Starting an ecommerce site – how do you get paid?

Published on May 18, 2010 Starting an ecommerce site – how do you get paid?

The actual process of getting paid from a shopping cart transaction is something that confuses many people starting up an ecommerce business.

This quick guide steps through the process of getting paid from a shopping cart transaction.

In general, there are three parties involved in an ecommerce transaction:

• Your bank account – where the money eventually ends up.
• Your shopping cart website – the place where your products are listed, your customers details are saved and your orders are recorded.
• Your payment provider (if you are accepting credit cards).

When a customer comes to your shopping cart website puts an item into the cart and goes through the checkout process, what is happening when they click confirm? What happens next depends on what type of payment method has been chosen.

For payment via third party providers like PayPal, Stripe

Here’s the process, using PayPal as an example:

1. The Ozcart shopping cart redirects the customer to PayPal’s website.
2. PayPal collects the credit card details from the customer in an online form.
3. The customer clicks to process the order.
4. PayPal takes the money from the customer’s credit card.
5. PayPal puts the money into your business PayPal account.
6. PayPal shows the customer a screen to say the transaction was a success and asks them to click back to your shopping cart website.
7. The customer clicks back to your site to complete the order.
8. Your Ozcart website sends an order confirmation to the customer and to the store owner and displays a message to the customer.

For payment directly into your bank account

Here’s the process, using a merchant bank account and a third party payment gateway provider. The payment gateway provider is the go-between that sits between the shopping cart software and your merchant bank account.

Some banks act as both merchant bank account providers and payment gateway providers (e.g., NAB Transact, CommWeb, ANZ eGate) so there is only one place you need to set up an account for, but in most cases you have a separate account with the gateway provider (e.g., Camtech or eWAY) and the bank (NAB, Commonwealth, ANZ, etc.).

1. The Ozcart shopping cart redirects the customer to the payment gateway’s website (e.g., NAB Transact, DirectOne, eWay, ANZ eGate, etc.).
2. The gateway website collects the credit card details.
3. The customer clicks to process the order.
4. The payment gateway takes the money from the customer’s credit card and transfers it to the merchant bank account.
5. The payment gateway displays a message to the customer and asks them to click back to your Ozcart website.
6. The customer clicks to return to the shopping cart website.
7. Your Ozcart website sends an order confirmation to the customer and to the store owner and displays a message to the customer.

The shopping cart website doesn’t collect the money and pass it on to you, it just facilitates the payment process. You’ll need separate accounts with your payment provider, payment gateway and bank as appropriate.