A virtual point of sale application (VPOS) is a replacement for traditional hardware-based POS terminals that you may be familiar with at restaurants, bars and other places where credit cards are accepted. The application is either installed on your PC, or is accessed through a secure web connection (much like an online order form). VPOS lets you authorize, settle, credit and delete transactions, and may perform other functions such as reporting.

VPOS is used by businesses that want to process payments that arrive by phone, fax or email, such as call centres and mail order businesses.

Wireless ___________

Useful When …You are processing payments in remote locations (e.g. pizza delivery, flea markets, etc.) Make Sure That … Your data transmission is secure. The wireless connection should be digital to protect data. ___________

Many wireless devices are emerging now to satisfy needs of mobile workers. Digital cell phones, Personal Digital Assistants (PDA’s, such as Palm Pilots) and specialized hardware can now be used as mobile payment devices. With a “WAP-enabled” cell phone or browser-based PDA, you can enter basic information required to process a transaction.

Wireless payment processing is useful in situations where traditional or PC-based point of sale devices cannot be used.

Swipe Card ___________

Useful When …The customer is present and when you need to give customer a signed receipt for their payment Make Sure That … Your merchant account is configured to take advantage of lower discount rate (i.e. credit card fee) ___________

Swipe card applications are ones where credit card can be “swiped” through a card reader, and customer can sign receipt. The swipe device can typically be connected to a PC, or specialized devices are available for use (such as traditional POS terminals).

The merchant account fees for swiped (“card present”) transactions are lower than “card not present” transactions.

2. Get a merchant account

A merchant account gives merchants right to accept credit cards for payment. A merchant account is required for each credit card you wish to accept. This step can be most time-consuming and frustrating for merchants, and it will also be component that most influences your costs of doing business online. Researching your merchant account options, understanding merchant account process, knowing how merchant account providers assess merchants, and “shopping around”, will pay off dramatically.

Merchant accounts have several fees associated with them, including a set-up fee ($200-$500), monthly statement fees ($5-$10), a monthly minimum fee ($20-$30) and a discount rate. The discount rate is a percentage of your sales revenue that banks levy, and it varies by how “risky” your business is perceived to be (many factors enter into this, such as your credit history, type of products you sell, your sales volume, average order size, etc.).

When enquiring about merchant accounts, start with your bank first. Then shop around. Fees vary significantly from institution to institution. In fact, they sometimes vary within an institution, depending upon merchant account representative you speak with. Depending upon your sales volume, shopping around can save you a lot of money over time.

If you wish, EasyPay123 has relationships with several merchant account providers, some of which have online applications that are available online on EasyPay123’s website. We’d also be happy to advise as you work through process of obtaining a merchant account.

For more information, see EasyPay123’s article entitled “Getting a Merchant Account” available by sending us a request through our online contact form at www.easypay123.com.

3. Select a payment gateway

The payment gateway is service that connects your payment interface to financial network. Gateways take payment information from application, ensure that data is valid, format it appropriately, and send it on to financial network for authorization, settlement, etc. Gateways typically also offer advanced features such as reporting and transaction management.

When you select a gateway, make sure that they can connect to your interface of choice (some gateways may also offer their own payment applications that you can take advantage of). Also make sure that they can connect to your merchant bank (so that funds can be deposited to your account). Finally, determine what other features you are looking for in a payment gateway, such as recurring payments, ability to process in multiple currencies, email notification of orders, fraud screening, etc. Shop around and ask lots of questions. Once you connect to a specific gateway, switching can be expensive and time consuming.

4. Payment-enable your application

Once your gateway has been selected, someone needs to connect it to your payment interface and customize it to meet your needs (if it is customizable). This is typically job of your developer. Make sure that developer has done this kind of work before, and will be around if you need changes in future. Be explicit about your requirements and document them so that they are unambiguous.

5. Test and Launch

Since it’s your money that is being processed, be meticulous about testing application. Use a real credit card (for each credit card type your are accepting) and process a small transaction (e.g. $1.00) to make sure that payment is authorized properly and that it settles to your bank account. Once you launch, problems are difficult to fix without affecting your customers.

Summary

Offering convenient payment options to your customers is a good way to secure their loyalty and reduce your operational costs. A variety of payment methods are available, and various interfaces can be used depending upon needs of your customers and your business. When evaluating payment processing options start with your customers’ needs and document all of features that you wish to have in your payment solution. Take time to shop around, and make sure that service providers that you choose are ones that you will be happy with in long run.

About EasyPay123

EasyPay123 is a leading supplier of payment processing solutions to businesses across North America. Offering world-class solutions at affordable prices, EasyPay123 helps merchants simplify process of acquiring, launching and using payment applications to improve way they do business. Visit us at www.EasyPay123.com.

For a description of some of e-commerce terms used in this article, please visit our online glossary at www.EasyPay123.com.

© 2003 EasyPay123 All Rights Reserved. This article may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit written permission from EasyPay123.

In some cases, payment gateway may actually display variable name that has been used for a specific data field in response page (e.g. if you use “CustName” as variable, this may be what is displayed to user in response page, email, etc.). Wherever possible, try to use “customer-friendly” variable names rather than cryptic ones to avoid confusion on part of user.

4. Fail Safe Development

Put fail-safes in place to compensate for internet connectivity failures that might result in customer not getting a payment response from gateway. This involves working through logic of how a customer processes a transaction and receives notification of transaction to identify possible points of failure (e.g. what would happen if Internet connectivity failure occurred immediately after a customer posted a transaction to payment gateway but before response page was returned? How does customer know what status of transaction is?).

Fail-safes can take many forms. EasyPay123, for example, has a Get Transaction Status feature that allows application to query Skipjack based on unique order number to determine (a) whether transaction is in system, and (b) if it, what its status is (e.g. approved, declined, settled, etc.). Once status is known, application can be programmed to determine correct course of action to take automatically.

5. Third Party Linkages

In some instances, there may be a requirement to pass transaction data to a third party application, either at time data is posted to payment gateway, or using results returned from payment gateway after transaction is processed. There are a number of ways to do this, either by having gateway post to a specific location, or by extracting and formatting data for import into third party application.

Talk to your payment gateway provider to determine best method of integrating to application.

Step 4: Test

Testing can be accomplished during development stage by using payment gateway’s development environment (if one is available) and a test credit card. This allows developer and user to ensure that application functions in manner that it should. Development testing only provides assurance of functional parts of application, however. To ensure that funds are approved and settled properly, testing should also be performed with application on “live” platform before making it available for general use. We recommend following:

1. Using a live credit card, authorize a transaction in amount of $1.00 2. Ensure that transaction is successfully approved, and that: (a) The response page is displayed and contains all of necessary information (b) The email receipt is received and contains all of necessary information (if an email receipt is being used) 3. After 24-48 hours (depending upon merchant bank), check merchant bank account to determine if funds from authorization were successfully deposited. 4. Verify that merchant name appearing on live credit card statement used in Step 1 appears as expected (this is defined during merchant account application process, and is typically a derivative of “doing business as” name on application).

Step 5: Communicate

Chances are that you built your payment application because it helped you streamline your operations, reduce your costs, increase your sales, improve customer service, or all of above. If your customers/users are not aware that it exists, your success at achieving your objectives may be reduced. You will need to get word out that your application exists. This could include advertising or leveraging search engines in case of online retail, or a link to your payment interface in your emails and invoices in case of bill payment applications. Many methods of communication exist, including advertising, affiliate programs, “viral marketing” efforts, search engine submissions, and others. The Internet is an excellent resource to research these various options. We also have an article, “Gaining Visibility for Your Website”, that highlights a few of these different methods. You should also use your offline marketing efforts and collateral material to make customers aware of your application.

Don’t ignore your employees when sending out communications. They should be aware of value and implications of new payment application, since it may affect how they do their job or interact with customers. Sending an internal bulletin to them describing application, its value, and how it may impact them, will go a long way toward avoiding confusion once application launches.

Design and Development Tips

* Data validation and required field coding will dramatically reduce end-user generated errors and dissatisfaction by end user. * Design and test for all browser types. * Test, test, test to ensure that all elements of system are functioning properly. Mapping out data flows and developing an exhaustive test protocol to follow will ensure that most issues will be identified and tested prior to launch.

Summary

A complete discussion of how to integrate a payment gateway to an application is beyond scope of this document. There are, however, basic steps that should be followed regardless of nature of integration. If you are a developer looking to integrate a payment gateway, your gateway provider should provide you with documentation, scripts, software modules and support to make your task easier. If not, then you may wish to look at alternate gateway providers. If you are a merchant that is engaging a developer to do this work for you, you may find value in using points in this article to ensure that your developer is following a comprehensive approach that will result in an error-free, customer-centric solution.

About EasyPay123

EasyPay123 is a leading supplier of payment processing solutions to businesses across North America. Offering world-class solutions at affordable prices, EasyPay123 helps merchants simplify process of acquiring, launching and using payment applications to improve way they do business. Visit us at www.EasyPay123.com.

For a description of some of e-commerce terms used in this article, please visit our online glossary at www.EasyPay123.com.

If you found this article helpful, you may wish to request one or more of other articles in EasyPay123 series by visiting our website. Articles in this series include:

Understanding E-commerce Transactions How Transactions are Processed Getting Merchant Accounts How to Design and Build Payment Applications How to Choose a Payment Gateway How to Pick a Shopping Cart Preventing Online Fraud Gaining Visibility for Your Website Understanding Wireless Payments

© 2003 EasyPay123. All Rights Reserved. This article may not be copied, reprinted, published, translated, hosted, or otherwise distributed by any means without explicit written permission from EasyPay123.