Adding E-Commerce Functionality to Websites
I have had many consultations with clients who have a product that they want to start selling on their website, but most are unsure where to start. Should they use Paypal or Google Wallet? What is a Payment Gateway? Do I need a SSL certificate? Do I want customers to purchase products directly on my website?
The good news is there are only a few options to choose from. But the answer is never simple. It depends on varying factors such as budget, products, shipping, etc… Hopefully, I can break down the different options for you and you can better determine which option is best for you.
Let’s take a closer look at the e-commerce options that are available and the strengths and weaknesses of each:
Direct Invoice (Paypal and Google Wallet)
Using a direct invoicing system, like Paypal or Google Wallet, allows you to quickly integrate a payment option on your website. The setup requires that you log in to your Paypal or Google Wallet account and create an invoice. Paypal will then provide you with a code to add to your website, acting as a checkout button. When the customer clicks on the button, they are immediately taken to Paypal’s secure website to checkout and pay the invoice. Paypal takes a transaction fee (approx. 2.9%) for each charge and once the charge is approved and processed, Paypal deposits the balance directly into your business checking account. While this process is the quick and easy way to take payments, it has two important limitations. 1.) You need to create invoices with fixed amounts, so it is not flexible (as opposed to adding a shopping cart where customers can add and remove products). 2.) Customers are taken away from your website for Paypal to be able to process the payment. Some companies don’t want customers leaving their website to checkout; it may be confusing and/or not as convenient for the customer, and for branding sake it is always best to process transactions directly on your website. Using a direct invoicing service like Paypal or Google Wallet is best for selling services (Editing, Training, Consulting) or individual products (E-books).
- Easy to configure and setup
- One transaction fee (~3%)
- Quick implementation
- Can’t process payments directly on your website
- Must create fixed amount invoices
If you’re setting up an online store to sell a variety of goods, then Payment Gateways and Merchant accounts are best for you. Read on . . .
Integrating a Payment Gateway into your website will allow you to have full control over processing payments directly on your website. It requires three steps:
- Opening a Payment Gateway Account (Authorize.Net)
- Opening an Internet Merchant Account
- Purchasing a SSL certificate
This option most likely requires you to get the help from a website designer or developer in order to implement the gateway, so I will only go over the basics of what you need to know about each; integrating them directly onto your website is another article completely.
The Payment Gateway provides the infrastructure which allows your site to securely transmit transaction data. There is a setup fee, a monthly fee, and a transaction fee that are required for this type of account. (For example, Authorize.net charges a setup fee of $99 for new accounts, a $20 monthly fee, and a $.10 transaction fee). The internet merchant account allows the funds to be processed and transferred to your bank account. (If you’re a small business, you might already have a merchant account with your bank, such as Chase or Wells Fargo). The final piece is the SSL certificate. SSL stands for secure socket layer and offers a secure connection between the web page and the server. This is purchased through your hosting provider and typically costs about $40-$50 per year.
Payment gateways are best used for online stores selling multiple products. The setup process is more costly and complex, but it provides full flexibility for processing payments directly on your website, giving the customer a clear and direct way to checkout easily.
The best option for you and your small business really depends on what you are selling, in what quantities, and how you’re shipping.
Full Stack Payments
One last option to use is service like Stripe. Stripe allows you to process credit card payments directly on your website without a merchant account or payment gateway. Stripe takes a transaction fee, but the customer can checkout without leaving your website. The limitation is that you are still forced to create fixed charge amounts. I haven’t used a service like Stripe yet, but the ability to process charges directly on your website without the complexity of having a payment gateway, merchant account, and SSL certificate is appealing.
If you have any questions about setting up e-commerce capability on your website, feel free to contact us via our contact form.
Until Next Time,