created famous author EBiz Sydney Johnson Genius famous auction prices (http://AuctionGenius.com), for people who want to help create your own e-business. It shares some important advice for those who want to learn online retailers:

1-Start from the bottom Tip.

Many students want to dive head of Johnson ready to invest all their savings in foreign imports or redemption of the network. But Johnson avoid such measures risk for two reasons.

• All costs are reviewed for minimum bulk purchase discounts or for the huge cost of shipping imports.

• You have little experience, and therefore can not know everything that these operations are linked.
Mr. Johnson, you will make mistakes … Like all the terrible errors are minimized very low. “Do not invest a lot to start to learn with cheap goods. Start with minimal investment and begin receiving money in your business, rather than buying new golf clubs or tennis.

2 Market Board and test results.

As you go, you will learn what products are selling well and in fact, you’ve arrived. Johnson funnel “theory” to find your niche products: “It starts very large groups A …. large, then learn to conduct a market study, and the sequence down and still have small small … over at the other end of the funnel of some products, you can very well with him.

3-Start “on eBay Council

EBay is an excellent tool for beginners to learn the online distribution. There are several reasons why it is a good start:

• It is fast, easy and cheap.

• Media-based, and people see the ads as they look because they are looking for your type of product.

• It is a good way to learn the advantages and disadvantages of the company.

Tip 4: “There is no such thing as a message” Rich “Quick!

Top E-Commerce, how to start a business, it takes patience and perseverance. Do not expect magic of large sums of money overnight. And not just any opportunity that comes from fear of being lost directly. Search, especially if it seems too good to be True … Well, you know … If we want to understand the time, what do you do there are not many places in the area of e-commerce, so you can earn money.

E-commerce offers cost and time savings for individuals. As more and more busy soon go online to find products go from store to store. Often, the product is cheaper online, even after paying for shipping.

provided that participation in e-commerce, in the first instance, a good Web Hosting E-Commerce. If you are the webmaster of the complex with the independent group, look at the charge of providing all-in-one supplier, a control panel offers a wide range of models. Although the rule may change the templates, you must start with a breeding. Good wizard guides you through the steps of the construction and operation of the site is also useful. Ease of use is important so you can get your website quickly and professionally, and make simple modifications to a later date.

Your hosting service to their customers voice and an easy way to shop. Even if you sell a product that will only make it as easy as possible for customers to buy. Make sure the ability to import and export data. If you already have a database, and select a vendor who can import it, we must write. Export potential to save you time and trouble if you choose a new supplier.

The choice of e-commerce solution for your business, look for hosts that offer a variety of marketing options, payment options for customers, and automatic transmission. If a client can not pay as you wish, we will not buy. If the party does not happen very fast, can not be a repeat customer.

Look also for e-commerce solution that allows you to analyze traffic. To grow your business, you need to know to produce the kind of marketing and circulation sales. You also need to see things as costs and customer service. Choosing the right hosted solution can take some time, but do it right the first time is very important. Finding time to be a quality supplier that will help you choose the growth of your business.

With traffic comes a potential customer which basically means sales which in turn means profit. While many sites have collapsed in the past with the downturn of many internet based business, many smaller sites have generated good money by concentrating on a certain niche and some subniches.

This is a reason why e-commerce site laser target certain groups of people and drive them to their site to showcase their sites and products. Precision marketing is essential so that you could count on all the traffic on your site as potential customers.

Using Money to Make Money

It’s a common business notion that if you want to make money, you have to spend money. One good way of spending money for business gain is through advertising. Advertising brings in the people because through advertising, they know that there is such a company or product in existence. With the right type of advertising, you can see the spurt of traffic growth to your site. With a high volume of traffic, even if only a small portion or percentage turns out to be buying customers it is still a good average of profit generating income.

Right now, there is no other advertising scheme that would be worth every cent than using Google’s Adwords. The surge in popularity of Google’s Adwords is very evident as you can see so many sites sporting this ad scheme.

In using Google’s Adwords, you pay a certain fee depending on the number of keywords your ad is keyword sensitive to. Each time a person does a search in Google, the keyword or keywords use generate ads in the side of Google which are generated by the keywords they have assigned for their ads.

This method laser targets the traffic a site wants for their site. This also ensures that you are readily visible in the first page of a search result. Paying Google for this ad scheme ensures that your target group of people sees your ads. You drive your laser targeted traffic to your site which provides for their needs and wants. You can also be sure that you can meet their demands and needs.

Aside from Google, you can also be featured in their other search networks, these includes sites like, AskJeeves, AOL Search and Netscape. These sites also show Adwords ads that react to searches done by visitors. There are also content networks, non-search engine sites that feature Google Adwords, which will also carry your ads. But this is subjected to the niche the site features. Your chosen keywords will determine which content network shall feature your ad. The frequency of your ad shall also be determined by your allowed budget.

Laser Targeting your Traffic

To get a good number or estimate of the traffic to buying customer ratio it is good to laser target your traffic. Knowing that your traffic are all potential customers and are interested in your products and company provides you with a more accurate statistics. This will show you how effective your utilizing of Google Adwords is.

Drive laser targeted traffic to your site by using keywords or keyword phrases for your Goggle Adwords that pertains to your company and to your products. There are many online internet tools that can help you in choosing keywords and keyword phrases that are currently in demand that could help drive laser targeted traffic to your site.

With your Google Adwords ad, you are ensured that every click to your ad is a potential customer that is precisely looking pr interested in what you have to offer. Make sure that your Google Adwords ad has the right keywords so that you can drive you’re laser targeted traffic to your site.

Using Google Adwords to help boost the drive to increase laser targeted traffic will prove to be very beneficial as many other companies can attest to. The benefits are high with the cost relatively justifiable.

Before you get started, consider these seven steps involved in starting a drop-ship e-business:

Step 1: Decide to sell your products with or without your own website

You can start your drop-shipping e-business either with or without having your own website. If you decide to sell with your own domain name, then you need to get your ecommerce site up. If you do not want the hassle of getting your own ecommerce site, then you could build your online store at eBay. eBay e-store site builder allow you to build your online store easily.

Step 2: Decide products to sell

Then, you need to decide what types of products to sell at your online store. You could identify a group of products such as electronic products, household electrical appliances, cell phones & etc. It is advisable to identify similar products or products under the same category to sell instead of totally different category products such as shoes and CD player. Because, by selecting products within the same category, you can give your customers more choice to choose from, and you can group two or more products in a bundle for promotion or marketing activities and you get more sales on each transaction.

Step 3: Locate suppliers who will drop-ship for you

After identify your products to sell, you need to look for your drop-shipping suppliers. On time delivery is important to ensure the satisfaction of your customers; hence, be sure you check for the drop-shipper performance record before you sign-up an account with them. Discussion forum, message board and blogs are sources for you to find some hints or comment for the drop-shippers. Or you just simply key-in the drop-shipper name on the Google or Yahoo search box; you should get some information of your selected drop-shipper.

Step 4: Set up an account with the drop-shipper

Once you select a drop-shipping company, you need to set up a reseller account with the company. This can often be done online or by phone, but some companies will require that you complete and return a reseller application to open an account. Some may also require a tax ID and a business license. Most drop-shipping company will charge some fee to open their reseller account.

Step 5: Advertise the product for sale online

Many online retailers failed in their drop-shipping e-business because they could drive traffic or visitor to their website and convert these visitors to the actual paying customers. To get traffic to your product page (either your website or your eBay e-store), you need to advertise your products so that your products get exposure on internet and attract targeted traffic to your product page.

There are many ways to advertise your products. You could advertise on eBay, use pay-per-click (PPC) advertisement service such as Google Adword or Yahoo PPC. Or you could go for the cheapest but equally efficient way in driving traffic to your e-store: Article Marketing. You could write a review on your products in an article and put your e-store URL at the end of article or at the author resource box and submit them many article directories for maximum exposure. Many internet visitors will drop-by to your e-store via your URL link at the end of your article if they are interested to know more.

Step 6: The Product Sold & Place Order To Drop-Shipper

Once your have product sold, your customer will pay you on your selling price via your online payment system such as PayPal. And you place the order with your drop-shipper and pay them via their payment system at the agreed price, which is lower than your selling price, so that you could earn the profit.

Step 7: After Sale Follow Up

Many e-business entrepreneurs will miss out after sale follow up portion. Just because your customer has paid you and you have placed the order with the drop-shipper, it does not mean that this is end of the loop. Because if there are problem occur, you are the one who need to responsible in the eyes of your customers. Hence, you should follow up with your drop-shipper either via phone or email to ensure that ship out your order to your customer.

You should proactively follow up with your customer to ensure they have received their order and satisfy with it. Offer yourself as the personal contact for any issues that may arise. This is also a great way to sell customers more products because if your customers are satisfied with your service, they may give you repeat orders.

In Summary

By integrate drop-shipper into your e-business, you can forget about inventory handling issues and find a shipping partner to fulfill orders for you; all will be done by your drop-shipping partners. By following correct steps to set up your drop-shipping e-business, you can save your time and efforts in getting your business started faster.

The top reason many Internet business men and women join forums is for the search engine benefits. Many forums are tremendously popular with search engines and so not only rank well but also are regularly crawled. Most forums offer an introductions area as well as a signature area where you can promote your web site or sites. In addition, as you participate in a forum that is relevant to your site’s topic there will likely be opportunities to work your site into conversation. All these links can be of tremendous benefit in terms of search engine rankings and relevant back links.

However, if you think that search engine benefits are the beginning and end of the ways you and your Internet business can profit from joining a forum then you are missing out on a lot of learning.

If you are going to join a forum then join a forum that help you learn more about your niche. Even if you are an expert in your field there is always more to be learned and where else to go for that knowledge than a place where others knowledgeable in your area also hang out? That is what is so wonderfully flexible about forums. There really is an Internet community for everyone and every interest. Your task is to find the forum where your peers are already hanging out. Learning more about your niche is a tremendous benefit of joining a forum.

You don’t need to restrict your forum memberships to those within your field. It is also wise to join forums that can help you learn more about how to run your business. Find forums of other small business owners and entrepreneurs. You will soon be able to find folks who are at your level of expertise as well as those with more experience willing to share their hard-earned lessons. Soon you’ll have the opportunity to repay that debt by mentoring other newbies. This sharing and hand-holding is one of the elements that make Internet communities so successful.

You should also seek a forum to help you with your Internet marketing. There are many different approaches to Internet marketing and while some people prefer the scatter-gun approach most choose one or two primary methods. Explore and text methods to determine which you feel most comfortable with and then join a forum focused on that method to help you refine your approach and achieve maximum success.

One of the primary problems with the Internet is that it can be easy to feel isolated. However forums can help bridge the gap of time and distance by serving as a community as well as an information source. Friendships and even love can be found in time and laughter and camaraderie and commiseration can help sustain the person as well as the business.

Forums can also help you find customers for your business. As you participate and share information about your business some folks will naturally express an interest. As you share your expertise and demonstrate your knowledge then you will attract still more. Don’t be a pushy salesperson, simply allow your expertise to showcase your business and you will attract a quality customer relationship.

A forum can also be a great place to find partners to help you expand or promote your business in a number of ways. You might discover some like-minded soul whose business perfectly complements yours or you might discover the perfect joint-venture partner. Even if you encounter people you might view as competition try to view the relationship from many angles to see if there is a way to benefit from a partnership rather than a competition.

Joining forums can provide many benefits to you and to your business but remember that Internet communities are social contracts with rules and guidelines. Make sure you know and understand the rules before leaping into discussions. It is even more difficult to undo a bad first impression on the Internet as it cannot always be erased. Start slow and easy until you are sure of your footing. Also, be very wary about pushing your business too aggressively. That type of activity can get you banned from a forum pretty quickly. Many forums have a clearly marked area for advertising and sales posts and also allow some blatant promotion in your signature, but keep your posts on topic and helpful and you’ll be better off in the long run.

Why do you need a shopping cart? A lot of people would try to break in to the world of e-commerce, hoping to expand their market, increase their profit, and develop a worldwide brand. However, they lack the necessary tools, especially a shopping cart.

Though it can cost you something, the returns that you will reap are more than what you’ve invested. To give you an idea of how it contributes greatly to business success, here are the 6 huge benefits from a shopping cart:

1. There are hundreds of templates that you can choose from. It does not really matter if you do not have any background on HTML. A lot of shopping cart software already has hundreds of templates included in the package, and all you need to do is to choose. Nevertheless, for a little bit of customisation, you can always opt to modify the codes using an HTML editor, which is still found in the shopping cart program.

2. It offers excellent security of data. It is highly essential that financial transactions, particularly payment of customers, are well-protected. Otherwise, hackers can simply steal their confidential information like credit card numbers.  Shopping cart software makes use of security technologies that makes it reliable to process payments 24 hours a day, 7 days a week.

3. You can conveniently process credit cards. Credit cards provide a win-win situation for both customers and businesspersons. For the former, they can purchase items anytime they want to. For the latter, meanwhile, payments are instantly credited into their account. A shopping cart application can speed up the process. All you need to do is to identify the different kinds of credit cards you want to carry on your online shop and allow it to make the payment process.

4. You are guaranteed of a 24/7 customer support. With shopping cart software, you’re backed by hundreds of customer service representatives who are more than willing to answer your questions and entertain your complaints. You can just give them a call—no matter where you are in the world.

5. You can easily keep track of your shipped goods. One of the reasons why customers complain is because the goods have not yet arrived at the expected date. With the help of the shopping cart software, though, you can monitor every shipment. You can also calculate the estimated shopping charges, which could be shouldered by the buyer or you.

6. Generating reports is as easy as 1-2-3. You can conveniently monitor your sales and costs depending on your chosen interval—whether daily, monthly, quarterly, or even yearly. You can also determine how many visitors you get on your online shop so you can evaluate if your online marketing strategies are working.

With your shopping cart software, you can manage your business with more comfort and sense of expertise. So who says you need to count on the initial investment? What’s really important is what you’re going to get in the next years to come.

Microsoft now offers a great service known as Bcentral, and is offering great deals on server and hosting packages that run on a monthly scale, or basis. This is a great tool for the individual that is looking to delve into the e-commerce field. If you have an idea for a catalog, and need tools to get it up and running such as templates, and logo creators this could be your solution you’ve been waiting for. Not only will you receive the templates and the graphic creators, but also you will receive the quaint shopping cart in the top right hand side of the page. Having the opportunity to track and control orders and sales is made very easy as you will receive automated conformation through your e-mail. Being able to become a member in the PayPal system is also a good idea, as you can never have enough payment options attached to your site. This just increases your chances of sales. You will also be given the opportunity to keep track of customer traffic to your site as well. This makes for a very handy service indeed.

Another great service is provided by Ebay, the stores offer a very popular alternative and have a sliding fee scale to fit most businesses needs and budget. The basic service is for the smaller of the businesses that have a smaller volume of traffic. This does not mean that you will not have access to some great tools for your site,but you will not be able to keep track of the flow of traffic or sales with this service and there is a very limited directory, yet it is still a good service for someone who is just starting out. The next level of the ebay service will provide more for the business that may be needed as time goes on. It places your priorities in relation to the product you are trying to sell; knowing exactly what the consumer is looking for makes it easy for them to adjust your targeted areas. You will get some traffic reports and sales figures, but not many. The third and final level of the ebay store program is exactly where you want your business to be placed. This is the premier spot or the center stage. This is the place where the bulk of the strongest traffic will be located. This will give you a much stronger shot at making those sales.

What It Is

E-commerce, clearly termed as web commerce, basically means selling of merchandise or services over the Internet with electronic transactions and also through a secure network. E-com is not merely buying and selling or providing services but it is also a method of advertising and marketing through an electronic system as well. E-com also means facilitating the progress of commercial transactions electronically. Right now e-com is a well-established technology in all major countries. In most cases internet marketing requires you to have your own E-commerce store for maximum return.

Requirements of an E-commerce Store

Building an online store is not an easy job. Software is required that can manage customers as well as their needs. E-commerce software should be able to handle inventory, shipping and handling costs, taxes, dispatching and payment processing of client’s orders. You may encounter many options when setting out to build an e- commerce store. Before choosing any of them it is important to have a clear view of your requirements. Technical requirements might include coupons, tracking systems, customer login options or any number of other things. Other requirements include what type of impression you want to provide to your valuable clients.

Study the Sales and Marketing Cycle to Determine Your Needs

Before you opt for any of solutions for building e commerce store, study the basic model of e commerce that represents the entire sales and marketing cycle. The first building block of this cycle is audience in which you define what type of customers you will target. Second are commodities, in which you characterize the types of products you will put on the market. Third is customer support where you will answer the questions and offer solutions to clients’ or potential clients’ problems. Next are advertising, marketing and endorsement where a business promotes the products or services. Then there is transaction processing, the most important technical phase of the cycle, which will handle orders, taxes, payment processing and order delivery. Transactions may be automatic or manual. In manual processing you have to enter credit card information manually through an offline terminal. In the case of automatic processing a client’s order form will be setup with a program that processes and charges the credit card for you. After that there are post-deal services regarding how you provide solutions and services after the sale. Last but not least is brand name with which you will create a distinctive business image to correspond with customers. Nobody is going to pay attention to your online store unless something catches their eye.

Research Your Options

Once you have defined your needs, you can then begin researching your options. There are two basic paths you may follow when building an e-commerce store – either buy ready made software or build a custom system with components and parts according to your requirements and budgets.

Flexibility

Some business firms offer gifts and well placed impulse products for better marketing approaches. This requires an e-com solution to be flexible enough to allow various give-aways, coupons and promotions. Also, if your product comes in a variety of models or styles, with different options and different prices then you must communicate these factors and portray them distinctively in your online store. A true businessperson will certainly follow the patterns of his or her usual clients as well as those who directly visit the site. Web statistic tracking tools can be a great help to this end.

Ease of Use

Some e commerce stores are very easy to use and require only a few minutes to learn while others are more complex with so many features that they can be overwhelming. Being able to see a demonstration of software before buying it is a great help to determining ease of use.

Scalability

Being able to grow with your company is very important. If you choose a very simple solution now, then require a more robust solution down the road, you will lose time converting your store. If the URL structure of your store is not consistent, you can also lose search engine rankings by changing e commerce solutions. Therefore, it is important to choose an e commerce solution that can grow with you. For example, some stores owners may not want coupons in the beginning but then down the road decide it is a good idea. Some stores may also have limits on number of products, inventory control and tracking that down the road will be very important.

Security

Of utmost importance to online stores is transaction security. The priority for any business firm should be secure transactions. Thanks to Netscape for introducing SSL (secure socket layer), data can be protected by online store owners. SSL is an encryption technology that encrypts a message and the receiver decrypts it by using RSA security. To enable SSL on your web server you need a digital ID (a form of identification that will recognize you). Many web hosts provide SSL installation for anywhere from a few bucks to a few hundred bucks per year.

Overall, you want flexibility, ease of use, security and scalability in your store. Research your options before you make a final choice, and whenever possible, get a free trial of your solution before you buy.

On the other end of the scale, many successful business owners and entrepreneurs who have created and implemented a business strategy generally work for less hours, and produce a more sizeable income and profit margins. You will also find, that in general, those who are successful with their own business, attribute their success to having a strategic plan.

Ok, we’ve discussed that having a good business strategy plan is essential, but what really is “strategic business management”? In its most basic form, its the process in which the goals and objectives for your business are defined, and an action plan is then created so you may reach your goals and objectives.

You now know what it is. So how do you go about creating a strategic plan for your business?

1) Any business owner should know, and be able to describe in detail, the vision for his or her business. Whats the image that you want your business to have?

2) Any operating business should have clear and concise company values and guiding principles. For instance, what are the reasons you are in business? Serve and protect? Provide quality soap? And how do you do business? Do you treat your customers like trash; or another form of royalty?

3) It would also be a good idea to create a 3 year and 5 year plan. Any business should implement a long-term plan in which the basis is on broad objectives that will assist you in getting your business from where it is today, to where you want your business to be.

4) Thinking not only long-term, but also short-term, will also greatly help your business develop. Each year, you should create, define, and plan specific objectives that when accomplished, will help you on the road to achieving your long-term goals. It is also worth noting, then when setting and planning your annual goals, is pays to be “SMART”. Make sure your planning incorporates the following points:

- Be very specific
- Show measure
- Make the goals realistic and attainable
- Make sure they are time-oriented

Include a list of obstacles and barriers which could holter your success from achieving your goals. In any case, getting to where you want your business to be, you’ll need resources. Create and define a list of resources you’ve already got, and the other resources which you will need to achieve your goals. At this point, you should also create a concise action plan that clearly defines how you will actually achieve the necessary goals. If your business has any employees, it is of great importance to involve them with this part of the business planning process.

5) In your business plan, you should create simple and concise milestones or benchmarks, that will define when you have actually reached a goal or objective. This is an essential part of the planning, as it will enable you to measure your progress as a business.

6) After you have created your strategic business plan, it is of paramount importance that it is shared with anyone who will be involved in the process. Your annual business plan is the roadmap which will lead your business and those involved, to the goals which need to be achieved — but to be effective, everyone must end up at the same goals and objectives, the “destination”, if you will. And to do so, everyone requires the same map.

7) Its no use having a well thought-out and planned strategic business plan, if you don’t put it into action. You now have a means to begin your business journey; its time to start it.

Be sure to regularly check and compare the progess of your business, to the benchmarks defined in your business plan.

If something should go wrong with your business, the sooner you figure out what went wrong, or what is -happening- wrong, the sooner you can fix the problem, make the necessary adjustments and get your business back on track.

9) And finally, ensure that each year you follow the exact same cycle to create your strategic business plan. Dream, Plan, Act, Check. Thats all there is to it.

As a final comment, I’ll leave you with this. Creating a business strategy and ensuring that you follow it, is not just about achieving specific goals and objectives. Its purpose is to also make sure that the journey taken to these goals, is a safe and enjoyable journey.

Having a safe trip is just as important as reaching your final destination.

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.