If you plan on cashing in on e-commerce revolution, question is no longer whether or not you should accept credit cards and checks on your web site. The question now is how to set up a successful e-commerce solution that fits both your business model and your budget.
Here are some statistics you should be aware of: According to Nua Internet Surveys, as of January 2000, there are approximately 248.6 million people online worldwide.
CREDIT CARD USE DOUBLES IN YEAR Dec 3, 1999: Twice as many US adults used credit cards to buy products and services online in 1999 than did in 1998, according to new research from Cyber Dialogue.
INTERNET ECONOMY WORTH $1 TRILLION IN 2001 Nov 4, 1999: The Internet economy will be worth $1 trillion by end of 2001 and $2.8 trillion by end of 2003.
BUSINESS-TO-BUSINESS E-COMMERCE TO SOAR Business-to-business e-commerce will show blistering growth in coming years, with worldwide market expected to expand to $7.29 trillion by 2004, more than 50 times larger than in 1999, states a market research company. (TechWeb)
When you take these facts and figures into consideration, it's no surprise that more and more entrepreneurs and businesses are feverishly rushing to establish e-commerce web sites.
On surface, concept is very simple: You set up a web hosting account with a web hosting company; you create an appealing site that sells your products or services; and you get a credit card merchant account so you can accept credit cards.
But there is more to enabling an e-commerce web site. There is a lot of uncommon knowledge regarding establishment and operation of a successful e-commerce web site, which makes difference between your site becoming a success or thousands of dollars wasted and hundreds of hours of pain-staking trial and error.
SIX DEADLY E-COMMERCE SINS I have outlined below six deadly sins that can derail an otherwise simple process of enabling an e-commerce web site.
1.Merchant account does not support e-commerce or AVS If your merchant account is not compatible with Internet processing systems, you will need to manually enter transactions and even risk losing your account due to bank regulations. AVS (Address Verification System) is required by VISA and it is a system that matches address criteria on cardholder's statement to reduce chargebacks. If AVS is not used, you can be charged up to 3.75% or more per transaction and leave yourself open to chargebacks. If you incur a chargeback rate higher than 3%, bank may terminate your merchant privileges. Once you are listed as a terminated merchant, getting another credit card merchant account is virtually impossible. Be sure your processing solution uses AVS and that your merchant account is set up for Internet processing.
2.Processing solution does not support real-time processing Processing solutions that do not work in real-time can wreak havoc on your growth and marketing efforts. Spending time entering every order manually can literally cost you more than order is worth. Also, when Internet orders are not processed in real-time, you won't know if a credit card is valid until you manually process it, at which point you will need to personally contact card holder. This can turn into a time consuming and costly process, especially if customer lives overseas.
Of all credit card orders processed by our office, about 7% are invalid or declined first time. Fortunately, since we utilize a real-time processing system, customer is able to re-enter his/her credit card number or use a different card.
Additionally, AVS is not typically used or available with manual systems, thus boosting your transaction discount rate to a whopping 3.75% on every dollar!
3.ISP or hosting company does not support particular processing solution or shopping cart Often, a web host does not support a certain shopping cart. In addition, not all shopping carts work with all credit card processing solutions. Furthermore, if you're working with a different vendor for each service, you're vulnerable to customer service nightmares. Few things are worse for an online business than not being able to get fast answers to common questions or problems. You can save yourself a bundle of frustration by working with a company that can provide one-stop service for your web hosting, shopping cart, and e-commerce needs.