Understanding Online Payments

Written by Robert Levings


Continued from page 1

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 satisfyrepparttar 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 enterrepparttar 108921 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 giverepparttar 108922 customer a signed receipt for their payment Make Sure That … Your merchant account is configured to take advantage ofrepparttar 108923 lower discount rate (i.e. credit card fee) ___________

Swipe card applications are ones whererepparttar 108924 credit card can be “swiped” through a card reader, andrepparttar 108925 customer can signrepparttar 108926 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 merchantsrepparttar 108927 right to accept credit cards for payment. A merchant account is required for each credit card you wish to accept. This step can berepparttar 108928 most time-consuming and frustrating for merchants, and it will also berepparttar 108929 component that most influences your costs of doing business online. Researching your merchant account options, understandingrepparttar 108930 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 thatrepparttar 108931 banks levy, and it varies by how “risky” your business is perceived to be (many factors enter into this, such as your credit history,repparttar 108932 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 uponrepparttar 108933 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 throughrepparttar 108934 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 isrepparttar 108935 service that connects your payment interface torepparttar 108936 financial network. Gateways takerepparttar 108937 payment information fromrepparttar 108938 application, ensure thatrepparttar 108939 data is valid, format it appropriately, and send it on torepparttar 108940 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 typicallyrepparttar 108941 job of your developer. Make sure thatrepparttar 108942 developer has done this kind of work before, and will be around if you need changes inrepparttar 108943 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 testingrepparttar 108944 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 thatrepparttar 108945 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 uponrepparttar 108946 needs of your customers and your business. When evaluating payment processing options start with your customers’ needs and document all ofrepparttar 108947 features that you wish to have in your payment solution. Takerepparttar 108948 time to shop around, and make sure thatrepparttar 108949 service providers that you choose are ones that you will be happy with inrepparttar 108950 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 simplifyrepparttar 108951 process of acquiring, launching and using payment applications to improverepparttar 108952 way they do business. Visit us at www.EasyPay123.com.

For a description of some ofrepparttar 108953 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.

Robert Levings is President of EasyPay123, a leading provider of online payment solutions to companies across North America.


Designing and Building Payment Applications

Written by Robert Levings


Continued from page 1

In some cases,repparttar payment gateway may actually displayrepparttar 108920 variable name that has been used for a specific data field inrepparttar 108921 response page (e.g. if you use “CustName” asrepparttar 108922 variable, this may be what is displayed torepparttar 108923 user inrepparttar 108924 response page, email, etc.). Wherever possible, try to use “customer-friendly” variable names rather than cryptic ones to avoid confusion onrepparttar 108925 part ofrepparttar 108926 user.

4. Fail Safe Development

Put fail-safes in place to compensate for internet connectivity failures that might result inrepparttar 108927 customer not getting a payment response fromrepparttar 108928 gateway. This involves working throughrepparttar 108929 logic of how a customer processes a transaction and receives notification ofrepparttar 108930 transaction to identify possible points of failure (e.g. what would happen if Internet connectivity failure occurred immediately after a customer posted a transaction torepparttar 108931 payment gateway but beforerepparttar 108932 response page was returned? How doesrepparttar 108933 customer know whatrepparttar 108934 status ofrepparttar 108935 transaction is?).

Fail-safes can take many forms. EasyPay123, for example, has a Get Transaction Status feature that allowsrepparttar 108936 application to query Skipjack based on unique order number to determine (a) whetherrepparttar 108937 transaction is inrepparttar 108938 system, and (b) if it, what its status is (e.g. approved, declined, settled, etc.). Oncerepparttar 108939 status is known,repparttar 108940 application can be programmed to determinerepparttar 108941 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 atrepparttar 108942 timerepparttar 108943 data is posted torepparttar 108944 payment gateway, or usingrepparttar 108945 results returned fromrepparttar 108946 payment gateway afterrepparttar 108947 transaction is processed. There are a number of ways to do this, either by havingrepparttar 108948 gateway post to a specific location, or by extracting and formattingrepparttar 108949 data for import intorepparttar 108950 third party application.

Talk to your payment gateway provider to determinerepparttar 108951 best method of integrating torepparttar 108952 application.

Step 4: Test

Testing can be accomplished duringrepparttar 108953 development stage by usingrepparttar 108954 payment gateway’s development environment (if one is available) and a test credit card. This allowsrepparttar 108955 developer andrepparttar 108956 user to ensure thatrepparttar 108957 application functions inrepparttar 108958 manner that it should. Development testing only provides assurance ofrepparttar 108959 functional parts ofrepparttar 108960 application, however. To ensure that funds are approved and settled properly, testing should also be performed withrepparttar 108961 application onrepparttar 108962 “live” platform before making it available for general use. We recommendrepparttar 108963 following:

1. Using a live credit card, authorize a transaction inrepparttar 108964 amount of $1.00 2. Ensure thatrepparttar 108965 transaction is successfully approved, and that: (a) The response page is displayed and contains all ofrepparttar 108966 necessary information (b) The email receipt is received and contains all ofrepparttar 108967 necessary information (if an email receipt is being used) 3. After 24-48 hours (depending uponrepparttar 108968 merchant bank), checkrepparttar 108969 merchant bank account to determine ifrepparttar 108970 funds fromrepparttar 108971 authorization were successfully deposited. 4. Verify thatrepparttar 108972 merchant name appearing onrepparttar 108973 live credit card statement used in Step 1 appears as expected (this is defined duringrepparttar 108974 merchant account application process, and is typically a derivative ofrepparttar 108975 “doing business as” name onrepparttar 108976 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 ofrepparttar 108977 above. If your customers/users are not aware that it exists, your success at achieving your objectives may be reduced. You will need to getrepparttar 108978 word out that your application exists. This could include advertising or leveraging search engines inrepparttar 108979 case of online retail, or a link to your payment interface in your emails and invoices inrepparttar 108980 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 ofrepparttar 108981 value and implications ofrepparttar 108982 new payment application, since it may affect how they do their job or interact with customers. Sending an internal bulletin to them describingrepparttar 108983 application, its value, and how it may impact them, will go a long way toward avoiding confusion oncerepparttar 108984 application launches.

Design and Development Tips

* Data validation and required field coding will dramatically reduce end-user generated errors and dissatisfaction byrepparttar 108985 end user. * Design and test for all browser types. * Test, test, test to ensure that all elements ofrepparttar 108986 system are functioning properly. Mapping outrepparttar 108987 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 beyondrepparttar 108988 scope of this document. There are, however, basic steps that should be followed regardless ofrepparttar 108989 nature ofrepparttar 108990 integration. If you are a developer looking to integrate a payment gateway, your gateway provider should provide you withrepparttar 108991 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 usingrepparttar 108992 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 simplifyrepparttar 108993 process of acquiring, launching and using payment applications to improverepparttar 108994 way they do business. Visit us at www.EasyPay123.com.

For a description of some ofrepparttar 108995 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 ofrepparttar 108996 other articles inrepparttar 108997 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.



Robert Levings is President of EasyPay123, a leading provider of online payment solutions to merchants across North America.


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