What’s Required to Build an Ecommerce Site
An ecommerce site is a slightly different critter than a regular website. In addition to the things that a regular website needs, an ecommerce site also requires some kind of "payment gateway" and possibly a Secure Sockets Layer (SSL) certificate. Simply put, a payment gateway is the service that allows a third party company to arrange the transfer of money from someone else’s account to yours.
You have a pretty wide assortment of choices in payment gateways, but generally speaking, most of our customers use either Authorize.net or PayPal.com. Authorize.net (and most similar services) charge an up-front fee that runs between $100 and $500 to establish your new account, plus a service charge of approximately 2% to 4% on each transaction, plus a monthly statement fee of $10 to $25 if your total transactions don’t meet their monthly minimum. When you choose Authorize.net or a similar service, you will also need to purchase and maintain a Secure Sockets Layer (SSL) certificate (at a cost of around $100 a year) to ensure that your customer’s online transactions remain protected and secure. PayPal.com, on the other hand, only charges a simple transaction fee of approximately 2% to 3% on each purchase. PayPal.com does not charge you to set up the account, and they do not charge you a monthly statement fee if you don’t sell enough product. Lastly, since PayPal.com actually runs the payment process on their own website, you don’t need to purchase a Secure Sockets Layer (SSL) certificate since the actual transaction is physically conducted at the PayPal.com domain, and is therefore protected by the PayPal.com SSL certificate.
When to Use PayPal.com
I generally advise people to use PayPal.com if (1) their new online store will sell products that are relatively inexpensive, (2) they’re not sure that the business concept is going to yield significant financial returns, and (3) they need a simple way of accepting cash that doesn’t require any fancy interaction with the buyer or their own internal system.
Because there is no set-up or monthly fee, PayPal.com is an excellent way of testing the water. It does not cost anything to set it up, and it does not cost any extra per transaction. It’s also very easy for a knowledgeable web developer to implement a simple PayPal.com mechanism on your website using little "Buy Now" buttons.
As with anything, of course, there are also a few drawbacks to consider before choosing PayPal.com. First, they are not FDIC insured. I’m sure that PayPal.com is composed of many very lovely people, but I personally would feel much more comfortable knowing my $50K (or whatever) was sitting in an account actually backed by the US Government. Also, PayPal.com has a limit on how much cash you can withdraw each month, and how frequently. You can have that limit increased after jumping through a couple of hoops, but it’s something to be aware of. There’s also a bit of a lag between the time you request the funds and the time they actually arrive in your checking account or at your mailbox in the form of a check.
When to Use Authorize.net or a Similar Service
A full-blown Payment Gateway provider, like Authorize.net (or a similar service) is a more appropriate choice when you are arranging expensive or complex transactions, or when you need to automate other elements of your website based upon receiving various approval or other feedback codes. The advantage, of course, is that a service provider such as Authorize.net can more comprehensively relay information back to your website so that it performs any needed followup activity, such as interacting with your new customer, with your vendors, your shippers, and anybody else that needs to be part of the fulfillment and followup processes.
This material is Copyrighted. All rights reserved. Linda C. Uranga-Norton,
President and Founder, Urangatang Web Design. To obtain reprint
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