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Accepting Payments on your Web Site


In order to be able to sell from your website, you need to be able to accept payments. This might sound both obvious and reasonable enough; once you begin to scratch below the surface, however, some fundamental questions need to be answered before you can consider your site 'payment enabled'.

The two basic requirements for simple ecommerce are:

  • A shopping cart
  • a way to process payments

There is, of course, more than one solution, but as a starting point we shall compare an all-inclusive provider (PayPal) and a generic payment processor coupled with an off the shelf shopping cart. A processor such as PayPal will combine a payments interface (with shopping cart), but be fairly restrictive, while payment processors are slightly more complex to interface with.

Software Development Ecommerce Solution Web Development

Ecommerce Basics

Before we look at the actual order and payment process itself, we should familiarise ourselves with some basic ecommerce principles. The starting point is, of course, the customer selecting one or more items from the store, and proceeding to the checkout with their 'shopping cart' of goods.

Once payment has been accepted, and the goods shipped, one might think that the transaction is complete. However, we also need to be aware that there might be disputes (goods not arriving or fraudulent orders), returned goods and other refunds.

Ideally, when looking for a payments processor, it is useful to have some protection against fraudulent payments, otherwise you can find yourself liable to return the money. PayPal, for example, offers some protection, and a refund mechanism in which the fees that you paid to receive the money is also refunded.

Handling returns is also part of the equation, but here it is the vendor (or site owner) that makes the choice as to whether to accept returns in the first place, and subsequently how to handle refunds in cases where goods are returned.

Automating the Payment Process

Clearly one of the advantages of selling over the internet is the reduction of costs leading to higher profits. Following this through, reducing the human processing required to accept payments will also increase profit margins.

So, in choosing a processor, the aim should be to find a payment gateway that automates the process as far as possible. The alternative is to create code (or pay a programmer to create code) to build an interface that automates the entire payment process.

The payment part is easily automated by necessity – part of the authorisation and payment process could be done manually, but that would require staff present around the clock to handle telephone payments. So, the automation has grown out of necessity, and hence made as easy as possible.

The Payment Process

The basic payment process can be broken down into steps. Each step requires some form of validation, and this validation can, in some circumstances, actually cost money if not correctly implemented. The most obvious example is an incorrect shipping address; costs will likely manifest themselves in undelivered goods and subsequent refunds or resending of purchases.

However, errors in the shopping cart itself can also lead to costs; incorrectly handling multiple occurrences of goods in the basket, erroneous sales tax calculations, and improper shipping charges being among the more common. A good implementation team will iron all these out as a matter of course.

Card pre-validation is another aspect where a seemingly easy fix can prove expensive. Remember that each access to the payment gateway costs money, and if a card number is incorrectly typed, you will pay just to find that out. A correct implementation will check the final digit against a calculated value (called a Luhn check) and detect the vast marjority of typing errors.

Finally, the actual payment processing can take some time, so be sure that the system that is implemented shows appropriate messages, and deals correctly with accidental multiple clicks. Otherwise, users will be at best frustrated, or at worse, posting multiple orders which will have to be refunded.

PayPal as a Payments Processor

While the preceding examples have all assumed that a third party gateway processor has been used, PayPal actually offers most of the above. However, there is a slight penalty in the higher fees charged by PayPal to receive money, and a slightly limiting shopping cart system.

However, a good coding team will be able to interface with the cart, providing a higher level of flexibility. Many of the problems associated with charge backs and fraud can be eliminated by using PayPal, and some protection is afforded to both parties in the transaction. For high volume sales, however, a gateway processor is usually the best option.

Integrating Paypal into your ecommerce website

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