I want to accept credit cards at my website, but
I don't want to pay for a merchant account. Where can I
find inexpensive credit card processing on a secure
server?
You'll probably have to get a merchant credit card
account AND credit card processing on a secure server.
Here's how it works.
- You secure a merchant account with a bank, and
the bank contracts with a firm that processes
credit card transactions for them.
- You contract with a web hosting service for a
secure server for your order pages.
- You contract with a payment gateway company that
provides an Internet bridge from your order pages
to the bank's processing company.
Sometimes, however, you can find a service that
combines (2) and (3) together. While it is possible to
pay a company to handle the merchant credit card
transactions for you, they may take an 8% to 15% chunk of
the total transaction, and in some places this kind of
"factoring" is illegal. If you plan to sell
much over the Web, secure your own merchant account.
Start with your own bank. If they don't favor Internet
businesses, try Wells Fargo Bank
(http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://wellsfargo.com/biz/products/merchant/merchant.jhtml
), Heartland Payment Systems
(http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://www.heartlandpaymentsystems.com/
), or First Bank of Beverly Hills
(http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://www.fbbh.com
).
Independent sales organizations may promise to get you
a merchant account, but be careful of high commissions
("application fees"), hidden fees, or penalties
if your business folds before their "lease
period" is over. Be careful you aren't sold the
wrong services for your needs. Shop carefully.
How should we protect identifiable information about
us?
Computer technologies enable sellers to find out more
about their customers while at the same time they enable
buyers to search and receive product information. The
balance is certainly in favor of sellers since product
information are proprietary, implying they are offered
only if sellers want to. On the other hand, information
about online consumers seems to flow easily to sellers if
technologies are not employed to block such transfer.
Since there are sizable gains to be made from refining
consumer demand information, collecting information about
consumer preferences is widely promoted, and electronic
commerce provides a unique opportunity for this. However,
while this information is clearly helpful to the sellers
and researchers, a standard must be established to
protect consumers. Presently, simple notification and
disclosure to consumers are all that is needed for
information collectors to use such consumer information.
Rather than relying on regulatory solutions, however,
innovative concepts are being tested in electronic
commerce. One new idea is to give consumers the right to
sell their own information. As discussed in Section 8.3,
this market-based solution turns personal information
into a marketable commodity. Many online services are
offered in return for divulging personal information. In
that case, the price for that information will be equal
to the value of the service offered. Some consumers may
use the service heavily, implying a high price for their
information. Others may give out their information for a
service they seldom use, signaling a low value for their
personal information. Going beyond reporting names and
addresses, consumers may be willing to sell all types of
consumption data in the future if the price is right. In
a way, consumers will become information sellers by
participating in market research or focus groups.
Why should I care for privacy?
At least in one sense, selling personal consumption
data may be detrimental to consumer welfare. In
electronic commerce, such data will be directly linked to
purchasing and price negotiation. With demand known,
sellers may refuse to lower prices below what they think
is a consumer's valuation. However, rather than going
back to a market with imperfect demand and inferior
product quality, the market may be able to produce an
equitable and efficient result. For example, the
potentially higher sale price can be partly compensated
by a higher payment for personal information. This also
demonstrates a reason why consumer information may have
to be priced and traded in the market. A slew of economic
questions arises regarding prices and the efficiency in
such a market. Perhaps, the vigor evidenced in the debate
on privacy and anonymity among legal scholars, government
officials and free speech activists might guide
economists to this task in the future.
Is eCommerce safe?
Although Internet security breaches have gotten a lot
of press, most vendors and analysts argue that
transactions are actually less dangerous in cyberspace
than in the physical world. That's because retail sales
employees who handle card numbers cause a great deal of
credit card fraud. eCommerce systems remove temptation by
encrypting the numbers on a company's servers. For
merchants, eCommerce is actually safer than opening a
store that could be looted, burned, or flooded. The
difficulty is in getting a customer to believe that
ecommerce is safe for them. Consumers don't really
believe it yet, but experts say eCommerce transactions
are safer than ordinary credit card purchases. Every time
you pay with a credit card at a store, in a restaurant,
or over an 800 number - and every time you throw away a
credit card receipt-you make yourself vulnerable to
fraud. But ever since the 2.0 versions of Netscape
Navigator and Microsoft Internet Explorer, transactions
can be encrypted using Secure Sockets Layer (SSL), a
protocol that creates a secure connection to the server,
protecting the information as it travels over the
Internet. SSL uses public key encryption, one of the
strongest encryption methods around. A way to tell that a
Web site is secured by SSL is when the URL begins with
https instead of http. Browser makers and credit card
companies are promoting an additional security standard
called Secure Electronic Transactions (SET). SET encodes
the credit card numbers that sit on vendors' servers so
that only banks and credit card companies can read the
numbers. No eCommerce system can guarantee 100-percent
protection for your credit card, but you're less likely
to get your pocket picked online than in a real store.
What should be in a copyright statement on the
website I've created?
I can give general advice, but consult your attorney
about your country's specific copyright laws. By US law,
an article is protected by copyright when it is
published, whether or not you list copyright information.
You can register your documents with the Library of
Congress, though few do this for websites. The following
statement should be adequate for most purposes:
"Copyright © 2000, by John B. Doe. All rights
reserved." The primary purpose of your copyright
statement is to put readers on notice that this is your
property. Since websites are so easy to copy, I usually
go further and say, "Text, graphics, and HTML code
are protected by US and International Copyright Laws, and
may not be copied, reprinted, published, translated,
hosted, or otherwise distributed by any means without
explicit permission." It's difficult to enforce your
copyright in court -- the legal costs would be excessive.
However, it's usually sufficient to send violators a
stiff note demanding that they remove your copyrighted
documents from their site immediately. If they don't,
contact their web hosting service. For a hosting service
to knowingly host stolen materials saddles them with
legal liability. Few are willing to risk it, so they
usually force their subscribers to remove the offending
materials immediately. More at
http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://wilsonweb.com/webmarket/law.htm
I am interested in federal government procurement
with respect to becoming a vendor for the agencies that
use Electronic Commerce to conduct business. Where can I
find more information?
Vendors interested in providing products or services
to the federal government should learn more about the
General Services Administration's Federal Supply
Schedule. Under the schedules program, GSA enters into
contracts with commercial firms to provide supplies and
services at stated prices for given periods of time.
Orders are placed directly with the schedule contractor,
and deliveries are made directly to the customer. To
learn more, visit
http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://pub.fss.gsa.gov/sched/
What is Electronic Data Interchange (EDI)?
Electronic Data Interchange (EDI) is the
computer-to-computer exchange of business information by
means of standardized transaction sets that have been
developed and used over the years in the private sector.
Through the use of EDI, transactions can be completed
more cheaply and accurately than is possible through the
exchange of paper documents.
What are the Benefits of Using EDI?
Doing business electronically can result in many
benefits for your organization, including enhanced
strategic relationships, reduced purchase prices and
procurement costs, better customer service, shorter lead
times and lower inventory levels. By automating
communications between your organization and your trading
partners, electronic data interchange (EDI) can help you
realize these benefits and position your company for a
competitive advantage. The benefits of EDI fall into two
categories: (1) tactical, enabling your organization to
cut operating costs and increase efficiency; and (2)
strategic, putting distance between your organization and
the competition. Specific tactical benefits, which can
arise from the successful implementation of EDI, include:
Reduced purchase prices, procurement and inventory costs
Delivery of documents in seconds instead of days with far
less likelihood of them getting lost or damaged, thus
improving customer service and reducing postage and
express delivery service costs Shortened order lead times
while eliminating clerical tasks and possible keying
errors The ability to electronically send invoice and
receive financial transactions such as invoices and
payments directly to and from your organization's
accounting system A broad choice of system
configurations, from PC-based to mainframe-based systems
customization of forms to meet your needs and the needs
of your trading partners Communication across industry
sectors with one common standard The ability to
electronically communicate with thousands of companies
without concern for hardware compatibility complete
auditing, billing and security functions. Strategic
benefits stem from: The ability to serve customers
better, which for private sector firms can raise the
value of their products or services and help increase
market share. Government agencies can increase the
effectiveness of customer service within current
budgetary limitations The capability to track market
trends as they develop, leading to focused, more
responsive market strategies for private firms and the
ability for governments to anticipate future constituent
needs or take advantage of efficiency or cost reduction
opportunities.
How do we successfully implement EDI in our company?
Executive commitment is the most important factor in
determining the success of an EDI program. By its very
nature, EDI can change the way an organization does
business. To enable such beneficial changes the executive
driving a company's EDI program must build a common
understanding regarding EDI among all affected
departments, divisions and other organizational units. An
EDI implementation consists of an internal and an
external phase. During the internal phase, your
organization selects and implements the necessary
translation and communications software and services,
accomplishes the appropriate applications integration and
determines what procedures and guidelines are needed to
support electronic business practices. The external phase
involves motivating your trading partners to participate
in your program. Although the number of companies using
EDI is constantly growing, you may still have to sell EDI
to your trading partners. Moreover, you will need to
coordinate your program with those of your trading
partners, agree on EDI terms and conditions and test your
systems. In selecting an EDI VAN and translation
software, you should consider the requirements of both
phases. Your EDI vendor not only should be able to
provide solutions for your internal EDI implementation,
but also should be able to support your trading partner
enabling/implementation efforts.
What is the Central Contractor Registration (CCR)?
The CCR is a central database with information about
Department of Defense (DoD) trading partners. This allows
DoD purchasing agents, contracting officers, and
accounting officers to quickly and consistently find
information about DoD trading partners. The CCR was
created so that businesses would not have to register
with each and every DoD agency they wished to do business
with. By having their information in one central
database, trading partners need only inform the
contracting or purchasing officer that they are CCR
registered and that officer can then look out the
information they need to do business with them.
What are enabling technologies?
The electronic marketplace is where information-age
commodities (digital, knowledge-based products) are
produced, exchanged and consumed. For the market to
function, it requires substantial investments in market
infrastructure that is capable of supporting transactions
efficiently. The market infrastructure includes
telecommunications networks (telephone, cable, wireless,
etc.) that provide communication and delivery services.
Another key component is that of interface devices and
technologies such as computer hardware, software and
digital appliances. Network and computer technologies in
turn enable various EC applications and other support
services such as electronic payment systems. In this
sense, networks and computers are enabling technologies
of electronic commerce. Enabling technologies will change
and improve: messages have been delivered by person,
postal service, telephone, fax, and now by email.
Transportation and product delivery systems have been
innovated over time. Just as likely, today's Internet and
computing platforms will change. But these changes will
not affect the fundamental nature of the digital economy.
The electronic commerce revolution happened on the
Internet because of its advantages such as open,
distributed networking. Although technologies will
determine the boundary of what processes can be
implemented at a given time, it is the process we find
useful that will shape the future of these technologies
and the economy.
What is the convergence?
Both telecommunications networks and computer
technologies are heading toward the convergence. In
short, the convergence is a process that allows hitherto
incompatible devices to talk to each other
(interoperable), products to be interchangeable and
processes to be integrated. The underlying impetus for
convergence is the digital technologies or digitization;
its effect is much wider than a simple network
convergence we are aware of today. Product Convergence
Today, digital products include voice signals, TV
programs, musical CDs, videos, books, magazines, news and
all types of paper-based information, database, computer
software and games. Room and access keys are digital,
stored on a smart card; IDs and personal information are
digital; and money is digital. All these digital products
are essentially made up of ones and zeros (the on-and-off
dual states of an electronic charge), capable of being
transported via a telecommunications network. Network
(Infrastructure) Convergence Telephone, coaxial cable,
broadcast, satellite and wireless networks are all
capable of sending and receiving the same digital
signals. When a telephone network is busy, one can
re-direct the voice to cable or wireless networks. Market
Convergence Suddenly, several regulated monopolies are
facing potential competition from those who used to be in
different markets: telephone companies and cable TV
operators are potential competitors. Internet service
providers and TV broadcasters may be fighting for
Internet access. The convergence in products and networks
has resulted in breaking down old market boundaries, in
addition to lowering geographical market boundaries. (Of
course, this potential competition will become real only
if these firms do indeed compete. Another type of
convergence, i.e. mergers, or artificial market
boundaries will sustain monopoly status.) Process
Convergence We use process convergence in the sense of
integration where different processes (or phases in a
value chain) are integrated into a seamless process. For
example, online advertising gets an immediate feedback
from its recipients, which is then used to modify
production process (customization). In broadcasting,
advertising is almost separated from market research or
any other business processes. The convergence brings
about new opportunities as well as uncertainties. As
products are digitized, they acquire new characteristics
increasing their appeal. For example, a CD-ROM version of
an encyclopedia provides search and link capabilities far
exceeding the cross-indexing features provided by book
versions. New products mean new uses, new customers and
new ways of doing business. Many focus on the opportunity
to expand their business, but the novelty also creates
uncertainty. For example, as the telecommunications
infrastructure converges, traditional boundaries among
telephone companies, cable operators and satellite
operators become unclear. These companies are
experimenting video-on-demand services, interactive
television, cable modems, online shopping, video
dialtone, etc., to gage consumer response and the future
profitability in their widening playing field. Not
knowing consumer demand and competitors' strategies,
however, they are hesitant to plunge into the unknown. On
the other hand, Bill Gates of Microsoft, Craig McCaw, who
founded McCaw Cellular Communications, and other
investors are willing to take a risk in the future of
converging infrastructure. Their enterprise is called
Teledesic Corp., which will invest almost $10 billion to
place 840 low earth-orbiting satellites around the earth.
The plan is to offer broadband connection, broadcasting,
video conferencing and other telecommunications services
worldwide through its satellite network. The project's
possible payoffs may be as large as the size of necessary
investments.
Is the government going to regulate eCommerce?
Last year, the Senate overwhelmingly approved the
Internet Tax Freedom Act, which imposed a three-year
moratorium on new Internet taxes. This act bars state or
local governments from imposing new taxes on access to
the Internet and data flowing over the Internet, as well
as prohibits any new eCommerce taxes. Local legislators
are the ones chopping at the bit to get a cut of the
eCommerce action, and they are not all waiting for the
end of the three-year moratorium. The National
Association of Counties recently unanimously approved a
resolution asking Congress to impose a sales tax on all
online purchases. Local governments estimate that $5
billion annually are already lost to out-of-state mail
order business, and with the rapid rise of ecommerce,
this number will only increase. While there have been
some rumblings of impatience in Congress, the federal
government is urging local and state officials to respect
the Internet Tax Freedom Act's ban. It is very likely
that when the moratorium expires, the taxation situation
will be in for some changes. There is an advisory
committee already meeting to work on post-moratorium
issues, and many ideas are being discussed. The Advisory
Committee on Electronic Commerce was mandated by the
Internet Tax Freedom Act, and it will consider such
topics as a flat national Internet tax and ways to
simplify sales tax for online purchases. While the feds
favor no additional taxes for now, state governments are
grappling with the issue individually. Texas taxes not
only Internet access charges, but also all the money
collected when content providers sell online
subscriptions, as well as the fees charged by Web
developers for building sites. On the other hand, New
York decreed that Internet access charges are not subject
to state sales or telecommunications taxes. Currently
nine states tax Internet services, and six states,
including California, have moratoriums on Internet taxes.
Most states still don't know what to do, according to the
accounting and consulting firm Deloitte & Touche,
which published a comprehensive guide called
"Taxation in Cyberspace." For now, eCommerce
providers such as AT&T are treating Web purchases
much like mail-order sales. The providers collect taxes
if the merchant has a significant presence in the state
where the buyer resides. "There are lots of gray
areas," acknowledges James Kwock, a Web services
marketing director with AT&T Networked Commerce
Service, "but I don't feel any pressure from tax
lawyers yet." There's another problem with Net
taxes: the Internet crosses international borders as
easily as it skips over state lines. Japan agrees, but
other countries have already indicated a willingness to
regulate the Net. For example, France has long tried to
mandate the use of French on Web sites, while Germany has
attempted to stamp out both pornography and neo-Nazi
materials online, and Australia has regulated pornography
as well. Getting international agreement on Net taxes may
be the biggest hurdle to overcome.
Are there any technology standards for eCommerce?
In addition to the alphabet soup of standards that
governs the Internet, eCommerce employs several of its
own standards, most of which apply to
business-to-business transactions. Electronic Data
Interchange (EDI): Created by the government in the early
1970s and now used by 95 percent of Fortune 1,000
companies, EDI is a common document structure designed to
let large organizations transmit information over private
networks. EDI is now finding a role on corporate Web
sites as well. Open Buying on the Internet (OBI): This
standard, created by the Internet Purchasing Roundtable,
is supposed to ensure that all the different eCommerce
systems can talk to one another. OBI, which was released
by the OBI Consortium, is backed by leading technology
companies such as Actra, InteliSys, Microsoft, Open
Market, and Oracle. The Open Trading Protocol (OTP): OTP
is intended to standardize a variety of payment-related
activities, including purchase agreements, receipts for
purchases, and payments. It was created as a competing
standard to OBI by a group of companies, including
AT&T, CyberCash, Hitachi, IBM, Oracle, Sun
Microsystems, and British Telecom. The Open Profiling
Standard (OPS): A standard backed by Microsoft and
Firefly, OPS lets users create a personal profile of
preferences and interests that they want to share with
merchants. The idea behind it is to help consumers
protect their privacy without banning online collection
of marketing information. Secure Sockets Layer (SSL):
This protocol is designed to create a secure connection
to the server. SSL uses public key encryption, one of the
strongest encryption methods around, to protect data as
it travels over the Internet. SSL was created by Netscape
but has now been published in the public domain. Secure
Electronic Transactions (SET): SET encodes the credit
card numbers stored on merchants' servers. This standard,
created by Visa and MasterCard, enjoys wide support in
the banking community. The first SET-enabled commerce is
already being tested in Asia. Trustee: This partnership
of companies seeks to build public trust in eCommerce by
putting a Good Housekeeping-style seal of approval on
sites that don't violate consumer privacy.
I own a new online company and what we need right now
is exposure. I was wondering if there are any advertising
resources available to me that are free or very
inexpensive?
As small business people know, free and inexpensive
really mean a lot of sweat equity, but there are several
things you can do at low or no cost to promote your
online business. Prepare your web pages to be search
engine friendly, and then submit them to the main search
engines and Yahoo's directory . Find other sites that are
complementary to yours and attract the kind of visitors
you're looking for and ask the siteowners for a
reciprocal link. Join a banner exchange program where you
show two banners on your site for every one of yours
shown on other member's sites. The largest of these is
Microsoft Banner Advertising. In addition you could send
out press releases about a newsworthy event on your site,
offer interesting and free content related to what you
sell, and try some inexpensive text ads in e-mail
newsletters that appeal to the kind of visitors you want.
But make sure you conserve all the marketing efforts
you've begun by asking visitors to bookmark your site and
subscribe to your free e-mail newsletter so you can
contact them again. You can set up a newsletter using the
free tools offered by YahooGroups or Topica.
Our crafters site reaches a highly targeted niche
audience, with monthly traffic is between 400,000 and 1
million unique visitors. How can we attract the attention
of advertising firms?
I would suggest a four-step process of gearing up to
sell some serious advertising:
- Conduct a demographic survey of your visitors.
One easy-to-use tool is
http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://Zoomerang.com
that allow you to develop and use free rather
sophisticated online form. Your advertisers will
want to know who your visitors are, and what
spending power they have. Then develop an online
media kit and rate card. There's an example at
http://www.business.gov/cgi-bin/outsideurl.cgi?url=http://www.wilsonweb.com/ads/.
- Study the magazines your target audience
subscribes to, and make a list of the advertisers
who place the larger ads. They'll be your best
prospects, since they have a larger advertising
budget.
- Call each of these larger advertisers, speak to
someone in the marketing department, and find out
what advertising company handles their online
ads.
- Call the ad agencies that represent these
advertisers, ask for the media buyer who handles
the advertiser's account, and pitch your site.
Of course this is all hard work, but it will pay off
in the end with the kind of traffic you report.
|
