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Merchant services
such as eBay and 2Checkout
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Hosted shopping cart
services
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Fully integrated
shopping carts
Merchant Services
Most shopping
carts require you to have your own merchant account and gateway. A
merchant account is a bank account that allows a business to
conduct credit card transactions and the gateway allows the transaction
to be conducted over a secure connection. It’s okay if you don’t have a
merchant account or gateway. Merchant service shopping carts allow you
to use their merchant account, gateway and shopping cart for a higher
cost.
Merchant services
are beneficial for very small businesses or those that are just starting
and don’t have a lot of orders. Merchant services provide the merchant
account, gateway, hosted shopping cart and will maintain your customer’s
personal information. They usually require a set-up fee between 50 and
200 dollars, transaction fee between 30 and 75 cents, and 5% to 10% of
each transaction. Because you are using their merchant account, your
customer’s credit card statement will show the merchant services
business name not yours. In some cases, customers will not recognize the
charge and may dispute it.
Merchant service
shopping carts have an administrative interface, which allows you to
login to your account to add products, prices and shipping options. The
shopping cart generates the html for the purchase buttons and you
simply copy and paste the html into your web pages. When your customer
clicks on the purchase button, he is taken to another website to enter
the credit card information. This indicates to the customer that you are
a small business. Some potential customers will abandon the shopping
cart rather than enter their credit card information on a website they
know nothing about.
Once your
business grows to the point where you are processing over $1000 a month,
it’s more cost effective to apply for your own merchant account and
switch to either a hosted shopping cart (little or no programming) or a
fully integrated shopping cart (programming required).
Hosted Shopping Cart
The hosted
shopping cart is a great solution for a small business that is
processing over $1000 a month but does not have the resources to create
or customize a fully integrated shopping cart. Hosted shopping carts are
similar to the merchant services because they provide an administrative
interface for you to enter products, pricing and shipping options. They
will generate the html for the purchase buttons, which can be copied and
pasted into your html pages.
Hosted shopping
carts face some of same problems as merchant service carts because your
customers will be transferred to a different website to enter the credit
card information. Some hosted shopping carts allow you to customize the
shopping cart so that it has the same look and feel as your websites.
Customizing your shopping cart may require some programming skills,
but it could also prevent customers from abandoning their shopping
carts.
The main
difference between the merchant services shopping cart and the
hosted shopping cart is the name that appears on the customer’s credit
card and pricing. Hosted shopping carts allow you to use your own
merchant account and gateway, which means the customer’s credit card
statement will show your business name next to the charge. This can
decrease your charge backs.
If you are using
your own merchant account and conducting over $1000 of transitions each
month, the hosted shopping carts can be less expensive than merchant
services. Your merchant account will probably charge a monthly fee
between 20 and 60 dollars, transaction fee between 10 and 50 cents, and
a percentage of the transaction, usually ranging between 2% to 3.5%. In
addition to the merchant fees, your shopping cart service will also
charge a monthly fee between 10 and 30 dollars and could charge a
transaction fee. These fees sound more expensive than the merchant
service option, but if you are processing over $1000 a month and
growing, it’s better to pay flat monthly fees than continue to be
charged 5 to 10 percent of the each transaction.
Fully
Integrated Shopping Carts
The fully
integrated shopping cart is a great option for any business that can
afford it. The shopping cart will be dynamic and will have the same look
and feel as your website. The ZIP Baby Potty Training Store is a great
example of a fully integrated shopping cart. Fully integrated shopping
carts like this contain features that are not found in merchant service
or hosted shopping carts. For example, you can discount items, display
customer reviews, assign products to multiple categories, display out of
stock notifications, sort products and prices, and display shipping
estimates without requiring the customer to create an account.
Integrated
shopping carts require advanced programming skills and can often be used
with your own merchant account or with a service that allows you to use
their merchant account for a higher fee. There are many integrated
shopping carts available. Free carts require the most programming
skills, but if you don’t have the programming skills necessary to
customize a free shopping cart, there are many companies that specialize
in customizing fully integrated shopping carts.
Your choice of a
shopping cart can have a dramatic impact on your business. Your website
is the first and only impression you get to make so you’ll want to make
it as professional as possible. While shopping for a shopping cart
system, put yourself in your target customer’s shoes and browse the
Internet. Review your competitor’s websites as well as those outside
your industry. Make a list of shopping carts that you find appealing and
research them thoroughly before choosing one.
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