eCommerce for Your WordPress Site

This month’s Austin WordPress sessions for beginners — An  Introduction to eCommerce — understanding the basics of adding eCommerce to your WordPress site.
WordPress Developer and Trainer, Nick Batik will reviewed the eCommerce process — SSLs, shopping carts, merchant accounts, and what else you need to know before, and after, you install an eCommerce solution.
This was focused on eCommerce at a beginner’s level  — how to accept  donations for your non-profit, selling digital download products,  as well as some tools and processes to set up an online store.
Nick discussed discuss payment gateways, the most popular eCommerce plugins plugins, and some common issues new eCommerce site owners face. The business principles required to be successful IRL (in real life) are still applicable when developing an eCommerce business model —  you need products to sell, a place to sell them, and a marketing strategy to attract customers. Additionally, you’ll also need a strategy for actually delivering the goods you sell.
WordPress and eCommerce – How it works

There are five major components of eCommerce:
•    Merchant Account
•    Shopping System
•    Payment Gateway (for real-time-processing)
•    Hosting Service
•    Security System

Before you chose your WordPress eCommerce plugin you need to decide how you are going to process orders and how you are going to accept payments.

Processing orders.
•    Simple non-secure order form sent to your email.
•    Secure order form sent to your email.
•    Shopping Cart System with database (Recommended)
•    Using a 3rd party Shopping Cart Service. (NOT RECOMMENDED)

Accepting Payments
•    Checks, COD’s and Bank Drafts only. (Don’t expect a lot of orders)
•    Manual Credit Card processing.
•    Real Time Credit Card Authorizations (Recommended)
•    Third Party Merchant Account (e.g PayPal / Googlr Checkout)

Depending on what you decide, you are going to need different tools to set up your Order Processing and Payment System.

1. The Merchant Account
Unless you choose to go through a third party solution like PayPal, Google Checkout or ClickBank, the first step in setting up eCommerce requires a Merchant Account. Some third party options can require a larger percentage of your sales to process your orders for you. PayPal and Google Checkout are the least expansive of all the third party options.

A merchant account is an account that enables merchants to accept credit card payments. They can be obtained through a bank, a credit card company or other payment processor. Any merchant who wants to take credit card orders must establish a merchant account.

A merchant account is established under an agreement between an acceptor and a merchant bank for the settlement of payment card transactions. In some cases a payment processor, independent sales organiza- tion, or merchant service provider is also a party to the merchant agreement. When a merchant enters into a merchant agreement directly with a bank or through an aggregator, the agreement contractually binds the merchant to obey the operating regulations established by the card associations.

Internet merchant accounts tend to charge a higher transaction rate and are used when credit cards can- not be physically swiped. Merchants with internet merchant accounts use a payment gateway to process credit card payments. On WordPress sites, these payment gateways can are now included with most shopping cart plugins.
It is important to choose the right type of merchant account and payment processor for the kind of busi- ness you will be conducting. While there are many payment service providers out there, it’s a good idea to read their terms of service very carefully, as many of them charge exorbitant fees and have strict rules regarding transactions. If anything sounds questionable, ask for specifics and do some research before agreeing to, or signing anything.
A merchant account comes with a merchant identification number. This number is required by gateway systems such as Authorize.net.

2. The Shopping System
If you are selling just one or two items on your site you won’t have much need for a shopping cart. A WordPress site with a variety of products should use the shopping cart system because it’s the easiest way for your customers to shop. The easier it is to shop, the more they will spend while scanning through your website. But how do shopping carts work with your merchant account and the all-important pay-ment gateway system?

Using a shopping cart plugin, as soon as the customer hits the submit button, your incoming orders can be automatically processed. But to facilitate this procedure, you will need “real time” processing with a gateway account. Automated processing frees you to focus on your core business — fulfilling the customer’s order.
There are many choices when selecting a WordPress Shopping Cart but some of the most important should be functionality, does it do what you need it to do, easily and is compatible with the other site plugins.

We have installed and configured both WP e-commerce http://wordpress.org/extend/plugins/ wp-e-commerce/ and woocommerce http://wordpress.org/extend/plugins/woocommerce/ and can recommend either for specific install requirements.

3. SSL Certificate
A SSL Site Certificate provides security for the credit card information from the user’s browser through your website and then into the Gateway.

Although some Hosting providers offer SSL Certificates, we suggest you purchase a site certificate in order to keep the SSL with-in your domain.

Once you have a SSL Certificates you will mote the addition of the “s” on the end of https in tour URL. This addition is usually one way to insure the page is secured. The other way is the indication of a Lock in
the lower part of your browser which will look something like this    .
A site certificate usually ranges from USD $33.00 to $800.00 depending on the vendor and level of se-curity and must be renewed every year. Certificates can be purchased from companies like GeoTrust, VeriSign and a handful of others. Please note; a Secure Socket Layer (SSL) is not an absolute requirement since everything will work without it, however many people will not purchase from websites that do not have SSL. You also run the risk of data-jacking if you do not have a Site Certificate installed, data-jacking is when a hacker actually intercepts the data while it is being transferred.

4. Gateway Account
We mentioned the Gateway many times in the above article and here’s how it works. Once the user sends his order it is transferred from his machine (or more specifically, his browser) to the Shopping Cart and is protected by the Secure Socket Layer (SSL), the server then hands off the data to the Payment Gateway. Gateways are services like Authorize.netTM, CyberCashTM, iBillTM and a host of others and is the actual link between your website and the banking networks. These services usually offer both the Gateway and the Processor.

The Gateway is simply the door into the ATM banking network, and the Processor is what actually handles the Financial data and must be able to communicate with your Shopping Cart. The processor accepts the data from the shop-cart and brings it in to the ATM network, where it is now just like any other credit card transaction.
Once in the ATM network, it connects to the Customers Credit Card Issuer, it then submits the data and waits for a Yes or No answer as to whether the transaction is approved or declined. After this, the whole process starts again in reverse order to give the user feedback as to the status of their transaction.

If the order is accepted, it will then charge the order amount to the customer’s account and sends the Gateway an authorization code. The Customers Bank will then settle the remainder of the transaction at a later time when they do their batch settlement processing, this is usually at the end of each business day. But for now, the user has his authorization and you have your order.

When the bank performs it settlements, the sale amount will then be deposit into your bank account, minus any fees that that may apply to the sale. For this reason, the funds may not show up in your ac- count for 24 – 48 hours after the actually sale has been completed. All that is required of you, is to fulfill the customer’s order
.
Payment Diagram
1.    Consumer places an order with the merchant through any number of sales channels: Web Site, Call Center, Retail, Wireless or Broadband.

2.    Authorize.Net detects an order has been placed, securely encrypts and forwards the Authorization Request to the Consumer’s Credit Card Issuer to verify the consumer’s credit card account and funds availability.

3.    The Authorization (or Decline) Response is returned via Authorize.Net to the Merchant. Round trip this process averages less than 3 seconds.

4.    Upon approval, the Merchant fulfills the consumer’s order.

5.    Authorize.Net sends the settlement request to the Merchant Account Provider.

6.    The Merchant Account Provider deposits transaction funds into the Merchant’s Checking Account.

Overview

The Shopping Cart keeps track of the user’s order while they are shopping. When they are done and are ready to pay for their merchandise, they submit their order. Once they submit their order it is handed to the Shopping Cart secured by the SSL and sent to the Gateway for Processing. As you can see the Shop- ping Cart plugin is only a small piece of the puzzle.

eCommerce can appear simple once you understand how all the components work together. A merchant account allows you to accept credit cards, your hosting company shows your website to the world, your shopping cart helps your customers shop and order more easily, the SSL certificate protects your user’s financial data and your liability and the Gateway allows real-time processing. All these independent components work together to make task of selling products easier and more profitable.

Nick’s Slide Deck, which includes the links discussed can be accessed here:
http://presentations.handsonwp.com/category/a-beginners-guide-to-wordpress-ecommerce/