Commercial shopping carts usually offer the online customer a number of options. An Internet merchant usually chooses the shopping cart and web site hosting company. Then the merchant sets up a merchant account based upon the gateways that are available with that particular shopping cart. This differs from purchases at a brick-and-mortar store because usually, Internet merchant accounts do not hold funds for an extended length of time, as does a typical bank account. Instead, transactions are usually immediate and take place daily.

These shopping cart programs collect the customer’s order information and send it to the credit card processing company to process. The credit card processor then sends it directly to the credit card company, which validates the card and the account. The credit card company then let the credit card processor know that the appropriate amount can be transferred. If a transaction is denied, it is assessed a code that alerts a credit card processor that the transaction has been denied and the reason for the denial.

Once the transaction has been approved, this information is sent to the shopping cart program. This alerts the customer that the order is accepted or denied and that the order is processed for delivery. The credit card processor then passes on what is known as a “settlement request,” or request for funds to be deposited into the merchant’s bank account. The Internet merchant account gathers the funds for a certain amount of time, such as 24 hours, and then transfers monies to the merchant’s bank account, minus any fees it charges. This completes the process.

Your shopping cart is an integral part of your e-commerce website so it is very important to consider the many options available to you. There are two primary types of shopping carts available, either hosted or licensed, and you should decide on the type that is right for you and your business needs.

Licensed shopping carts are purchased and then completely owned and maintained by you. Most licensed shopping carts are available for a small charge, but there are some offered for free download as well. Once the shopping cart has been paid for and downloaded, it is then installed on your web server. This type of cart offers much more flexibility and control than a hosted shopping cart, but requires a more advanced skill level and can be time consuming.

With a licensed shopping cart, you can customize your cart to suit your business and your clients, but the installation, maintenance, and security of the shopping cart is solely your responsibility. You will need a general knowledge of computer languages and internet security to successfully implement a licensed shopping cart into your website.

The other option, a hosted shopping cart, is much less worrisome and requires very little effort on your part, but it is a continuous expense and must be a well-researched decision. Hosted shopping carts are Application Service Models that are integrated into the web server. There are a variety of hosts that offer this service, typically at a monthly or annual rate. Some hosted shopping carts also charge a commission fee based on a percentage of your sales.

It is important to carefully read the terms and conditions before deciding on a hosted shopping cart provider. Look for a company that provides a merchant account, as well as a payment gateway, and review all the possible fees and charges. Also read the company’s privacy policy because some hosts have been known to sell their clients’ personal data to spammers.

Hosted shopping carts aren’t as versatile as licensed carts, but most offer a selection of designs and options to choose from to make your cart more personal. Your host will maintain your shopping cart, keeping it updated and secure, leaving you more time to concentrate on your business and your customers.

Both types of shopping carts are commonly used in e-businesses everywhere. Deciding on the type that is right for you will depend on your level of knowledge and the amount of time you want to put into your shopping cart. You should also consider the cost and how specific your needs will be.