Virtual Entrepreneur

Rolling In The E-Cash

PC Welt:
Open for business - If you are new to commerce in general you’ll need to set up a merchant account. This is either a bank or internet account where deposits can be made. Banks may be less willing to set up such accounts for online transactions because of the risk of fraud, but there are plenty of e-merchant sites online, including Web-Merchant.

However, you should expect to pay setup and transaction fees for this account. For your customers, efficient delivery of goods or services will be the most pressing concern, but you’ll want to receive payments as efficiently and quickly as possible. There are 3 main ways of processing payments, each of which has its own relative benefits and down sides:

1. Manual processing - if you run a business offline, then you’ll probably already have in place the mechanisms required to take customers’ credit-and-debit-card details. If your software or hosting service supports it, you can have such details sent directly to your desktop so that they can be processed manually. The advantage of this is that it’s cheap and it saves you time and effort. But it does mean that customers will not be notified of a successful sale until you enter their card number and mail them back.

2. Use a payment gateway - one way to provide instant notification to customers is to use a third-party payment gateway. These companies, including Nochex, Protx and WorldPay, process payments in real time and transfer money into your account. Such services check for card fraud, but the down side is that you have to pay a fee of up to up to 5% for each transaction.

3. PayPal (*) - an increasingly popular alternative to payment gateways - or rather, a special gateway in its own right - is PayPal. You can use its merchant services to allow people to pay directly into your PayPal account - if they have subscribed. PayPal sometimes charges more for services than other gateways, but it is generally much simpler to set up.

The fear of fraud
A main concern for anyone engaged in e-commerce, whether as a supplier or consumer, is the threat of credit card fraud. While buyers will often fear the simple filching of card details, which does not necessarily constitute identity theft - a much more sophisticated crime - sellers are often more at risk from what is referred to as cyber shoplifting.

While consumers are protected by the Consumer Credit Act of 1974 for purchases between ‘100 (US$178) and ‘30,000, such protection does not apply to your online store. This doesn’t make you defenseless, however.

First of all, use all the features provided by payment processors and card issuers, including collecting the 3-digit security code that cannot be scanned by card readers on the back of credit or debit cards. You can use address-verification services where available from gateway companies. Although these will take more time and effort on your part, there are a number of options available to you. Always confirm that the delivery address is the same as that for billing.

It’s good practice to set a limit for a ‘held orders’ department - for example, any orders over ‘200 may be held back to be reviewed manually. If you’re in doubt about any order, use provided phone numbers to contact the customer. If this is no good, contact the credit company and ask them to contact the buyer for you.

The threat of fraud should by no means deter you from engaging from e-commerce, but it’s always best to be as well prepared as you can be. The truth is that while only a few years ago it was technically very difficult to set up an online store, it’s now become extremely simple. A few effective procedures, such as not posting to PO boxes, should help to protect you.

How to set up store in half an hour using 1&1’s eShop:
1. After you have signed on to 1&1, enter your relevant business information, including contact details and VAT number. After entering these particulars under Basic Settings, click on the Basket Settings link to set up a shopping basket. Select currency options. You’ll need to add product categories;

2. The next step is to confirm the Order Process. In this section, you tick what information is required from customers. On this screen you can select options for text to include in automated responses to orders, as well as a URL for terms and conditions. Bearing in mind the problems around fraud, it’s advisable to collect as much information as possible at this stage - but beware that making certain details, such as mobile phone numbers, compulsory is likely to turn off potential buyers;

3. Specify shipping costs and set up Payment Methods. 1&1’s eShops provide support for WorldPay and Protx, or you can select manual processing. Check the boxes for the different types of card you wish to use. After this, check details from the main Administration page and you’re ready to start adding products to your shop. Also check the Department of Trade and Industry’s comprehensive guide.

(*) And if you live in a country that is not covered by most payment gateways, we suggest you trying EPay - The New Way To Deal With Money Online.