|
<%=Header%> |
E-Commerce - Method of Payment
There are a host of options when it comes to the method of payment and the choices you provide will likely depend on whether you are conducting B2C or B2B e-commerce. Some of these option include Purchase Order, COD, On Account, Debit Card, Credit Card, Internet Check Service, etc. The most common method of payment for B2C is credit card, while B2B e-commerce companies typically prefer Purchase Orders or On Account. In either case, your shopping cart application will provide some means of capturing the necessary information for you to begin shipping the product and receiving payment.
This brings us to the options you have in terms of processing transactions. In the case of B2B e-commerce where your customers typically have an account and are invoiced NET 30, it is merely a matter of confirming a customers account status prior to shipment. If you have chosen the globally preferred method of payment for B2C Internet transactions (Credit Cards), then you really have only two options:
1. Manual processing
2. Real-time processing
Manually processing transactions is just as it sounds and involves the following:
Authentication - ensures the credit card # is valid and has not been stolen
Authorization - confirms that the funds are available and allows you to reserve them for settlement.
Settlement – initiates release of funds and begins process of transfer to your account.
These steps are performed by manually entering the card information using a touch-tone telephone or the POS terminal provided with your merchant account. Authentication and authorization occurs in one process while settlement should be performed after products have been shipped. This is a little known fact about Internet transactions unless you have been involved in mail/telephone order business before; you may not initiate the transfer of funds until after product has been shipped.
Real-time processing eliminates virtually all human involvement. However, it is substantially more complex in terms of what happens behind the scenes (READ: costly). It involves the cooperation of several independent service providers including your bank, the customers' bank, credit card companies, and the large credit and debit "acquiring banks" that administer all of it. All of them tied to your e-commerce sites unimposing "Buy Now" button. Amazing, don't you think?
Although this sounds immensely difficult to set up, your web hosting provider, the major banks, shopping cart application developers, etc. have gone to great lengths to make this as easy as possible. There are also companies outside of banking institutions that provide this service as well. The only point of advice when considering these is "check the fees!" The best resource you may have for assistance in this area is your web-hosting provider; they will know all about compatibility issues and are most qualified to advise on the best course of action.
Regardless of how expensive any of the real-time options may seem, they can very quickly become not only viable, but also an absolute necessity. Consider the time required to process 120 transactions by hand at an average of 4 minutes (on a good day) per transaction; do the math…it equals 8 hours. If your worst problem is no time to process transactions, these fees will not likely be a problem.
|
|
|
