A Trip To BusinessLink

Hello, once again!

I've now managed to get some clarification on the payment processing side of things and I've got my head straight. If you are reading this blog because you intend to set up a web-shop as a serious business for money-making, I recommend that if you haven't already checked out Business Link (which is a government quango created to help people setting up a business), then you better get on the case, sharpish! Top marks go out to this site for clarity and quality of info.

As I mentioned before, if you own a corner shop (a physical business) and you want to take card payments, you have to have the 'interface with the banks' that allows you to process transactions. It transpires that this is done through what they call a 'merchant account' that you have to set up with a bank. You would have to supply business history, turnover forecast, average transaction values, transaction frequency, suppler details etc etc. Furthermore, you would have to pay either a flat rate fee to the bank, or pay the bank a percentage of each transaction. We all know about banks; their services are not cheap, they like to milk you, properly.

Now think about our online store, it's very similar really. Let's compare the purchase processes of the online store and the cornershop:

Corner Shop:
1) Customer browses products on shelves.
2) Customer chooses items and puts them in basket.
3) Customer brings basket to checkout (therefore confirming his order in full).
4) Customers card info is sent to external processing (via the bank merchant account).
5) Transaction goes through.
6) Customer walks off with goods.

Online Store:
1) Customer browses products in gallery.
2) Customer chooses items and adds them to basket.
3) Customer reviews basket (therefore confirming his order in full).
4) Customers card info is sent to external processing (via a Google Checkout merchant account).
5) Transaction goes through.
6) We are ready to post the goods to the customer.

If I design the system from scratch and opt to handle processing myself, it will actually be less effective. I'd have to design the system so that is displays the cart contents to the customer for confirmation. Once confirmed, I would have to hold the cart contents in the computer's memory while I present the customer with another form, for his card details and delivery address details. I would then need to use these card details to clear the payment using my bank merchant account.

If I use Google Checkout, or a similar online merchant account service, it's basically the same but there are key differences. Like I've stated before, the Google name is recognised, therefore customers will feel more at ease using a Google service than they would using my basic, hand made form (although, saying that, I would make it very pro-looking). Also, Google Checkout also only charges a very small amount per transaction, 1-2%, as opposed to the banks, which I am informed charge 2-6%.

With Google Checkout, the customer never actually has to trust me with their card details at all. They register their card with Google and they simply use their existing username and password to pay at ANY online shop that uses Google Checkout as a processing option. I hope all that made sense.

All I have to worry about is how I communicate the contents of the user's virtual shopping basket to Google.

For more details on the bank-based system, please read 'Accepting Debit And Credit Cards' on BusinessLink. For more on Google Checkout, do some research here.

That's all for now. It's gonna get better from here, I promise.
Implementation is coming up shortly. YESSSS... THATS WHAT WE LIKE!

Phil ;)