Internet & Ecommerce Terminology

As with any area in modern life, the Internet and ecommerce is filled with terminology that it helps to understand before you get started. We've included some of the most common terms you will come across below with brief explanations.

General Terms

Web Space

This is part of a computer you rent from a Web Hosting Company that is connected to the Internet. You can upload your web pages to this computer and people can view pages on it. When you setup some web space you would normally point a domain name at the web space to enable people to get to it easier.

FTP

FTP stands for File Transfer Protocol. It's a standard that's used to upload and download pages from your web space. You would normally install an FTP client on your computer and enter into it the domain name, username and password for your web space and then you can upload and download pages between them.

SSL

SSL stands for Secure Socket Layer. Again it's a protocol for transferring data between you and a web site. When a web site uses SSL (by using a Secure Server) data sent to and from the web space is encrypted to stop it being read in transit over the Internet.

Secure Server

A Secure Server uses an SSL certificate. It is generally a piece of web space that can only be dealt with by using SSL ensuring that data transferred between the web space and the browser is encrypted.

Ecommerce Terms

Merchant Account

An account opened with a bank that allows you to process credit/debit card payments from your customers.

Payment Gateway

An on-line system for real time charging of credit/debit cards when your customer places an order. Normally requires a merchant account.

Shopping Cart

A piece of software either installed on your local machine or on your web space used to produce a shopping system. This generally means product pages, some sort of online basket and a way for the customer to check out.

Resources: Getting Started In Ecommerce

If you are just starting to investigate the options available that enable you to sell on-line there are a number of important steps you need to go through in order to make the process easier on yourself and on your bank balance. Below we provide information on those steps in the order in which you would normally go about them. But, of course, not sticking to this order doesn't mean that you'll emerge at the other end without the system you want. In addition there's no reason to wait on the completion of one before you start the next step. This process assumes that you already have some web space but please be aware that some of the things you may want to do may not be available from your current hosting company so you may have to move your site elsewhere (this is unusual these days however).

1. Merchant Accounts

In the United Kingdom and indeed, to a certain extent, in the rest of the world, obtaining a merchant account is a time consuming step. If you're a new business you may find it difficult to obtain a merchant account at all (see point 2 below for a possible solution to this) or the procedure might takes weeks to complete (this is very usual in Europe, much less so in the United States).

But what sort of merchant account do you need? There are generally three types of merchant account on offer:

Customer Present: The customer comes into your store, you swipe their credit/debit card through a Point Of Sale machine and they sign a receipt. This isn't suitable for ecommerce.
Mail Order: You still have a Point of Sale machine but you don't have to swipe the customer's credit/debit card and you don't have to get them to sign anything. This is suitable for ecommerce but generally not for using Payment Gateways.
Internet: This is what you'll need if you want to use a payment gateway. It enables the gateway to talk to your merchant account's bank and process the payment.

In addition to all these you may want to investigate using systems such as Paypal that don't require a merchant account but require that your customers also have accounts with them.

2. How will you process - online or offline?

This point can be linked to the point above but it may also depend on what sort of merchant account you can obtain. If you can't get authorised for an Internet merchant account then using Payment Gateways simply won't be an option as they'll require one. If you can already accept credit/debit cards through a Point Of Sale machine then you might want to take the credit/debit card details on-line but process them manually and this is an option that a lot of companies stick to as they can better vet orders before they come in. There are exceptions to these though. For instance in the United Kingdom a payment gateway called Worldpay offer a "bureau" service. With this you don't need a merchant account at all and can still take credit/debit cards on-line. These services are very common in the United States. But, be warned, expect to pay a much higher percentage on your transactions and also expect to wait a much longer time before monies are deposited into your account. If you plan on taking credit/debit card details to process offline then you'll need a Secure Server in order to make sure that credit/debit card details are transmitted securely across the Internet. Alternatively you can obtain an SSL Certificate from a company such as Thawte and have that installed on your web space.

3. Which Shopping Cart?

All we can say is that you should choose a shopping cart product with a good track record, that's established and that you're comfortable with both how you produce the store and the stores it produces. With any off-the-shelf package there will be limitations and things that you might want to do may not be possible with products in your price range. And that's a worthwhile point to make - just because a product is expensive don't expect that it will be any better than other products at lower price ranges. Shopping cart software can range from 100 GBP to many thousands so choose wisely. It's also good to say not to rush in at the deep end. If you're just starting your ecommerce site let it build up, you can always change products later.