Archive for September, 2025

A big question for businesses entering the realm of ecommerce is how should they approach creating their ecommerce system. Should you use an out of the box package like Yahoo Stores or Shopify? Or should set up everything yourself (hosting, merchant account, shopping cart, etc.)?

Well, let’s look at the pros and cons to each:

Fully Hosted Solution

• Quicker set up

  Using an out of the box solution means everything is set up for you before you even start using the solution. All of the programming and integrating that needs to be done has already been done for you. You only need to customize the solution for your store and add your products.

• Technical issues handled by the solution provider

  Browser compatibility, gateway integration, database connectivity: all handled for you. Knowledge in web programming or other technical skills are not required as this is all handled by the solutions provider.

• Less overall maintenance

  Since the hardware and software that powers the solution is all managed by the solutions provider, all you need to do is manage your products and your orders.

• Possibly better security

  Naturally the security of the data each merchant stores on the provider’s servers is very valuable not only to the merchant but to hackers as well. Normally the security of this information requires constant checking and upgrading to make sure no new security vulnerabilities arise that may allow this data to be compromised. Fortunately the provider handles all of this.

• Higher costs

  Naturally the provider is not going to offer their services for free. Not coincidentally they will not offer it at cost either. You will have the same costs as you would if you attempted to establish the service yourself plus the mark up of the provider.

• Less control

  Since you do not own or control the software offered by the provider you are limited to whatever the provider will allow you to do. This means you cannot customize the software to fit your needs. You can only do what they decide their software will allow you to do. Additionally, this solutions typically do not allow you full customization of the appearance of your store. This means your store either won’t match the rest of your website or, even worse, will look just like every other store hosted by the provider.

“Self Serve” Solution

• Lower costs

  Because you are free to shop around for the software your store will use it is likely that you will find a solution that is well-priced. In fact, there are many free offerings for ecommerce solutions available. You also will be able to sign up for a merchant account that costs less to use then what most third party processors offer.

• More control

  Because you control every aspect of your solution you can be sure it meets your exacting specifications. Your storefront and checkout will seamlessly integrate into your website and provide your customers with a professional shopping experience. You will have all of the features you want and none of the ones you don’t want. You can expand and alter your storefront whenever your business demands it.

• You are now a security expert

  Without a dedicated team minding the security of your storefront you take on the responsibility of ensuring your storefront and your data is safe and secure. You have to keep up with security updates for your software otherwise you risk exposing sensitive data. One occurrence of this can mean the end of your business.

What a smart business will do is make a lit of their priorities and then compare them to this list. One is no better then the other straight up. But one may be better then the other to your specific business based on your needs and wants.

Technorati Tags: yahoo stores, shopify, merchant account, ssl certificate

From CNet:

American Express, Discover Financial Services, JCB, MasterCard Worldwide and Visa International announced Thursday the creation of an organization to develop and maintain security standards for credit and debit card payments. It’s the first time the five brands have agreed on a single, common framework.

The newly formed Payment Card International (PCI) Security Standards Council will manage the PCI Data Security Standard, first established in January 2005 with the intention of making its implementation more efficient for all parties involved in a payment card transaction. That includes merchants, payment processors, point-of-sale vendors, financial institutions and more than a billion card holders worldwide.

The companies have come together despite being in competition with each other because they say ensuring better security will benefit everyone.

“First of all, it’s to protect the information of our mutual customers and to make the process of data security compliance easier,” said Rob Tourt, vice president of network services for Discover.

Having a single data-security standard is a critical issue for the entire industry and will simplify the process, said Brian Buckley, Visa’s senior vice president of international risk management.

“Our view is that this is first and foremost an important initiative to get data security in place for payment cards,” he said.

Having the common accepted set of rules should foster broader compliance, said Bruce Rutherford, MasterCard’s vice president of payments. Those rules include instructions on proper data encryption, common technical standards and security audit procedures.

The first action of the new council was to update the PCI security standard, which was promised in May. The revision gives instructions for how to implement the new standards and clarifies language that was previously considered vague. For example, terms such as “periodically” and “regularly” were swapped for definite deadlines like “annually” or “quarterly” where appropriate. A statement released by the newly formed council said the revisions were the result of feedback from vendors, merchants and payment processors.

Accepting annual payments is often a difficult thing to do with a true merchant account. Most merchant account providers will not accept merchant who accept annual payments. In fact, they typically will not accept semi-annual or quarterly payments as well. This includes memberships and subscriptions. Why? Because the potential for chargebacks is increased for these kinds transactions. This goes for any goods or services that cannot be delivered or services that last more then 30 days.

If you have an annual payment, be sure to let your processor know during the application process. Don’t let them discover this after your account has been established. This could result in your account being closed and your funds being held for up to six months after the annual payment is due to end.

Businesses that accept low ticket annual payments (under $50 per year) have a greater chance of being approved for their merchant account as lower ticket sales tend to have less chargebacks. This is usually a result of customers who figure it is just not worth the effort.

As we saw in New Merchants Part I: Check Your Statements a merchant has responsibilities when establishing their new merchant account. Another one, an important one at that, is to verify that you are receiving your deposits.

Typically, whenever you receive payment via credit card you will receive payment with three business days (Visa and MasterCard take only two business days. American Express and Discover Card take up to three business days). If you do not see your funds for those transactions, called batches, deposited within your checking account within that time frame you will need to do some research as to why this has occurred.

Your first step is to call the customer support department of your processing bank. Be sure to have information pertaining to your batches handy as it will assist them in assisting you. Be ready to explain to them that you have deposits that appear to be missing and you would like them to investigate it for you. Using the information about your batches that you provide they will be able to see what the status of those deposits are. Typically a delay in deposits is a result in batches not being settled properly. Naturally the sooner you catch this the sooner you get your funds and the sooner you learn how to use your merchant account properly.

The other possible cause for deposits being late is incorrect checking account information. Often times the voided check used to connect your merchant account to your checking account is faxed. Sometimes it might be faxed more then once on its way to the proper employee who will process it. Numbers can get smudged or otherwise difficult to read and an incorrect routing number or account number is entered into your account. Sometimes it’s just a result of human error. In cases like this catching it early is important as rejected ACH deposits can take weeks to be corrected. Businesses with tight margins or little working capital often cannot wait weeks for those deposits as they need those funds to purchase new inventory or pay vendors.

So what’s the best way to ensure this does affect your business? Immediately upon learning your merchant account has been established process a transaction for $1 using your personal credit card. Immediately batch that transaction. If you do not see that transaction deposited in your bank account in the correct amount of time, follow the instructions above. It’s better to go looking for that $1 transaction then an entire weekends’ worth of sales. If you do see that $1 transaction deposited into your account, you can safely assume all future deposits will be successful as well although you should still monitor your deposits anyway as a good business practice. You should also do this for American Express and Discover Card as well as they may have problems even if Visa and MasterCard don’t. If you do experience problems with Visa and MasterCard definitely test these two cards as well as the chance of them experiencing the same problem is very high.