How to Process Online Business Orders - dummies

By Greg Holden

When someone submits credit card information to your online business, you need to transfer the information to the banking system. Whether you make this transfer yourself or hire another company to do it for you is up to you.

Do-it-yourself processing

To submit credit card information to your bank, you need point of sale (POS) hardware or software. The hardware, which you either purchase or lease from your bank, is a terminal — a gray box of the sort you see at many local retailers. The software is a program that contacts the bank through a modem.

The terminal or software is programmed to authorize the sale and transmit the data to the bank. The bank then credits your business or personal checking account. The bank also deducts the discount rate from your account weekly, monthly, or with each transaction.

If you have a small-scale website — perhaps with only one item for sale — you can use an online payment gateway, which enables you to add a Pay button to a catalog page that securely processes a customer’s payment information.

When you receive the information, you can manually submit it for payment by using a program such as First Data Global Gateway Connect (Virtual Terminal). The transaction is then processed on one of First Data’s secure servers. Both you and your customer receive e-mail notifications that the transaction is complete. You can find out more on the First Data website.

Automatic processing

You can hire a company to automatically process credit card orders for you. These companies compare the shipping and billing addresses to help make sure that the purchaser is the person who actually owns the card and not someone trying to use a stolen credit card number. If everything checks out, the company transmits the data directly to the bank.

You can look into the different options provided by VeriFone, Inc., or AssureBuy for such services.

Automatic credit card processing works so fast that your customer’s credit card can be charged immediately, whether or not you have an item in stock. If a customer receives a bill and is still waiting for an item that is on back order, he or she can get very unhappy. For this reason, some business owners choose not to use this type of service.