[thelist] Explaining Payment Processing

Maximillian Schwanekamp lists at neptunewebworks.com
Wed Jun 22 11:52:52 CDT 2005

Joshua Olson wrote:
> Hi List,
> I'm preparing to write a document explaining the nuts and bolts of Payment
> Processing for the typical client. 

Great idea!  I hope you'll be posting it publicly when you're done.

 Here's the outline that I've created to
> guide my document.  Would anybody mind commenting on changes to it before I
> begin?
> What is Payment Processing?
> 	Defined
> 	Role in E-Commerce
> 	Other Role in Websites
> 	Key Components (Merchant Account, Gateway, Client Interface)

Somewhere in this bunch you might have an example illustrating how the
components work together.  A lot of people don't have a clue how the
components interact, even after being told what they are.

> What is a Merchant Account?
> 	Explanation
> 	Bank vs. 3rd Party
> 	Storefront vs. Internet Payments

I think some common requirements for obtaining merchant account would be
good here, a description of a "typical" merchant account and fees
associated with it.

> What is a Gateway?
> 	Need for Gateway
> 	Key players (Authorize.net, LinkPoint, etc)
> 	Skipping a Gateway (Nova, etc)

That list is likely to be quite long.  It's amazing how many "key
players" there are.  This might also be a good section to address how
merchant accounts work for non-US folk.  Also, you never actually "skip"
the gateway; it's just that some companies offer both gateway and
merchant account in one package (e.g. Nova with their viaKlix), whereas
others do not.

> Payment Processing Alternatives
> 	PayPal
> 	Print and Mail/Fax Forms

Along with PayPal, you might include in this part ClickBank, 2Checkout
and the like - the ones where the processing happens on the gateway's
site rather than under-the-hood on your own.

Like Marc, I suggest you internationalize your document, especially if
you'll be posting this publicly.  I'm not sure where you'd put it, but
you might want to address the issues around currency conversion and
pros/cons of selling globally (esp for downloadable products).

Maximillian Von Schwanekamp

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