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So you want to set up e-commerce?

Below are some information, resources and links I've put together to help you understand what is needed to set up an online store.
(The below information is just that, information. The webmaster is not recommending or promoting or has any affiliation with any of the sites.)

How to Get Started

Understanding how it all Works

To Set up your e-commerce business on the web you will need the following:

A Website, preferably your own domain name, ie: www.mycompany.com
Your domain needs to be hosted on a server.
You now need a way for customers to actually place orders. Shopping cart software is available to do that. Remember you can put the store you created on the same server as your website, but to accept credit cards you will need a Merchant Account with your bank and a Secure Server.

Below are some explanations of what will be needed to set up an online store for accepting credit cards. Costs will vary from company to company.

Shopping Cart Software.
SSL Secure Server.
- You will need a secure server so the credit card information that a customer gives you is secure. This is security between the customers browser and the server using the latest technology, SSL (Secure Sockets Layer), 128 bit encryption, Secure Digital Certificate. When your on a secure server - You will see a solid key or locked padlock in the lower left corner of the screen. The lock appears on a page that requests sensitive information, such as credit card, name etc.
Real Time Credit Card Processing set up.
- Purchase equipment to connect with the bank.
  Electronic Terminal - A terminal that connects with your Merchant Account, and authorizes the card (lets you know if the credit card is good). You either swipe a customers credit card or key in the information manually. A good example of this is when you are at a restaurant the cashier takes your credit cards and swipes it through a little credit card terminal, the same terminal then gives them an authorization code that tells them your credit card is good.
  PC Credit Card Processing Software - There are software programs that do credit authorization and electronic deposit just like the Electronic terminal, but with the computer you can imagine just how many more features you would have. Additional Reports etc. But remember you will still have to key in each sale. At the end of the day both the terminal and the software would total up your sales and electronically send it to the merchant account so they can process the payment and deposit it into your bank account.
- Real Time Credit Card Processing with companies like Cybercash or Authorize Net.
  Here is where most of the confusion comes in. Companies like Cybercash are really an online service that processes credit cards. Think of them as an electronic terminal. Instead of you having to purchase your own Electronic Terminal or the PC Processing Software, they will actually do it for you for a monthly fee. Some companies need this, others may already have their own equipment and do not need Real Time Credit Card Processing. You can set up certain Shopping Cart Software to interface with Real Time Credit Card Processing. (Cyberbercash and Authorize Net are the two most common) The way this is done is, you pay $100 Fee and the certain CGI scripts are installed on the secure server that interface with the bank. After the scripts are installed, the orders that are submitted through your store are sent directly to you and the credit card information has been sent to your merchant account. The reason this is so appealing to many companies is the fact it is the most secure way to process, and as a store owner you do not have to take the time to fill out charge card receipts, key in for authorizations etc.
Merchant Account with your bank
- This is where you apply with a company (usually a bank) to actually process the credit cards. This company processes the card for payment and deposits it into your regular business banking account. Now once you have a merchant account you have to have a way to send your customers credit card information to them and have them process it for payment for you. This is done electronically. You have two main options.
Design - Webmaster costs apply.

Need to build your business before investing in a Merchant Account

You can always put up an online store and accept checks and money orders without all of the above. Some companies are smaller in start up and do not have the cashflow to invest into setting up a merchant account. You can always set up a merchant account and the extras later.

Here are some informational links and sites:

Verisign pdf file that explains what is needed to start an online store through them.
Earthstores.com - An online company that advertises quick set-up of an online store. Risk free 30 day trial.
Virtual Cart - Another online company that advertises quick set-up of an online store. Risk free 30 day trial.

Processing Tutorial

Internet Credit Card Processing With NetBilling

Overview

Making purchases over the Internet involves four main parties: the consumer or credit card holder; the merchant who is offering products or services for sale; the merchant bank that has contracted with the merchant to enable the merchant to accept credit cards over the Internet; and the company that processes credit card payments for the merchant bank, known as the acquiring processor. (The acquiring processor processes merchants' credit card transactions through the financial network on behalf of merchant banks.) One other party is involved, the issuing bank that has issued the consumer's bank card.

The consumer interacts with the merchant's Web site by using a Web browser such as Netscape Navigator. To make credit card purchases, the consumer must obtain a bank card from an issuing bank and, when making a purchase, provide bank card information to the merchant's commerce application.

The merchant's commerce application makes goods and services available for sale over the Internet by payment-enabling the merchant's Web server application. To accept credit card payments over the Internet, the merchant must have an account with a merchant bank that offers Internet credit card processing. The merchant bank may also function as the acquiring processor to move the credit card transaction through the financial networks; or it may designate another company to function as acquiring processor on its behalf.

Steps In An Internet Credit Card Transaction

The diagram shows how a payment-enabled Web server handles an Internet credit card transaction.

When the consumer decides to buy something, the merchant's commerce application prompts the consumer for credit card information, usually along with other information such as a shipping address.
The consumer enters payment information either into a form secured by the Secure Sockets Layer (SSL) protocol or into an application, such as Netscape Navigator, that is compliant with the Secure Electronic Transactions (SET) specification. With the secured form, the payment information is protected by SSL as it is sent to the merchant. With SET, credit card information is enclosed in a "slip" - an encrypted, electronic analogy to a paper credit card slip. The slip is then sent to the merchant.
Using the payment software incorporated in the Web server, the merchant sends the encrypted transaction to the acquiring processor for authorization. The authorization is a request to hold funds for purchase.
The acquiring processor either authorizes a certain amount of money (and issues an authorization code) or declines the transaction. An authorization reduces the available credit limit but does not actually put a charge on the customer's bill or move money to the merchant.
If the transaction is authorized, a "capture" is the next step. The capture takes the information from the successful authorization and charges the authorized amount of money to the consumer's credit card. In line with bank card (Visa/MasterCard) association rules, the merchant is not allowed to capture transactions until the ordered goods can be shipped, so there may be a time lag between the authorization and the capture.
If the consumer cancels the order before it is captured, a "void" is generated; if the consumer returns goods after the transaction has been captured, a "credit" is generated.
The final step is to "settle" the transaction between the merchant and the acquiring processor. Captures and credits usually accumulate into a "batch" and are settled as a group. When a batch is submitted, the merchant's payment-enabled Web server connects with the acquiring processor to finalize the transactions and transfer monies to the merchant bank account.