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To establish what needs to be done before applying for your merchant account, let's run through a sample eCommerce site. Your customer arrives at your site, and is invited to browse a database of items. Product descriptions, pictures , and prices are all displayed to the customer by the database driven eCommerce software. They pick and choose from a variety of products and these are placed into their 'shopping basket'.
Now the user clicks on the Checkout button. Having decided to purchase their chosen items, the user fills out a delivery and payment form, handing over their credit card details, address, and other relevant information.
Where do things go from here?
This is the point where different systems/methods can be used. If you're using an online authorization company who provides a secure server for your orders to be sent to, then once the user submits their payment details, it will go to the processors secure Web site, they will pass through the instruction to debit the card, and e-mail you the rest of the details (delivery address, product choices, etc.).
On the other hand, if you run your own secure server, the details will be sent to your own server. Then, depending on the setup, forwarded onto your credit card processor via programs installed on your server, or stored on the server for you to send, or process, manually.
Most Merchant Account Providers can provide you with equipment and software to allow you to process all credit card orders yourself, saving you from paying an online credit card processor to do it. However, this means you will have to provide the secure server for accepting the credit card information, and then you'll have to take each order and run it through your software or credit card terminal. Using an online credit card processor simplifies matters by sending the details straight to them, and they process the orders automatically.
After Processing
After you, or your online authorization company have processed the card, the customer's card will be debited, and your Merchant Account credited within usually a couple of days. The Merchant Account Provider will also take a commission of approximately 5% per transaction.
Once you have the details of the order, the products selected and the delivery address, you must take action straight away and e-mail your customer a digital invoice, or at least a confirmation of the order. Many eCommerce software packages will deal with this for you, so there shouldn't be a need to worry.
You will want to arrange dispatch of the product promptly, to reduce the risk of “charge backs” when people become dissatisfied with waiting for their orders. Charge backs cost you money, and won't put you in good favor with your Merchant Account Provider.
Linking your Credit Card Processor with your Merchant Account
If you opt to use an online credit card processor in conjunction with your eCommerce software, you will need to supply the credit card processor with details to link transactions to your merchant account. When you get a merchant account, you will be provided with a eCommerce merchant account number, which you can supply to the credit card processor. When a transaction comes through on your account, it merely delivers the money (minus commission) to the specified merchant account.
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