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A guide to E-Commerce



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Electronic commerce, or e-commerce, means buying products or services over the internet. One way of doing so is by using a credit card and the way in which this process works is shown in the diagram below.

· The consumer visits the online web store to purchase your merchandise. The transaction details are then carried over a secure connection, or SSL, to the web host’s server.

· Their encrypted credit card details are handled by the Payment Processing Gateway, which manages the transaction.

· The movement of funds is processed by the merchant account.

· The funds are then debited from the buyer’s credit card account.

· Followed by the funds being deposited into the seller’s bank account.

Managing E-commerce

There are different ways of managing e-commerce transactions on your website. Perhaps the simplest method is allowing a third party, such as Paypal, to deal with all your e-commerce processing or another method is by incorporating everything into your website pages.

To handle everything through your website, your site will need to be designed to show your merchandise.

· You can utilize the shopping cart system.

· Alternatively, you can create a system of your own, with a customized website and a database.

If you are going to accept credit card transactions through your website, it’s important you have Secure Socket Layer, or SSL, encryption in place. This ensures all transaction details are encrypted as they travel between the buyers PC and the server. When using an SSL protected system, a small lock icon can be seen on your web browser at the bottom right of the screen.

There are two ways of incorporating SSL into your website.

· You can share the SSL area with the hosts.

· You can purchase your own SSL certificate. This costs around $100 each year and requires that you have a hosing account and a unique IP address. This method is certainly more professional than using a third party such as Paypal.

If you decide to handle e-commerce transactions via your website, rather than allowing a third party to manage them, you will also need to set up a Merchant Account and a processor account.


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