There are two broad options to consider if you want to sell goods or services from your site:

• Use a third party services company to handle all billing matters from their web site
• Process credit cards from a page on your own web site, using your own merchant account.

The first option is the easiest to implement, especially for companies just starting into ecommerce. The initial costs are much lower, and the technical issues are more straight forward to deal with. Once a merchant site begins to do high volumes of business, the long-run cost savings sometimes - but not always - justify moving to in-house payment processing.

Third party online payment processing services

When a visitor at your site either clicks on a "buy" button for an item at your site or clicks "check out" from within a shopping cart program (explained below) at your site. Then they are taken to (for example) PayPal.com's web site, where they enter their personal and credit card information (including separate billing and shipping addresses if relevant). The credit card processing takes place on PayPal's secure servers, so there is no need for you to set up secure SSL pages on your own web site. Once the payment process is completed, your customer will be returned to your own web site.

Your customer's credit card statements will actually show a charge to PayPal.com instead of your company. Both you and the customer get an email receipt about the purchase. Then, you can either ship the product to the customer, or send them the product information (log-in user name, passwords, or download page etc.) that allows them to complete their purchase. The credit card processing service assumes full responsibility for handling customer service for the credit card transaction.

Two of the leading companies that will accept credit card transactions for your goods or services are 2CheckOut and PayPal. Both involve easy setup and relatively easy integration into your web site. Both also provide free shopping cart software to handle multiple products. Their services also easily set up to handle recurring billing, for membership or subscription driven sites. PayPal also allows for a "trial period" that delays the actual processing of the credit card - useful if you want to allow your customers to try your services for a 30-day free trial, for example.

PayPal is one of the pioneers of internet credit card processing without a merchant account. PayPal is a division of eBay and conducts a huge volume in payment processing for web site around the world. With PayPal, your customers can pay directly with their own credit cards: Visa, MasterCard, Discover, and American Express. Or, your customers can use their personal PayPal account to pay - over 100 million people in 190 countries have PayPal accounts There are no set up fees, and the basic transaction costs are very low: $.30 plus 2.2 to 2.9%. It's a very easy way to facilitate payment and it has a wide international program. You can set up individual buttons to sell specific items from your web site. International merchants are welcome and multiple currencies supported. Setup takes a few days as they verify your banking and credit card information. PayPal provides you with a free shopping cart if you have multiple items your customers might want to purchase. Or you can use "Buy Now" buttons for individual items.

2CheckOut.com will sell your goods and services through your web site for a $49 setup fee and no monthly minimum charges. Their fees are $0.45 per transaction plus 5.5% of the transaction amount. There is no term contract and they will begin accepting orders for your goods and services within minutes. Technically, you engage 2checkout as an "authorized retailer" of your goods and services. This service is an excellent choice if you offer services, products, or charge memerbship fees - recurring billing is supported, too! International merchants and customers are welcome, with payment processing available in 12 currencies. Credit Card purchases accepted within minutes for a low one-time fee and instant set up, Click Here

Payment processing with your own merchant account

In order to process credit cards from your own site, you need to have several elements all arranged:

1. Secure Socket Layers and an SSL Certificate

2. Internet Merchant Account

3. Payment Gateway

4. Processing Software

You need to install Secure Socket Layers and an SSL Certificate. Together these allow your site to communicate with your visitor's web browser in a secure and encrypted way.  This is essential to providing secure and confidential financial transactions that all but eliminate the risk of electronic eavesdroppers from intercepting credit card information. It is NOT recommended that you use a shared SSL certificate for serious ecommerce. Default security settings in most browsers will warn a customer that the shared SSL certificate is issued to someone other than the current website; such a warning can undermine people's confidence in the security of their transactions.

In order to set up SSL, you will also need to order a static IP. This is the numerical address that corresponds to the written part of www.yoursite.com, which could be 143.45.123.3, for example. Most web hosting companies, including this service, provide basic hosting on dynamic IP numbers that allow more web sites to occupy the internet space than there are really numerical address available.  All web hosting companies are assigned a finite number of numerical IP's, and thus they charge for these when a customer wants one all to themselves. 

With our hosting services, you can order a static IP from your Control Panel for a small monthly fee.

The SSL Certificate is a piece of software provided by services such as Verisign, GeoTrust, or Comodo's Instant SSL that certifies that the web site is in fact owned and operated by the people that say they do. It's a type of guarantee that you're doing business with the people you think you are. In addition, most SSL certificates provide some level of financial compensation to customers (usually in increments of $50, $2500, $10,000) if the owners of the certificate end up having faked their credentials.

Some hosting services provide their clients with a free shared SSL certificate. While this has obvious cost advantages, there is the slight possibility that a shared certificate will be revoked because of fraudulent activity by one of the hosting company's other client web sites. However, hosting with a shared SSL certificate is one way of getting into ecommerce gently. But it is still best in the long run to obtain one's own certificate.

From a technical point of view, the SSL certificate is a bit of code that has to be installed in your web account, and its presence allows a visitor's browser to turn on encryption when communicating with your web page. Customers can send their credit card information over the Internet safely, because all the data is encrypted when SSL is enabled. The lock sign that appears in the bottom right corner of Internet Explorer is an indication that you are communicating over SSL in encrypted from. You may also notice that the address you are using begins with "https://" instead of the usual "http://" - the 's' indicates a secure connection address.

To find out more details about setting up SSL with 123BuildaSite.com's hosting, read the FAQ on SSL Certificates - click here.

With your SSL set up, you also need to arrange the actual financial parts of the puzzle. You need a merchant account, a payment gateway, and some software for the transactions.

The internet merchant account is literally a banking account that allows you to accept credit cards online. It is important to realize that even if you are an established company that accepts credit cards in a physical store, this does not mean that your merchant account allows you to accept credit cards over the internet. You have to have explicit approval for internet transactions, and the services charges are different (i.e. higher!).

A payment gateway is the actual communication path between your web site and the credit card provider's computer that allows a transaction to be authorized and credited to your merchant account. Several companies provide payment gateway services, and Authorize.net is one of the largest.

You will also likely need shopping cart software if you have more than a few items for sale, or if your customers are able to select combinations of several items in different sizes, colors, etc. The shopping cart software provides a way to store the customer's shopping choices, should they want to consider buying more items, until they actually "check out" and processes their purchases.

Finally you also need to install onto your web site the software program that actually handles the credit card transaction.

As you can see, it can be a rather complicated process to set up a system to process credit card transactions from your own site - this is why many people opt for the simplicity of payment processing through third party merchant accounts like PayPal and 2Checkout.

However, there are quite a few companies that offer a bundle of these services, providing an integrated package of payment gateway, merchant account, shopping cart, and processing software.

Electronic Transfer Inc. - free application, free shopping cart software and product page generator (use for small number of products that can fit on one page). Their fees are very low priced and include the payment gateway: 2.25% plus $0.30 per transaction, and $10 in monthly fees. Actual processing provided on their own SSL server, so you don't need to set up SSL on your own site. Approval to begin processing is usually given within 72 hours. Applicants must be US citizens and have a physical street address. Click here for Merchant Accounts with no application fee

Return to top