Setting up your business to take orders online is a far cheaper method of expanding than opening another store, but what should you know before taking the plunge and opening an e-shop?

Data Security

Everyone's number-one concern when it comes to ordering online is security: the security of your card details and the safety of your personal information.

Naturally, your business will want to keep as much data about your customers as possible, but you must take reasonable steps to protect this data or you could be landed in serious trouble.

This page at the Business Link website provides some useful information on how the Data Protection Act 1998 applies to you and your business.

Keeping your customers' credit/debit card details on file opens a whole new level of data security requirements, so many smaller businesses don't even bother with it as it can be much more trouble than it is worth.

Online Payments

The purpose of setting up an e-commerce website is so that you can take orders over the internet, simultaneously expanding your potential customer base and making your ordering system easier for your customers. A major part of this process is taking customers' payments online.

There are two methods of achieving this, both of which require you to sign up with a third-party payment provider.

The first method is to make use of an external payment server. If you choose this option, your customers will browse your website for the goods they want, add them to their virtual shopping basket and then proceed to the checkout. The checkout is situated on another website that belongs to the payment provider. Some such payment providers include PayPal and Worldpay. This external website will probably feature the latest security. Your customers will enter their payment details and the transaction will be processed by the third-party provider.

Using a third-party payment provider is convenient and easy to set up. Such providers often won't charge a subscription fee for their service, instead charging only per transaction. But for this reason your per-transaction costs will usually be higher.

Also, while these providers often allow some degree of customisation of their checkout pages, such as using your own business logo and colour scheme, they will otherwise look different from the other pages on your website.

The second method of taking online payments is to use your own website server to take payments. This requires that you obtain a digital security 'certificate' for your website, which must be renewed every year. Your security certificate allows your website to send and receive encrypted data to your customer's web browser, thus making it safe for them to give you their card details online.

Instead of redirecting your customers away from your website to take their payments, this method allows you to keep your customers on your site the whole time. This in turn makes for a more streamlined buying experience from your website.

The downside of such a method is that you must have a special kind of bank account, called an Internet Merchant Account (IMA), which can be quite costly to set up and maintain. You are also responsible for handling your customers' card details, which requires a high level of security on your website.

Merchant Accounts

Your business' bank account allows you to send, receive and save money. You can write and receive cheques and make cash withdrawals and payments using your bank card.

A merchant account differs by providing you with the tools you need to take credit and debit card payments. A regular bank account does not give you this facility. But if you want to take payments online, which you will do if you are reading this article, then you will need a special type of merchant account called an Internet Merchant Account (IMA).

An IMA lets you take card payments over the internet, as well as providing all the usual features of a merchant account such as over-the-counter card payments and telephone card payments. You usually have to pay a monthly fee for your IMA as well as a small fee every time you take a payment.

When applying for an IMA be aware that, like other bank services, it can take several months to set up your account. If you are confident that you want an e-commerce website and you think having an IMA is the ideal solution for you then you should apply for your IMA as soon as possible.

Payment Gateways

You will need an IMA and a payment gateway if you plan to take payments on your own web server. A payment gateway is the facility that acts as a middleman between your IMA and your customer's bank account.

In a nutshell, your customer will place an order on your website and their card details will be forwarded to the payment gateway, which will then attempt to clear the request with their bank. If the transaction is authorised, the payment gateway will deposit the funds in your IMA.

Payment gateways usually charge an additional fee per transaction. You may be able to find a single provider that offers a combined IMA and payment gateway account. This will simplify the task of managing your transaction fees. Such accounts are also generally easier to implement and so can save you money on your web development costs.

You can find a useful list of payment gateway providers at this website.

How Small Star Studios Can Help You

Our team at Small Star Studios are happy to help guide you through the complicated process of setting up your online store. We'll be with you every step of the way, from helping you to choose your IMA and payment gateway providers to integrating your chosen payment solution with your new website.

With the Small Star Admin Panel you will be able to manage all aspects of your web store online. You'll be able to add and remove products from your e-catalogue, track orders and payments, view product statistics and market directly to your existing customers.

Give us a call today or type your message in the form below and we'll get you started on your exciting new e-commerce project.

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