So, what’s the difference between the two?  If a merchant has single web site but sells to customers in various countries, using global shipping options such as UPS or Fedex, that is considered global ecommerce.  If a merchant is based in one country but has a country specific web site in another, and they use country specific distribution channels and logistics, country specific payment options, etc., they are engaging in cross-border ecommerce.

Amazon, for example, practices cross-border ecommerce.  They have country specific web sites, each which cater to the country-specific consumer base, including the types of products and services offered there.  Even if both the U.S. and the U.K. utilize the English language, consumer taste, product choices and vernacular are different in each country.  Amazon sells “sweaters” in the U.S. and “jumpers” in the U.K.   That is a simple example.  Even if cross-border ecommerce is desired and attainable, there are a host of other business decisions to make in that scenario.  Merchants have to consider other challenges such as the local language, local regulatory laws, taxes, distribution issues, fraud concerns, customer service, international fees, increased settlement time and payment types preferred by consumers or otherwise governed by local laws.  Since a merchant needs to stay afloat to stay in business, obviously payment and settlement issues can cause a severe impact on a merchant’s existence.

Merchants who decide to go the cross-border route also need to research, understand and offer payment options that will be attractive to consumers in each country.  While the credit card is the payment type of choice for U.S. consumers, the debit card is king in the U.K. and cash is the preferred payment method in China.  Merchants need to also understand and comply with payment regulations, as they will differ in each country.

Most U.S. merchants are accustomed to 24-72 hour settlement timeframe for card payments.  International, online payments will take longer to settle and involve additional fees.  Fees for merchants receiving international payments will vary by country, by the amount of the transaction, the type of payment method, transaction processing system and merchant processor that is used.  For example, PayPal charges 3.9% + $0.30 for transactions up to $3,000 for anyone selling to buyers outside the U.S.  Google Checkout charges a 1% fee (on top of set transaction fees) for cross-border transactions.  (Their final fees pretty much match PayPal when it all adds up.)   Fees from other merchant processors and other merchant fees will vary of course.  Currency conversion may also need to be taken into account, although buyers are traditionally charged the fees for conversion when purchasing something using a payment card issued from a bank in a different country.  Some banking networks have come together to ease the burden of global payments and processors have developed solutions that encompass things like global payment networks and fraud protection, including localized risk management and currency conversion.  In the end, solutions continue to be developed to help ease the hassles merchant have when they want to expand into the global ecommerce space.

During the decision process for global expansion into global or cross-border ecommerce, a merchant should evaluate what that leap will entail and all the options available.  If venturing into cross-border territory, they need to make sure they adhere to local laws, engage in best business practices, put proper fraud controls in place, as well as present a consumer friendly shopping environment that provides ease of use and supported customer service for any issues that may arise, paying specific attention to time zones as well.  While an ecommerce site may be available 24/7, is support available for international consumers during the off-hours in the merchant’s home country?  It may be a while before a simple solution for global payments is available. Until then, merchants should provide the payment options most desired by their potential customers – which will be different for each country specific ecommerce site they maintain.

Finally, looking at the bottom line before taking that global leap can’t be ignored.  Merchants need to decide how any fees imposed for cross-border transactions will affect their profit margin and the pricing of their products.  Even if a merchant desires a presence globally or in a specific country, the cost of conducting cross-border business may not enable the merchant to be competitive with local merchants – online or off.

In order to make sense of which option is best, merchants should take a step back and put on their consumer shoes. According to news from ABI Research, mobile e-commerce will reach roughly $119 billion in by 2015, representing about 8% of the total e-commerce market.  Merchants that don’t personally use app-enabled smart phones should go buy one.  The only way to understand what mobile consumers want from an e-commerce merchant is to see what they are seeing.   To serve consumers best, merchants should ask themselves questions such as:   What do I want to be able to see and how fast does the site load on my phone?  What do I want to be able to do on the site (search for products, update account information, etc.)?  What information (graphics) is not necessary when surfing ala mobile?  What design enhancements (Flash, etc.) are too cumbersome for mobile viewing?   On the same note, some information is key to include, like data security (if the merchant is processing credit cards in that version) and merchant contact information.  Additionally, merchants should always provide a link for mobile viewers who want to see the regular site.

At minimum, a mobile optimized site would be the first step, as it requires less customization and is available to more users.  Mobile apps require development for several platforms, keeping up with the changes in those platforms, as well as new ones that come about.  No matter what, some investment in the design will be required, with mobile apps obviously being more costly.  Large merchants like Amazon and Netflix, for example, offer mobile sites and mobile apps (maybe they can afford to do so, but more likely because these options serve their customers best and they want stay current with what mobile users want).  What a merchant decides to offer comes to down considerations such as their business model (Is a mobile app in the budget for a small merchant?); what services/products they offer (Think CNN, best served with a mobile site, versus Netflix, where customers can manage their account using a mobile app); or if the merchant wants to push information to consumers or merely wants them to have mobile access to their site.

Either way, if a merchant provides the ability for customers to manage their accounts online, customers will be more likely to purchase products and services using their mobile phone if the process is streamlined and they don’t have to enter sensitive information (i.e., credit card data), thereby eliminating some security concerns.  However, even if consumers are not purchasing goods using their mobile phone, they are doing a lot of comparison shopping.  No matter what, the only way an e-commerce merchant can compete today is if they are in the mobile game.

Here are some simple practices, although may sound like no-brainers, many merchants forget to employ, but could mean a make or break with the success of their business.

A Recognizable Billing Descriptor: This is the company name that appears on cardholder credit card or debit card (i.e. checking account) statements.  Most, if not all, merchant applications ask for the legal business name as well as the DBA (Doing Business As) name, i.e., ABC Kitchen Products.  For card not present transactions (mail/telephone order and ecommerce), the company name and customer service phone number must appear in the descriptor field.  In most cases there is a 25 character limit, not including the phone number.  By default, processors will use the DBA name for the descriptor field.  However, if a processor has the ability, this field can be customized.  If need be, merchants should choose a name for the descriptor field that customers can easily recognize.  E-commerce merchants should use their website address, if possible (i.e., ABCKitchenProducts.com 18771234567).  If the cardholder does not recognize the transaction or business name in the descriptor, a merchant risks having a cardholder initiate a chargeback, which creates an unnecessary hassle for the merchant, not to mention a delay in payment or the sale being reversed.

Communicating Security Policies: With data privacy being a top concern, any web site that does not provide a secure checkout procedure is asking for trouble – or shouldn’t have a merchant account at all.  It goes without saying (but yet we still need to mention it) that merchants need to show that they are employing data security policies to protect consumer data.  Explain what data is collected from consumers and for what reason.  An online merchant conscientious about data privacy should clearly post their data security policies.  For example, including information about adhering to PCI DSS compliance, SSL certificates (Verisign, GeoTrust, SSL.com, etc.), what shoppers should look for (i.e. site seals) to show the site is secure and the importance of consumer data privacy to the merchant.  A responsible merchant who genuinely wants to gain and maintain consumer trust will also give consumers an option to “opt out” of receiving emails (promotional, from third parties, etc.) and refrain from collecting or sharing data with third parties, even if for the purpose of marketing research.

Convenient Ordering Process: Don’t add a bunch of unnecessary scripts to collect user data (browsing history, IP address, etc.).  Browsers, such as Firefox, now use script blockers, which although is comforting for the user, can cause issues with ordering procedures.  Additionally, providing a shipping process that includes tracking details is always appreciated by shoppers.  Even if you choose the least expensive route (i.e. USPS), tracking options are available.  Customers love knowing where their order is and when it will arrive.  On that note, automatically sending emails that provide these tracking details or updates for any delays in shipment are way more convenient than having to manually access the information.

Cancellation, Return, Exchange Process: Who pays for shipping?  How many days does a customer have to return an item for a refund?  If it’s too late for a refund, does customer receive store credit for a return?   Is there a mechanism in place for order cancellations?  This information should be clearly posted and explained.

Smart Marketing: Employ marketing tactics that aim to keep customers, not make them go elsewhere.  For instance, deducting value from gift cards is just plain mean.  New FTC rules for gift cards went into effect in August.  While the FTC ruled that gift cards can’t expire for five years, it does allow merchants to charge inactivity fees if the card has not been used for a year, provided all this information is clearly displayed on the card.  If a merchant chooses to charge fees, how about asking for an email address and reminding the purchaser about expiration or impending inactivity fees?

Sales promotions like “Buy something today and get 50% off next week” don’t always work in the way intended.  While this is meant to entice a quick future purchase, consumers feel duped and would rather have a coupon that has a longer expiration period.  With today’s economy, it’s tough enough to bring in initial sales, let along repeat sales in that period of time.

Asking customers for their email addresses will only be effective if the information is not abused.  Mention that the email address is not sold, shared, or used for behavioral marketing practices, in which browsing behavior is collected to target the advertisements which are displayed to an individual.   Until the FTC puts “do not track” rules to enforce online consumer privacy into place, industry self regulation will have to suffice to protect consumer data.  On the flip side, adding email addresses to a customer database for email promotions is fine, but merchants should be wary of flooding customers with daily emails.  Once a week – or a few times a month – is better.   Daily email promotions (we all get these, so we know how annoying it is) will make them hit the delete key even faster – and is more likely get your <from> address or web site URL added to an automatic junk filter.

Contact Information: Even if you are a small e-commerce outfit, you need to have basic contact information – a phone number (preferably toll-free) and at least an email – clearly listed on your web site.  Better yet, 24/7 access to a live agent is attractive to night owls.  If not, infomercials wouldn’t still be around today.

Customer Service: Whether brick and mortar, over the telephone, by mail or online, merchants need to make customer service a top priority.  A merchant can have awesome products and/or services, have a kick-butt web site, do tons of cool marketing, send out attractive email promotions, and offer free shipping, but if it doesn’t provide a secure shopping environment, a convenient and hassle-free shopping experience or excellent customer service for any inquiries, returns, exchanges or issues with an order, it might as well kiss customers goodbye.

Lastly, to keep up with, or stay ahead of, the pack, always be open to offering new payment options for your customers.  Accepting major card brands (V, MC, Amex, Discover, JCB) is the least you should offer.  There are a lot of companies and technologies forging forward in this arena, as merchants want lower cost payment alternatives and, for the ones with a bigger picture in mind, more options to fuel global growth.

As one of the first brick and mortar retailers go to online, 1-800-Flowers continues to lead the pack in thinking outside the box. Started as a single flower store in the 70s, the company launched a toll-free brand in the 80s and then evolved into one of the first online retailers in the mid-90s. Already utilizing mobile phone apps and Twitter, Facebook adds another avenue where the company is finding ways to go directly to the consumer, rather than waiting for the consumers to come to their web site.

“Facebook was the world’s fourth most visited web site in June… “

According to Alexa, a web information research company, Facebook users spend, on average, 30 minutes a day on the site. This gives online retailers, with at least a Facebook “fan” page, more opportunity to capture the attention of their current and future customers. It’s about allowing the consumer as many avenues for purchase as possible.

In addition to 1-800-Flowers’ fan page, followers can also post comments, provide feedback and publish links on their profiles. The company also provides apps for iPhones, Blackberrys and Androids, as well as a basic mobile site, where consumers can shop the Mobile Gift Center and receive SMS offers via their mobile phone.

Besides being a company which seems to forge new marketing paths, 1-800-Flowers needs to throw a pretty wide net out there to catch consumers. 1-800-Flowers’ target market is larger than consumers looking to send flowers, since the acquisition of several companies over the years has expanded its basic product line to include popcorn and specialty treats, cookies and baked goods, premium chocolates and confections, gourmet foods, wine gifts, gift baskets, home décor and children’s gifts.

With its 250 million member base, Facebook was the world’s fourth most visited web site in June, according to figures from comScore, an Internet marketing research firm. So far, Facebook has become a very strong marketing platform (hence the word “viral” that has been added to the original “social networking” term). However, based on other known security issues, the site’s payment platform still has analysts and developers wary of using the site for payment checkout. 1-800-Flowers uses an embedded transactional advertising widget, which operates as a fully functioning storefront. To serve its new e-commerce channel, Facebook is developing a new electronic payments system that might compete with Paypal. Facebook’s Vice President of Product, Christopher Cox, said “software developers who sell applications on Facebook are testing the payments system, but it is unclear whether the company will manage e-commerce transactions across the Web.”

Similar to offering alternative payments, merchants can stay ahead of the curve by regularly finding new ways to maintain their current customer base and reach new consumers. They need to be thinking – “where is my target customer spending their time?” The old adage of “build it and they will come” doesn’t apply in every situation – especially in today’s virtual world.

There are still some advantages to retail shopping, such as many people like the ability to see and touch what they are buying. However, that will not stop online sales from reaching as high as $176.9 Billion in 2010. Amazon.com and eBay have significantly discounted their merchandise over the past year to compete with retail stores. The National Retail Foundation forecasts that traditional retail sales will drop .5% in 2009.

The many advantages to shopping online will propel ecommerce in 2010. To name a few, shoppers can compare prices on items without having to leave the comfort of their home, shopping online is less time consuming, and it saves gas money. Although ecommerce shopping is fast and easy, it is important to protect yourself.

Here are a few items to keep in mind when shopping online:

1. Make purchases on sites that are well known and trusted.
2. Do not give out any information over the phone. There are con artists out there that watch for online purchases and then call you to confirm your information. If you order online, they do not need your credit card information again.
3. Make sure the site you make a purchase on is taking you to a secure page to make your purchases. Typically, you will see the beginning of the URL change to HTTPS.

Ecommerce businesses owners should understand that with more purchases, they will also see a rise in disputes. Make sure to resolve all disputes to eliminate high chargeback ratios. Some people are what I call “online shopping snakes.” They purchase items online and then dispute them to get out of paying for the item. It is important for ecommerce businesses to have clear terms and conditions to try and avoid this from happening. Having good reporting and records of all purchases is the key to ensuring your online business gets to enjoy its fair share of the flourishing ecommerce market.

Once your business is online and your shopping cart has been built, you have to select a payment gateway. Many merchants select their payment gateway based on what their merchant services provider tells them. There are hundreds of payment gateway options out there, and not all of them measure up.

A gateway facilitates your online payments by connecting your secure order from your merchant account to a processing bank. Something as important as the transfer of money should take some research. When selecting a gateway, consider available features, reliability, and support.

Some well known gateway options may not be your best bet. Authorize.net is a gateway that offers nothing more than a name. When it comes to support, this popular option falls short on all levels. Forty-five minute hold times, getting the run around from the help desk, and being a one trick pony are all this gateway has to offer.

An important item to look for in a gateway is ease of integration. If you don’t have a lot of money to spend on programming, or you are new to programming, you should select a gateway that allows you to follow some easy copy and paste steps to get your site up and running with all the payment options needed. A payment gateway should have a platform for identifying and preventing chargebacks without you having to take time out of running your business.

Some additional features to look for are a robust CRM and a strong customer database so you can run promotions and take care of your customers. A good payment gateway allows you to take payments in multiple fashions, such as recurring billing, bill me later, and ACH. There are gateways out there that even do your marketing for you. One such product is the Check-Out Box .

When selecting which gateway is going to support your business, cost should be the last deciding factor. Many online gateways may have low startup costs, but have hidden costs for additional features. For example, Authorize.net considers E-check and recurring billing to be additional features with additional charges.

I hope this sheds some light on those of you looking for a gateway solution. I invite those looking for a strong gateway to ask questions and give their opinions on gateway experiences you have had.

Consumers in the United States spend billions of dollars over the internet each year, and it is reported by MasterCard that the majority of the purchases are made without using SET. Most merchants who sell over the internet are using Secure Sockets Layer (SSL) for their internet stores. Typically this would be enough, but fraud is on the rise.  The economy is contributing to increased instances of internet theft and identity theft.

SET was created back in 1997 to take the process of security a step further by allowing the use of digital IDs to vouch for the identity of the merchant selling the product, as well as the consumer making the purchase. SET is widely used in Europe and is said to be a headache to use. The process is tedious and requires the buyer to place electronic software on their PC to obtain the digital ID from their credit card issuer to vouch for their identity. It is difficult to distribute this many digital IDs and software loads without hiring access staff.

Here we are over a decade later and this technology is still on the back burner, even though it is highly recommended that SET be used by everyone. In order for SET to work, the customer must have a SET-enabled browser and the transaction provider or storefront must have a SET-enabled server. The customer will receive a digital certificate that functions as an electronic credit card for online purchases. It will include a public key with an expiration date and will have been through a digital switch to a bank to ensure its validity.

For more detailed information about SET you can visit Visa, MasterCard or your bank’s website.

There are many different shopping cart options for people to choose. Every online business is different, and shopping carts are customized to fit your business needs.

First, when looking for your business’s shopping cart, it is important to know what features you would like it to accommodate. Most shopping carts can total orders, calculate tax and shipping costs, and transmit information via a payment gateway to process a sale.

The second important item to keep in mind when selecting your shopping cart is whether or not it is compatible with your payment gateway. Not all shopping carts like to play in the same sandbox. For example Authorize.net is a well known industry gateway. However, even this industry giant does not work with Yahoo’s shopping cart. It is always good to check with your web developer before signing up with a specific gateway. Some smaller gateways, such as Transaction Central, may be compatible with a limited number of shopping carts, but provides many customizable features.

Some other features to look for in a shopping cart are:

• Recurring billing capabilities
• Back end reporting
• Checks on-line
• Manual batching
• Multi-user access
• Future options – can peripherals be added if you choose to use this to expand your business to a retail store front?

It is also important to check with your web developer to make sure you get a SSL Certificate (Secure Sockets Layer). This is required by almost all gateways and ensures that card holder data traveling over the internet is encrypted. It is decrypted once it is received by the processor.

There are many shopping carts out in the market, so it’s best to write down all the features you want before beginning your search.

Let’s face it – we all strive to have that BMW as opposed to a Dodge Neon, and even shop around for the best appliances. Knowing this, have you ever stopped to wonder why we, as business owners, opt for the lowest bidding credit card processor for something as important as our business?

As with other products, cheaper does not necessarily equate to better. How about reliability? If your customers are charged the wrong amount, or transactions are declined due to an unreliable or inaccurate gateway, who do you think they will blame? That’s right, YOU! Consider this – is the money you’re saving using the cheapest solution worth the cost of losing future business?

Let me share with you this example, a few weeks ago, a merchant was having trouble getting cards approved on his website. He then had his funds held by his processor. His merchant services provider told him it was his gateway and conversely, the gateway provider told him it was his merchant services provider. Needless to say, this merchant chose his provider based on the lowest bid, and what he got as far as service and reliability was a whole lot of finger-pointing and denial of liability.

I’m sure as business owners you are bombarded with calls and mailers from merchant services companies on a daily basis claiming their fees are the lowest. Fees for merchant services are an unfortunate reality, irrespective of the processor you choose, so it is important to choose the right company to partner up with. Here are some things you should know when deciding on a merchant services provider:

• Make sure whatever gateway you choose is compatible with your shopping cart software.
• Rates and fees are determined by many factors: length of time in business, percentage of sales made over the phone or the internet, type of business, personal credit rating, and dollar amount of sales per month. A typical rate should be about 2.30% to 3.5%, but some companies charge as high as 6%. Poor personal credit or business type may warrant a much higher rate.
• Do not agree to a high discount unless you are sure no other company will process your charges for lower.
• Be sure to ask about all fees involved such as Gateway fees, ACH fees, monthly minimums, Address Verification Fees, transaction fees and statement fees.
• Read all agreements closely to determine the circumstances for which your money can be put on hold.
• Find out if there will be a hold or reserve on your account. If so, how much with be held and how long will it be held for?
• What types of fraud and risk monitoring does the processor and gateway provide?
• Who do you call when you have questions? For instance, a processor offering its own gateway is a better choice since there will be fewer support calls to make in the event of service interruption.

In my experience in this business, I have come across numerous merchants that got exactly what they paid for – very little.

Take my advice, do your homework and don’t settle for the lowest bidder.