CREATING AN ONLINE STORE AND CREDIT CARD PROCESSING SYSTEM

Logic House Media has built several online stores, shopping carts and credit card processing applications, each with its own set of parameters and features to fit the client's specifications. Any business expanding into online sales should educate themselves on the process and figure out exactly how they want their customer's buying experience to flow.

Here are some things to consider when making decisions on an online sales application.

Customer Experience

There are many different types of online stores and ways to accept credit card payments online. Deciding how your customers make purchases along with your own internal bookkeeping, order fulfillment and frequency of changing items or services will influence your online store. For instance, multiple item sales might work best in a catalog where a simple service or transaction with no options might be work better as a "pay only" interface.

An online catalog of products typically stores all the item numbers, item names, short descriptions, long descriptions, options, image names and prices. By storing the items in a database, the programming code that allows the user to view the products, make selections and add items to their shopping cart is much less tedious to implement than creating a separate "page" for each item, preview, etc.. Databases provide powerful options like the ability to calculate quantities and prices and store a users' order information. They also provide the most efficient way to maintain an online store.

In other cases a catalog is not required. Some of our clients only need to sell one item on their site, like a "Gift Card" or a one CD. These types of sales only require a checkout process, where the buyer enters their billing, shipping and credit card information.

Deciding what the customer sees on the screen as they browse through your items and services is completely up to you but important to determine before you start developing your store or online purchasing system.

Online Merchant Account

Credit cards are processed through "merchant accounts" with a bank or other financial institution which debits or credits your account as transactions are made. Business owners who already accept credit cards in their physical using a "swipe" machine are familiar with how this works. To accept payments online you will need an "Online Merchant Account". Your current bank or financial institution is the best place to start since you already have a relationship with them. There are several things banks require to set up an Online Merchant Account and each one is different. If your bank doesn't offer the service, they might recommend one and there are many you can find online.

The expense for an Online Merchant Account varies from bank to bank, but expect a per transaction fee of 2% to 5% PLUS a transaction fee ranging from $ 0.15 to $.0.35 per transaction. In addition, you may be charged a monthly statement fee, ranging from $10 to $35 per month.

Hosting

Your online sales system will require extra processes from the site server to communicate with the customer, the customer's bank, your bank and the payment gateway securely. Our minimum charge for hosting a website with an online payment system is $60 per month.

Secure Socket Layer (SSL)

An SSL "secure socket layer" certificate is an electronic tool that encrypts the data connection between the customer's computer and your website, and from your website to the Gateway (described next) which processes the customer's credit card.

You will need to purchase an SSL certificate. We are currently using Network Solutions and Thawte Thawte for these certificates The cost is anywhere from $110 to $199 per year.

Payment Gateway

A Gateway is a service that verifies credit cards and securely transfers the transaction to your bank. They "authorize" the credit card, checking the card number, security code, expiration date and customer name with the card issuer. There are several companies that provide gateway services. Our recommendation is Authorize.net, the Industry leader who has also been around the longest. We can help you get setup them.

The following diagram will give you an overview of the technical apects of an online purchase procedure:

Logic House Media can guide you through the setup process. Since you're the business owner, two of the requirements will and applications will need to be initiated by you:

• Contact Your Bank to find out if they offer an Online Merchant Account and Payment Gateway

• Depending on their answer, you may also need to find a Payment Gateway

While that process is underway, Logic House Media will begin the following process:

Setup your new hosting account designed for online payments
Purchase and setup your SSL certificate on your website server
Create the Catalog Page or information showing the customer which items or services they can purchase
Create the Shopping Cart which stores the customer's selections
Create the Customer Order Page which gathers the customer's billing, shipping and credit card information
Create the Checkout Page which confirms the order for customer on-screen review
Create the Process Page which sends the credit card information to the Gateway for processing
Create the Thank You / Error Page so the buyer knows the result of the transaction
Create an Auto Email Receipt which is sent to you and the buyer
Ccrete and Admin Area for your online store where you can view and track orders

Estimated Cost Summary
Cart Hosting	$ 60.00
1 year SSL Certificate $ 199.00	$ 16.67
Authorize.net Monthly Fee      + $ 0.10 fee per transaction	$ 20.00
Monthly statement fee from bank      + 4.67% transaction fee      this allows maximum profit on $.99 downloads      based on $50.000 in annual sales	$ 10.00
Website Catalog and Payment System      Variable rate. Please request a quote	$ ????