Shopping Carts, Gateways And Merchant Accounts

Accepting credit and debit card payments on your website is an excellent way to boost sales and improve customer satisfaction for your eCommerce business. If you want your business to have the ability to accept online credit and debit transactions, you’ll need three components:

  1. Shopping cart program
  2. Payment gateway
  3. Merchant account

You can acquire these separately, but it is wise to have the payment gateway and the merchant account setup with the same company, which can make it simple to coordinate and guarantee that your payment gateway and merchant account will be compatible. It is also prudent to signup with a shopping cart that is compatible with as many payment gateways as possible. Too often we have seen a shopping cart work only with a few payment gateways, and if a merchant is considered high risk, and is not be able to get approved with a merchant account provider whose gateway is supported by the shopping cart, then the merchant must abandon that cart and start afresh with a shopping cart that is compatible with the gateway that their merchant account supports! If you are just starting out, be sure to view our list of supported shopping carts.

A shopping cart is a software package that allows your customer to add multiple items to the same order, rather than having to place a separate order for each piece they wish to buy. With your website’s shopping cart, a customer will be able to accumulate multiple items, adding and removing them from their order easily, or save their entire order to complete their purchase at another time without having to find the items all over again. They can specify color, size, and other attributes of their order, make decisions about shipping, and include special instructions for the order. A shopping cart program can be automated to check your inventory before a customer places an order, to ensure that you have the item in stock. Shopping cart software also allows the merchant to observe buying trends, seeing which items are frequently ordered together, and track orders at every stage of the process.

When a customer enters their credit card information into your shopping cart, it passes through to your payment gateway, another piece of software that connects with your website, your merchant account (processing bank), and your customer’s credit card issuing bank. The gateway software checks the customer’s account to ensure that the billing information is accurate and that the funds are available. If this query receives an approval response, the transaction is approved and the funds are drawn out of the customer’s account and deposited via the processing bank into your checking account, less any relevant processing fees. The gateway must be PCI compliant, meaning that the entire transaction is encrypted and takes place in a secure environment, protected from any potential electronic theft. Durango’s payment gateway is level 1 PCI certified.

To complete the transaction, you need a processing bank. The payment gateway only allows the relevant financial institutions to interface securely; it is the processing bank that transfers the money from the customer’s account to your checking account. It is worth spending some time comparing providers when planning to open a merchant account, and not just to find the cheapest rate! Take a careful look at the services and most importantly, the customer support that the processor offers; it’s important to find a provider with personalized and dependable customer service that will allow you to talk with a dedicated account manager (not just a sales agent that you won’t hear from again after signing up!). Also, ensure that they offer fraud protection solutions that will help you minimize chargebacks that can put your business at risk.

Having the ability to accept credit and debit transactions makes your internet-based business much more convenient and attractive to customers, sometimes increasing your total sales several times over. It also makes the funds from your customers’ transactions available in your checking account much more quickly than other payment avenues. Accepting credit cards is not without its risks however, since a customer can issue a chargeback any time within six months of the transaction, and the potential of fraud is increased in any transaction where the customer and the card are not present, including online transactions. It’s important to find a merchant account provider that is compatible with your shopping cart software, that offers a secure payment processing gateway, the merchant account (of course!), while also providing the customer service, support, and protection your business needs.