respond by displaying a "Thank You" type message to the buyer. Funds will sit until the transaction is settled, which means the funds are collected and deposited to your bank account. Until a transaction is settled, the transaction will not post to your bank account and the corresponding debit will not post to the buyer's credit card account.

Merchant Accounts

A Merchant Account is a special type of account specifically for online retailers. They are designed to allow non-POS (point of sale) transactions using credit cards, or transactions where you don't have the person's credit card in hand. In other words, you don't have a card swiper. A merchant account is not the same as a bank account. It acts as a go-between between your payment gateway and your bank account, accepting funds from credit cards which are then deposited into your bank.

A merchant account is a relationship based on trust between you and the issuing bank. The bank takes funds from the buyer's account and deposits into your account. A payment processor takes care of checking for availability of funds and debiting from the credit card account. The bank issuing the merchant account is trusting that you will fulfill your end of the transaction by providing the product or service that the buyer purchased. In case where this does not occur, the buyer can dispute the transaction. This puts the issuing bank on the line because they are then obligated to return the funds to the buyer's card (a chargeback). Therefore, merchant providers are taking a risk in allowing a merchant to take credit cards under their name.

The organization providing your merchant account will do underwriting on the account when you apply to check your credit. If you have a history of too many chargebacks, you may be denied. In fact, too many chargebacks can result in you, as a merchant, being put on the Terminated Merchant File (also called The Match File). This is a blacklist which will effectively prevent you from ever receiving a merchant account again.

Payment Gateways

A payment gateway serves as the front end to your merchant account, allowing you to manage funds, transactions, and the like. It also serves as a connection between your website and your merchant account. It takes data submitted via your secure order forms and presents it to your processing bank. The processing bank then approves or declines the transaction and sends its response back to the payment gateway. The payment gateway then turns around and provides this data back to the merchant for appropriate handling of the transaction. A payment gateway, then, does not offer services such as merchant accounts or shopping carts, although some of the larger-known gateways do provide such options as value-added services.

Some of the better known payment gateway services are Authorize.Net, Verisign, 2CheckOut.com, Linkpoint, Paysystems.com, Worldpay.com, and MerchantCommerce. Some of the things to look for in a payment gateway are compliance with CISP, SDP and DISC (security initiatives put out by the major credit card companies), virtual terminal (to be able to accept transactions over the phone by typing in their data rather than only relying on your website), fraud prevention, recurring billing, methods of integration, cost and whether they can accept e-checks or not.

Fraud prevention is a big one because, as stated above, too many fraudulent transactions will result in chargebacks which could end up putting you on the Match List and your merchant account closed. Some of the common fraud detection mechanisms are Address Verification (AVS) which compares the customer's address with that on file with the issuing bank, CVV2 which makes use of the 3-digit security code on the credit card (4-digit on American Express cards).

Most gateways will provide instructions on how to interface with their servers from your web store. Most gateways offer two methods of integration.

One method is to have your site POST a form to the gateway's server which is pre-populated with your customer's information. At that point, the customer will provide the customer with the payment form which allows them to type in their credit card number in a secure environment. After processing occurs, the customer is then routed back to your website along with the results of the transaction. Your site again takes over the process. This method is usually easier to set up for site owners and it also means the site owner does not need to purchase their own SSL certificate (allowing secure transactions on the site itself). The tradeoff is that you do need to send your customers off of your website for payment collection. Many gateways offer ways to make the payment form look like your website using customized headers and footers, but the fact remains that the visitors are leaving your website.

The second method is totally invisible to the customer. If the site owner has an SSL certificate, they can set up security on their own site. This means they can host the payment form themselves, totally customizing it to their website. When the customer submits payment, your site will securely and invisibly submit the information to the payment gateway. The payment gateway will do the usual processing and then invisibly send the response back to the merchant's website, allowing it to respond properly. From the customer's perspective, they never left your website. And they never did. This type of setup requires an SSL certificate as well as access to the CURL library.

Many gateway providers can get you set up with a merchant account at the same time as the gateway. So, in most cases, you do not need to sign up for them separately.

Conclusion

Hopefully this has given you a brief introduction to how credit card payments are processed on the internet.

About the author:
David Risley is a web developer and founder of PC Media, Inc. (http://www.pcmedianet.com). Specializes in PHP/MySQL development, consulting and internet business management. He is also the founder of PC Mechanic (http://www.pcmech.com), a large website delivering do-it-yourself computer information to thousands of users every day.


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Steps to a Writing an Effective Press Releases
 by: Diana Ennen

Want to get the most media attention and spotlight for your business? Then the first place to start is with a GREAT press release. Now I can almost see half of you leaving now, dreading the thought of having to write one of these. But wait!! I’m going to show you easy methods to make your press release work for you and get the attention it deserves. Ready? Let’s go.

We’ll briefly go over the basics because of their importance. Editors want to see things done the RIGHT way. I would bet that a lot of good releases simply get tossed out just because they aren’t set up properly. To a busy editor, that all too familiar “10 second glance” says a lot for you and your business; it let’s them know if you’ve done your research enough to warrant that release to be placed in their newspaper or magazine.

Here are your essentials:

"FOR IMMEDIATE RELEASE" on the top left of the page.

Your contact name, phone number, e-mail address, and website follows.

Headline is next, normally in bold and centered on the page. Summarize what the release is about and capture their attention. Spend almost as much time on your headline as you do writing the release. It’s that important.

The press release body starts with the location of the release and the date (Margate, Florida, May 5, 2005.)

Most press releases are between 200-500 words, and no more than a page. The first paragraph has the most important information. Don’t save the best for last, it won’t get read. In this paragraph answer the questions, who, what, when, where and why?

It is recommended that you write press releases in the 3rd person and use short sentences and paragraphs. Do not go over board, trying to dazzle the editor, it won’t work.

Target your release. You will be sending your release to a specific audience so make sure that in your release you keep to what would appeal to that audience. What don’t they know that you can add? Nothing works better than getting an “AAH HAA” when an editor is reviewing your release.

Provide statistics. Do some research and find some relevant information that applies. You can easily do this through Google. Once you find your quote, do a Google search or Yahoo quote on that particular topic. However, don’t stop on the first Google link and take that for gospel. Research it a bit further. Have it come from a respectable company or magazine.

Include relevant quotes from experts in your field that will reinforce what you are saying. Approach authors, leaders in your Industry, and other experts that back up the facts you are stating in your release. They will normally appreciate the added publicity and you get the quote you’re looking for. For example, as an author I’ll often get asked to provide a quote for an article on home-based businesses or the virtual assistant industry. I welcome the opportunity as it provides me more publicity.

Also, if you have a satisfied client that you feel will add credibility to your Release, add a quote from them as well. The first time you mention the expert, write out their full name. Then list them by last name or Mr. and Mrs. Smith only. I normally prefer the last name.

The last paragraph should be your call to action. You’ve talked the whole release about your business or product, now tell them what to do with the knowledge they just acquired.

At the bottom of the release include ### to indicate you are done, followed by a short bio. Make sure if you include your website that you include http:// in front of it for search engine recognition.

Your bio should include your information, any books authored, etc. Double check this for accuracy. At this point, you’re tired and done with the Release. But if it goes out to the world with the wrong web address, the valuable time spent even writing the Release has been wasted.

That’s it; the basics for writing a press release! Now one other thing I’d like to add in, they work! They truly work. I’ve had a recent release get accepted by PRWeb (and yes they do reject bad ones!), and then go on to hit several other major newspapers and media outlines and the Google alert, which resulted in our paper in the area contacting me. You want to set up a Google news alert for your name so that you can follow the path and see when you make the news so you can follow up. Also, PRWeb at http://www.prweb.com has complete guidelines for setting up a good press release. Go with the extra money and spend $20.00. It’s worth it to get the additional exposure.

About The Author
 

Diana Ennen is the author of numerous books including Virtual Assistant: the Series, Become a Highly Successful, Sought After VA, Words From Home, Start, Run and Profit from a Home-Based Word Processing Business & the Home Office Recovery Plan. She specializes in publicity and book marketing and is president of Virtual Word Publishing http://www.virtualwordpublishing.com and http://www.Publicity-VA.com. Articles are free to be reprinted as long as the author’s bio remains intact

 

 



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