Notes On Payment Systems

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5.14 Payment Systems
The more cautious companies take themselves online in stages.
1. A start is a simple online catalog, from which customers can order by telephone or email. The personal contact fosters confidence, and customers can check product details with a knowledgeable salesperson. 2. Then may come a website with page information automatically supplied from a linked database, ensuring that stocks, prices and specifications remain up to date.
3. Only with online payment does ecommerce proper arrive, and even then there are sub-stages which companies may pass through.
a. Rather than process credit cards in realtime, emerchants will commonly take payment by one or more of these approaches: 1. Online checks. 2. Wallet
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Because information is collected off the merchant's website, however, it can be difficult to source customer information on purchases, even sufficient to identify individual charge-backs. Data integration, marketing and planning therefore suffer.
2. An API (application programming interface: software) running on the server hosting the merchant's website. This is the more expensive option but overcomes the previous limitations. Such software is usually specific to the type of server concerned, however, and requires considerable programing expertise to install (plus permission from the hosting company: normally only allowed on a dedicated server).
MAPs and Credit Card Processors
Merchant accounts are provided by Merchant Account Providers (MAPs). These may be acquiring banks, Independent Sales Organizations, or the ISP company hosting your website. To add to the confusion, Credit Card Processors may also be called MAPs, though their role is actually limited to processing the credit cards associated with merchant accounts. Like ISOs, CCPs supply software (payment gateways) and sometimes the hardware to physically process the cards. An ISO account will normally come with its own Credit Card Processor, but you may have some choice if your business bank provides the merchant account.
Mechanics of Merchant Accounts Suppose you've found a MAP to give you a merchant account. What needs to be done before signing the contract? You should:
1. Make sure you understand