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<figure class="text-center"><img src="https://www-cdn.bigcommerce.com/assets/iPad-POS-Shopkeep.jpg" alt="iPad POS" title="iPad POS"></figure>
<p class="text-center"><br></p>
<p>As a retail business with <a href="https://www.bigcommerce.com/blog/omni-channel-retail/#why-us-consumers-shop-where-they-shop" style="font-size: 1rem; letter-spacing: 0px; background-color: initial;">omnichannel aspirations</a>, one of the biggest mistakes you can make is choosing the wrong system for running transactions in your store. Until recently, using a traditional electronic cash register or a legacy on-premise point of sale (POS) system was enough for most businesses. But today’s entrepreneurs need technology that empowers them to keep up with the pace of modern commerce. That’s where switching to an <a href="https://www.shopkeep.com/ipad-pos" style="font-size: 1rem; letter-spacing: 0px; background-color: initial;">iPad POS</a> can give savvy retailers a significant advantage.<br></p>
<p>If you’re interested in the idea of an iPad POS, but reluctant to move on from your legacy POS or cash register, In this article, we’ll clear up any confusion. With that in mind, let’s take a look at the specific business advantages you can expect from switching to an iPad POS system. 
</p>
<h2></h2>
<h2>1. Lower Cost
</h2>
<p>Any retailer using or considering an on-premise POS can expect significant financial savings from going with an iPad POS system. With a startup cost that can reach <a href="https://www.merchantmaverick.com/how-much-does-a-pos-system-cost/">$5,000 - $7,000 per terminal</a> and none of the advantages provided by modern technology, a traditional POS system is a tough pill to swallow for most retailers. 
</p>
<p>With an iPad POS system, a retailer can get started for a reasonable monthly fee plus a modest investment of around $800 - $1,000 for the associated hardware (iPad, credit card reader, barcode scanner, etc.), without sacrificing key functionality. 
</p>
<p>If you’re running your retail shop from an electronic cash register, there’s no getting around it. An iPad POS system is going to cost you more money. However, as we’ll cover later on, you’ll get significantly more for the money you do invest. 
</p>
<h2></h2>
<h2>2. Improved Ease of Use
</h2>
<p>While they’ve been around for decades, there’s nothing particularly easy or intuitive about using an electronic cash register. The same is true for on-premise POS systems. Most feature an outdated and overly complex user interface. In a practical sense, these complicated interfaces make it harder to <a href="https://www.shopkeep.com/blog/retail-staff-training-ideas">train new employees</a>, and can possibly lead to more errors when ringing up customers. Neither outcome is good for business. 
</p>
<p>An iPad POS system, on the other hand, is likely to feature a modern user interface that’s far easier to use. Familiar touchscreen hardware also improves the overall usability of the system. Not only does this make training employees easier, but it also reduces errors and can help your team accept mobile credit card payments faster. Not only will your new employees begin making an impact sooner, but by improving the customer experience, you can build your brand and enhance customer loyalty. 
</p>
<h2></h2>
<h2>3. Cloud-Based 
</h2>
<p>It’s a little bit technical, but many of the most impactful benefits of an iPad POS system are a product of it being cloud-based. If you’re a BigCommerce customer, then you’re already familiar with how the <a href="https://www.bigcommerce.com/ecommerce-answers/what-is-cloud-computing/">cloud and software-as-a-service (SaaS)</a> have both revolutionized ecommerce. Many of the same benefits also apply to cloud-based point of sale systems:
</p>
<ul><li><strong>Free Software Updates - </strong>For most vendors, these updates are free, regularly released, and as easy to download as an app on your phone. 
</li><li><strong>Managed Security - </strong>Because your POS is hosted on your vendor’s servers, they help to maintain the technical security of your business, keeping you and your customers’ data safe. Much like the <a href="https://www.adamenfroy.com/best-web-hosting-services" target="_blank">best web hosting companies</a> focus on site speed and security for their websites, POS security does the same thing.&nbsp;</li><li><strong>Access From Anywhere</strong> - With the cloud, you can access your POS software from any computer with an internet connection, allowing you to keep track of your business even when you’re out of the office. 
</li><li><strong>Rich Integrations - </strong>Modern cloud software is designed to interoperate with other common applications like ecommerce, accounting, and marketing platforms, allowing you to use point of sale data to power and inform other areas of your business. 
</li></ul>
<p class="text-center"><strong></strong>
</p>
<h2></h2>
<h2>4. More Flexibility 
</h2>
<p>“Shop Small” and the “maker movement” are some of the more exciting trends to emerge in retail and commerce over the last five years or so. Accompanying these trends we’ve seen a rise in events like pop-up shops, community markets, craft fairs, holiday markets, and independent retail in general. 
</p>
<p>An iPad POS system makes it much easier to <a href="https://www.entrepreneur.com/article/296064">participate in these events</a>. Plus, you can do so in a way that’s just not possible with a cash register or on-premise POS. You can take your whole payments infrastructure with you. Bring your POS, a hotspot (if the venue doesn’t have WiFi), a card reader, and barcode scanner (if you use one) in a backpack and it’s like you never left your brick-and-mortar store. 
</p>
<p>You won’t need to worry about reconciling inventory after the market ends, or turning away potential customers that can’t pay with cash. Packing it all up and heading home takes just a few minutes too. 
</p>
<h2></h2>
<h2>5. Increased Power 
</h2>
<p>Compared to a cash register, an iPad POS system offers an almost endless array of additional features that help you run and grow a more successful business. Here’s just a quick list of the powerful functionality that a <a href="https://www.shopkeep.com/business-types/retail-pos">modern retail POS system</a> makes available to you: 
</p>
<ul><li><strong>Inventory management </strong>- Stay on top of inventory levels, know which products to reorder and when, plus track your inventory cost and profit margins to scale growth. 
</li><li><strong>Analytics and Reports - </strong>Leverage the power of data to better understand your business performance so you can make strategic improvements. 
</li><li><strong>Customer marketing</strong> - Use your POS to build your email list, sell gift cards to reach new customers, and add customers to your loyalty program to grow repeat business. 
</li></ul>
<p>Many on-premise POS systems will include these features as well. The big difference is in usability and modernity. Because updating an on-premise POS is both difficult and expensive, most merchants choose to skip software versions. This means they’re running outdated software with missing features and confusing interfaces. By making the switch to an iPad POS, you get cutting edge features in an easy-to-use package, and your software receives regular, free updates. 
</p>
<h2></h2>
<h2>6. Aesthetics 
</h2>
<p>This is a little more subjective, but there’s something about using an iPad POS system that just screams “modern” and “hip” in a way that a cash register or a legacy point of sale can’t. This look might not resonate with every merchant, nor does it fit with every store’s interior. But if you’re looking for an upgrade in the interior design department, there’s a good chance that an iPad POS system will give you the lift you want. 
</p>
<p class="text-center">
</p>
<h2></h2>
<h2>7. Enhanced Customer Experience 
</h2>
<p>Up until this point we’ve talked about how this type of system will benefit you as a business owner. But it can also significantly improve the shopping and buying experience for your customers. Here’s how: 
</p>
<ul><li><strong>Easier Checkout - </strong>Using an iPad POS ensures you have the latest and greatest payments software and hardware, which lets your team ring up customers fast, making long lines and annoying wait times a thing of the past. &nbsp;
</li><li><strong>Emailed Receipts - </strong>Let customers receive receipts via email for more convenience and less wasting of paper. &nbsp;
</li><li><strong>Fast Signups</strong> - Let customers sign up for your email list or redeem their loyalty points in a few taps instead of asking them to write their email address on a clipboard or search for a punch card in their wallet or purse. 
</li><li><strong>Simplified Tipping</strong> - It doesn’t make sense for every business, but most iPad POS systems let you prompt shoppers with pre-defined tipping percentages for quick, easy tipping. 
</li></ul>
<p>There you have it, seven different advantages that an iPad point of sale system can deliver to your retail business. Whether you move on from a cash register or on-premise POS is ultimately up to you, your budget, and your goals. However, this article should demonstrate that doing so can almost certainly improve the efficiency and overall performance of your business. 
</p>
<p><br></p>
<p><br></p>

Payment Gateways

I Pad POS Shopkeep

7 Advantages of Switching to an iPad POS System

<p>In the world of ecommerce, false declines are legitimate credit card purchases that are incorrectly declined by the credit card issuer.</p>
<p>Also known as false positives, false declines are what happens when an online shopper makes a legitimate purchase using a valid credit card, but that purchase is declined when it should have been approved.
</p>
<p>It’s a simple concept, but the results are multifold&mdash;and unpleasant:
</p>
<ul><li>For consumers, false declines are both a nuisance and an insult. They are a nuisance because the consumer can’t buy the intended product or service but must instead look elsewhere to make the purchase. And they are an insult because they imply, explicitly or implicitly, that the shopper is guilty of wrongdoing or fraud. In fact, a Sapio Research study revealed that a full 33% of American consumers would “never place an order with that merchant again” if their order was declined.
</li><li>For online merchants, false declines are also a nuisance because they result in lost revenue for the merchant. A purchase that is declined by the bank is a sale that the merchant never makes. Plus, false declines typically anger customers, and increase the number of customer complaints and customer service calls that the merchant must field by phone, email and chat.
</li><li>False declines are costly. According to <a href="https://www.merchantriskcouncil.org/resource-center/surveys/2017/2017-mrc-global-fraud-survey?authResult=success">the Global Fraud Survey</a> published by the Merchant Risk Council, the average online store declines 2.6% of all orders because they suspect fraud. The higher the purchase price, the higher the percentage of declines. Merchants decline roughly 3.1% of orders over $100, for example.&nbsp;
</li></ul>
<p>If one does the math, it’s easy to see that this high percentage of declines means plenty of lost revenue for online merchants. For a business with $10 million in annual online sales, this amounts to up to a whopping $260,000 in lost revenue annually&mdash;lost sales that could have been prevented.
</p>
<p>To understand why false declines happen at all, we must first understand the world of online fraud.
</p>
<h4>Welcome to the real world of false positives</h4>
<p>False declines are a peculiar byproduct of the online economy, in which merchants must approve credit card transactions in which the credit card is not physically present.
</p>
<p>In a typical bricks-and-mortar retail purchase, a shopper hands over a physical credit card during the transaction. If the card is valid and not stolen, the transaction is usually approved. But online, the card is never present, just the name, card number, expiry date and security code. In hundreds of portals on the dark web, stolen credit cards are sold to online crooks, who use them to make purchases anonymously. This is the main reason that online credit card fraud is so common&mdash;it’s easy, anonymous, and is hard to deter.
</p>
<p>This type of fraud (using stolen credit card credentials to make purchases online) is called card-not-present (CNP) fraud, and costs online merchants&nbsp;<a href="https://www.fico.com/enterprisefraud/assets/FICO_Fraud_Follows_Opportunity_Infographic_4177IN.pdf">more than $6 billion per year</a>. Because of this, an entire industry exists of software companies who offer apps, shopping cart plugins, tools, and services to spot card-not-present fraud before a transaction is approved.
</p>
<p>These tools use a mixture of <a href="https://blog.clear.sale/how-machine-learning-can-improve-fraud-risk-assessment">rules and machine learning</a> to either approve or decline credit card transactions, typically automatically. And here is where the false declines happen. Some automated CNP fraud detection tools are overzealous, declining valid credit card transactions as well as fraudulent ones.
</p>
<p>To understand how false positives happen, take a look at a typical online purchase:
</p>
<p><b><strong>Step 1: Shopper visits online store.</strong></b>
</p>
<p><strong><b>Step 2. Shopper places product in shopping cart</b> and enters credit card details</strong>. So far, the order has neither been approved nor declined.
</p>
<p><b><strong>Step 3: Payment gateway processes order</strong></b>&nbsp;(a&nbsp;payment gateway&nbsp;validates the customer's card details securely, ensures the funds are available and eventually enables merchants to get paid).&nbsp;Depending on how it is configured, the payment gateway may run the order through fraud filters. These filters are typically highly automated and unsophisticated. In other words, they cannot assess gray areas, such as unusually large purchases made by a legitimate customer using a valid credit card for a special occasion, such as a wedding.
</p>
<p><strong><b>Step 4: Third-party fraud protection system processes order.</b>&nbsp;</strong>If the merchant uses a third-party fraud-protection system, the system uses an additional layer of automated filters to conduct a more in-depth analysis of the order. It may use advanced machine learning techniques to learn the specific fraud characteristics of a business. But these automated systems are also fallible. They struggle with holiday scenarios, for example, when customers place more orders than usual to be delivered to multiple addresses.
</p>
<p><b>Step 5: Issuing bank authorizes order.</b>&nbsp;Banks also have automated processes to identify fraudulent orders. When they decline a transaction, banks provide a response code to indicate the reason, but these codes are sometimes vague and do not help merchants avoid similar transactions in the future.
</p>
<p><b>Step 6: Settlement of the payment.</b>&nbsp;At this point, the transaction has been approved, but technical issues between the customer and the bank may still disrupt the process.
</p>
<h4>How false declines happen</h4>
<p>Between step one and step five, there are literally hundreds of ways the purchase can be declined. This is because fraud filters are powered by complex algorithms that use the common characteristics of fraud as inputs. These include:
</p>
<ul><li>Location of the shopper (Is it different from where they usually shop from?)
</li><li>Delivery address (Is it to a different country from the one the card holder lives in?)
</li><li>Shipping speed (Is the shopper requesting the fastest shipping method, perhaps to receive the goods before the fraud is detected?)
</li><li>Inconsistent order data (the zip code and city entered don’t match, for example).
</li><li>Larger than average order
</li><li>Multiple shipping addresses (buyer makes multiple purchases under one billing address, but ships the products to multiple addresses)
</li><li>Multiple orders from many credit cards
</li><li>Missing card information
</li><li>Strings of orders from a new country
</li></ul>
<p>Some types of fraud are so common that the filters used to spot them have names:
</p>
<ul><li><b>Daily Velocity Filter:</b> Limits the number of transactions that can be processed in a day from the same IP address.
</li><li><b>Shipping and Billing Mismatch Filter:</b> Identifies transactions submitted with different shipping and billing addresses.
</li><li><b>High-Ticket-Purchase Filter:</b> Identifies purchases that are above a set dollar threshold.
</li><li><b>IP Address and&nbsp;Shipping Address Mismatch Filter:</b> Compares where order is coming from with the shipping address provided.
</li></ul>
<p>For obvious reasons, credit card companies don’t publish the criteria that their complex algorithms use to detect fraud and catch fraudsters. But&nbsp;some industry analysts estimate that fraud-detection systems weigh up to 500 factors when determining whether to approve or decline orders.
</p>
<p>False declines happen when any of these hundreds of criteria are too stringent. For example, most online shopping carts allow a shopper to enter an incorrect credit number more than once. All shoppers are clumsy sooner or later, and either enter their credit card numbers incorrectly, or type the expiry date incorrectly. A system that declined all orders after the first mistake would result in an unacceptably high number of declines.
</p>
<p>This goes for plenty of the other criteria that fraud-detection tools use when detecting fraud. When they are set too strictly, they result in an unacceptably high level of false declines. Some tools, for example, arbitrarily decline all orders from high-risk countries automatically. Other tools automatically decline all orders not requiring a signature on delivery.
</p>
<h4>The cure for false positives</h4>
<p>The cure for false positives is obviously not to stop using anti-fraud tools.&nbsp;
</p>
<p>What merchants must do is create smarter filters that spot fraud by understanding context. This typically means analyzing the data behind declined transactions and disputes. Additionally, merchants can avoid false declines by refusing to (or choosing a fraud protection provider who refuses to) auto-decline any orders, instead conducting an expert manual review of any flagged transactions. One caveat: This manual review must be done with the customer experience fully in mind. Wait too long to verify the customer’s details, or act accusatory when contacting them, and the transaction&mdash;and the customer relationship&mdash;is all but guaranteed to be cancelled.
</p>
<p><a href="https://offer.clear.sale/false-declines-ecommerce-fraud-prevention-report">False declines</a> can be extremely damaging. Fortunately, by finding similarities and correlations between legitimate transactions that are consistently flagged as fraudulent, merchants (and the companies who make fraud filters) can create accurate fraud filters that lead to more legitimate transactions being approved, and fewer genuine transactions being declined. And by ensuring that their fraud prevention service always has the human touch, they can keep their customers happy&hellip;and coming back.&nbsp;&nbsp;</p><p><i>This blog post was contributed by&nbsp;Rafael Lourenco, EVP and Partner at&nbsp;</i><a href="https://www.clear.sale/"><i>ClearSale</i></a></p>


What Are False Declines?

<figure class="text-center"><img src="https://www-cdn.bigcommerce.com/assets/pos-image.png" alt="Point of Sale Data Analysis" title="Point of Sale Data Analysis" data-image="zz3ejgi8uksq"></figure>
<p class="text-center"><br></p>
<p><br></p>
<h2><strong>POS Data Analysis: The Truth About your Business</strong>
</h2>
<p>Ask not what your POS can do, but what your POS can do for you. The challenge of choosing a POS system may be the first decision you have to make for your business, whether you’re a brick and mortar retailer, a restauranteur or an online ecommerce website. Features and benefits galore, there are some POS systems that are tailored for eateries, some for retail stores and some for multichannel online ecommerce websites, but it’s not so much about what your POS can do, it’s what data you get from your POS that can help you make business decisions. 
</p>
<h3><strong>Business Decisions Based on Data</strong>
</h3>
<p>Your great business idea may have been a stroke of genius, but to make it work, you’ll need data. You’ll need to make decisions based on solid data to make effective decisions that will help grow your business. A point-of-sale system can be much more than an effective way to take payments from your customers, but few business owners are leveraging the data that is available from an integrated POS. <a href="https://www.marketwatch.com/press-release/pos-software-market-to-witness-huge-growth-by-2025-analysis-by-top-players-realtime-pos-heartland-payment-systems-keystroke-shopify-pos-solutions-2018-08-22">Globally, the POS software market is a growth industry</a>, and while that does serve to highlight its importance it also leaves business owners with a lot of choices to make before deciding on an integrated solution.
</p>
<h3><strong>What is Data Collection?</strong>
</h3>
<p>There are essentially two ways in which data is collected from customers online. An example of the first would be a POS system. This is known as passive data collection where the customer is not required to take any specific action and data is collected by the POS. This could be anything from information about repeat sales, time of sale, merchandise purchased and even geographic location and demographic data. <strong>Passive data collection</strong> is used to help <a href="http://web.mit.edu/ecom/www/Project98/G2/data.htm">“predict user preferences based on an historic profile of interactions with a company or site.”</a> Another example of passive data is the analytics provided about website usage, including most visited pages, time of visits, time to purchase and <a href="https://www.monsterinsights.com/how-to-reveal-your-path-to-conversion-in-google-analytics/">non-linear path to purchase</a>. Even though the user/customer/client may not be taking any specific action on your website, think people who visit a restaurant website before making a reservation, for example, there is still a large amount of data available about users that can be quantified and acted upon to improve and implement <a href="https://venngage.com/blog/growth-strategy/" target="_blank">growth strategies</a>. Particularly relevant to ecommerce <a href="/articles/ecommerce/ecommerce-seo/" target="_blank">website owners looking to improve SEO</a>/SEM results based on website data.
</p>
<p><strong>Active data collection</strong> means that a customer has had to take a specific action on the website to provide you with more information about them. This type of data collection can also be managed through a robust POS, depending on where the user is in the buying cycle. Good examples of this are registration forms as part of the purchase process. It’s important to note that there is not only a limit to how much information a customer will provide (there is a limit to how long people will spend answering a survey on your site) and the ever-increasing fears about privacy and security. While active data collection can give you a lot of data to help your business make informed decision, the process needs to be handled sensitively or run the risk of driving potential customers away from your site or store.
</p>
<h3><strong>POS Data – Where Is It?</strong>
</h3>
<p>Every time you use your POS, you are accessing and creating multitudes of data points about your customer, about buying habits, about the market that you serve and about ecommerce capabilities and potential growth areas for your business. Each business will find different aspects of the data collected relevant to their specific business model but there are a few common data points that can be used by any type of business that is in business online. Understanding POS data is an important first step to take before learning how to use it. 
</p>
<p>Your point of sale data is data collected by a business when a transaction happens. On a micro scale this includes any checkout at a retail store, handheld POS hardware and even QR or barcode scanners from apps. On a macro scale data is collected from groups of retailers, like all ecommerce stores in a specific niche, shopping mall data, or even city-wide data. A cash register for example, is a micro level data gathering tool in the macro level that is your whole business – this is where multichannel ecommerce is so important and can provide so much more relevant data to help business growth. POS software within POS hardware is where the data magic really happens.
</p>
<p><strong><em>SMB Business Owner Tip:</em></strong> Smaller retailers and single online stores <a href="https://www.forbes.com/sites/forbestechcouncil/2018/08/29/how-to-find-the-right-pos-system-for-your-franchise/#6d7794885f0e">do not need to have the most sophisticated POS systems to get a lot of useful data</a>. It’s more important to <a href="https://www.comparisun.com/best-pos-systems/">choose a POS system</a> that works best for a) your type of business and b) your specific business needs. You’ll want to <a href="https://www.comparisun.com/">compare POS solutions</a> that include:
</p>
<ul><li>Terminal POS: Hardware and software solutions that may include barcode scanners, cash registers and app scanners.
</li><li>Cloud-Based POS: online POS systems, often used in conjunction with existing hardware like tablets or computers. Heavily utilized by online stores and ecommerce websites.
</li><li>Mobile POS: normally used as payment processing systems, usually adopted by small business owners
</li></ul>
<p>The most important aspect with regards to data collection will be that you are able to access the data in a granular and easily readable format.
</p>
<h3><strong>POS Data – Why Is It Important?</strong>
</h3>
<p>Not just important, it’s essential. It is literally the point at which your data collection starts and the foundation for any other data that you collect, whether passively, or as you increase engagement with your customers, actively.
</p>
<p>There are many examples as to why POS can be a critical success factor for any business, the most significant of which is inventory management. To run a successful business, you need to know what you are selling. You can’t effectively manage inventory if you don’t know what customers are buying. 
</p>
<p><strong>How can you provide your customers with what they want, if you don’t know what they want…?</strong>
</p>
<p>So now you have your data, it’s not going to do any good, sitting in a report somewhere if you’re not going to do anything about it. <a href="/blog/customer-data-important-ecommerce/">Data is only effective if you’re using it</a>. If you’re able to integrate your POS data with other ecommerce tools and strategies, including your website, you’re sitting on a gold mine of data that could mean that you’re sitting on a gold mine of success.
</p>
<p>We’ve discussed just how important inventory data is to the smooth running of your business and in helping you make decisions about what products are popular or not and how to manage your inventory. For retail stores, POS data can provide information about increases or decreases in foot traffic through the store. 
</p>
<h3><strong>Marketing Data is Key</strong>
</h3>
<p>Marketing a promotion data can be tied to POS data to give you crucial information about successful promotions. Tying a marketing promotion to specific sales can give you a wealth of information about your promo specifics and how to improve them. For solely web-based ecommerce businesses, this is where data collected from A: B testing of different web pages, different offers and different conversion strategies is indispensable. If you’re setting up an online store, you must ensure that your platform (website, ecommerce solution) is able to handle effective A: B testing. It’s a must-do to get can-do data. Under marketing, naturally comes social media marketing and SEM (Search Engine Marketing) and PPC (Pay-Per-Click). 
</p>
<p>All this data when combined with your POS data will not only tell you what you’re doing right, but where you can improve and how you can maximize your profits while minimizing your marketing spend by making decisions about marketing promotions that are based on ideas rather than facts. Just because it’s a good idea, doesn’t mean it’s a good idea for your business.
</p>
<h3><strong>The Most Valuable POPS Data – Your Customers</strong>
</h3>
<p>Every time you make a sale, your POS system records information about your customer. Multiple sales to a single customer and you start creating an order history that provides additional data. Sales in a specific area – gives you data which can help with inventory management, specifically shipping. If you can engage your customers at point of sale and get them to sign up to your mailing list, you have additional data on how customers respond to marketing promotions even start getting loyalty card/app data to help you further. 
</p>
<p>POS data can even help you create personalized customer service strategies and marketing promotions for individual customers. It can also be used to help forecast future demand and sales. That trend line and effective extrapolation of your POS data can help you prepare for holiday sales. Demand forecasting has very real implications when it comes to inventory management. <a href="https://www.sciencedirect.com/science/article/pii/S187705091300135X">This case study</a> published by Science Direct shows just how POS data can be leveraged to improve purchase and manufacture planning. 
</p>
<p>I Have the Data, What Do I Do?
</p>
<p>It can be overwhelming to look at your POS data and not know where to start, but at the very minimum you need to look at three key insights to get started:
</p>
<ul><li>Sale Value: What products are selling and where you are selling most of them. The first is essential for every business and the second is vital for online stores.
</li><li>Promotion Value: Are your promotions yielding sales? Makes sure that you’re set up for multichannel <a href="https://www.bigcommerce.com/product/">ecommerce on an integrated platform</a> to get the best insights into the link between your promotional efforts and sales. Measuring the incremental effect of your promotions will help you develop new marketing ideas and manage inventory during promotion cycles.
</li><li>Pricing Value: Optimized data about pricing can help you increase margins depending on POS data on specific items.
</li></ul>
<p>The obvious advantage of using data-driven insights is the risk, or rather the decreased risk of making errors that could be disastrous. Data never lies. It can’t be manipulated by emotion; it cannot be transformed or tell a story that you want to hear to make you feel better.
</p>
<p>It’s the cold, hard truth, and it’s the very best way to guarantee success over hoping for the best.
</p>
<p><br></p>

Pos image

Point of Sale Data Analysis

<p><strong>Definition:</strong> Interchange fees are transaction fees that the merchant's bank account must pay whenever a customer uses a credit/debit card to make a purchase from their store. The fees are paid to the card-issuing bank to cover handling costs, fraud and bad debt costs and the risk involved in approving the payment.
</p>
<h4>How are interchange fees charged to businesses?</h4>
<p>Card-issuing banks, payment processors (which may or may not be the issuing bank), credit card payment networks like MasterCard and Visa, <a href="https://www.bigcommerce.com/payments/" target="_blank">payment gateways</a>, and the merchant's own bank will all charge a percentage-based fee on every transaction, and these charges frequently appear as a single, bundled amount on the bills your payment processor hands you. Even this is something of an oversimplification, however, since <a href="https://www.bigcommerce.com/blog/payments-provider-101/">there are actually about 300 individual interchange fees composing the "single" interchange fee </a>you actually pay.
</p>
<h4>Interchange fees are not static</h4>
<p>Based on the costs of moving money, the time value of money in terms of current interest rates, and the relative risk involved, credit card companies set and regularly adjust their interchange rates. Visa and Mastercard, for example, <a href="https://www.cardfellow.com/interchange-fee/">change rates twice a year, in April and October</a>. While there are other fees that merchants pay for the privilege of <a href="https://www.bigcommerce.com/blog/how-to-accept-credit-card-payments-online/" target="_blank">making sales via credit and debit card</a>, interchange fees are by far the largest, representing 70% to 90% of the total fees paid to banks by merchants.
</p>
<h4>How interchange fees are calculated</h4>
<p>Interchange fees are determined by a large number of complex variables. To simplify the cost for merchants, credit card companies compute interchange into <strong>flat rate plus a percentage of the sales total (including taxes)</strong>. In the U.S. alone, billions of dollars are paid out by merchants to cover these fees every year, with the average rate coming out to about 2% of the purchase amount.
</p>
<h4>Transactional factors affecting interchange</h4>
<ul>
	<li><strong>Card      type: </strong>Debit cards with PINs have lower rates than credit      cards due to lower risk, and each credit card company will charge a      different rate. Rewards cards pay for the perks given to card holders by      charging higher interchange rates to businesses. The perks may, however, <a href="https://www.bigcommerce.com/blog/analytics-conversion-rate/" target="_blank">induce consumers to purchase more</a>.</li>
	<li><strong>Business      size and industry: </strong>Rates can vary by business type      &mdash; supermarkets, for example, pay more than do gas stations. Additionally,      larger merchants often have lower rates because they have enough      "clout" to successfully negotiate with banks/credit card      companies. </li>
	<li><strong>Transaction      type:</strong> POS (point-of-sale) transactions are less risky than      CNP (card-not-present) since the chip can be scanned, a signature taken or      a PIN entered. Both MOTO (mail-order-telephone-order) and online orders      are classed as CNP and charged a higher interchange rate.</li>
</ul>
<h4>Interchange fees are a part of doing business</h4>
<p>Any business that allows customers to make purchases with credit/debit cards will have to pay interchange fees. While no online retailer likes to see potential profits deducted from a sale, the net gain from <a href="/essentials/features/manage/accept-payments/" target="_blank">accepting credit/debit cards</a> far outweighs the cost of interchange fees.
</p>
<p><br> <em><strong>Learn more about <a href="https://www.bigcommerce.com/paypal-rates/">pre-negotiated PayPal rates from Bigcommerce</a>.</strong></em>
</p>

Learn how interchange is calculated — and how you can save.

What are interchange fees and how are they calculated?

<p><strong>Definition: </strong>Credit card authorization is an approval from a card issuer, usually through a credit card processor, that the customer has sufficient funds to cover the <a href="https://www.bigcommerce.com/blog/how-to-accept-credit-card-payments-online/" target="_blank">cost of the transaction</a>. It can also refer to the procedure of acquiring that authorization from the issuer.</p>
<h4>How does online credit card authorization work?</h4>
<p>Authorization is the first step when purchasing goods or services. The merchant sends a request to <a href="https://www.bigcommerce.com/blog/payments-provider-101/" target="_blank">their acquirer</a>, also called a credit card processor &mdash; <a href="https://www.bigcommerce.com/blog/paypal-express-checkout-in-context-one-touch/" target="_blank">PayPal, for example</a>. The acquirer then submits a request to the credit card issuer.</p>
<p>The issuer reviews the customer's account and decides if enough funds exist to cover the cost of the sale. If they do, an authorization hold is made which reduces the customer's credit line for the amount of the sale. An authorization code is sent to the acquire, who responds to the merchant with a code for approval or error code. When an error code is issued, the transaction is incomplete. </p>
<h4>Is money transferred during authorization?</h4>
<p>In online payments, the actual money transaction is handled by a process called "Capturing." Authorization is the acknowledgement of available funds, and it places a hold on those funds. In many cases with online acquirers, the capturing phase is usually accomplished automatically after the authorization.</p>
<h4>How can authorizations fail?</h4>
<p>Authorizations can fail for technical or financial reasons. Buyers are notified of failures automatically by most online processors. The cause of an authorization failure is identified by its error code. Error codes will differ based on acquirer. The most important point is that a failed authorization means a sale can not be completed. The seller should not <a href="https://www.bigcommerce.com/blog/ecommerce-shipping/" target="_blank">ship the product</a> or complete the transaction without an authorization code.</p>
<p>If the error code indicates a technical problem then it is usually the seller's job to fix the issue. In rare cases, the acquirer will be having technical issues and the seller will have to wait until these are fixed. In most cases, there is a problem with the information being supplied to the processor. This can be an issue with the configuration or the online submission, such as an incorrectly typed or missing value. In this case, the seller should fix the problem as soon as possible. Error codes indicating financial reasons usually mean there is a problem with the buyer's account.</p>

Find out what goes on behind the scenes when a customer clicks "Pay Now."

How Credit Card Authorization Works

<p style="margin-top:3%;"><strong>Definition:</strong> Chargebacks are a form of consumer protection where a card company or bank requests a charge from a merchant to be reversed. Chargebacks can result from unintentional mistakes or malicious intentions, and merchants can be subject to penalties if chargebacks exceed a defined threshold.</p>
<h4>Safeguard for online shoppers</h4>
<p>Chargebacks protect consumers from fraudulent charges, acting as a last line of defense that prevents them from being financially responsible for any unapproved withdrawal of funds. Though the purpose of chargebacks is to prevent deliberate acts of fraud &mdash; such as purposefully overcharging or making additional withdrawals &mdash; they can also result from a simple miscommunication.</p>
<p>For example, a customer can dispute a charge because they didn't understand that shipping was not included in the base price. These types of chargebacks can typically be resolved between the merchant and customer, but some consumers choose to go directly to their bank. </p>
<h4>The chargeback process</h4>
<p>Whether a customer makes an inquiry to their credit card company to have charges reversed due to fraudulent purchases, not receiving their order or receiving goods that are unsatisfactory, the process is the same. The chargeback process can be lengthy involving many steps and investigation. The key steps are highlighted below:</p>
<ol>  <li><strong>Submit:      </strong>The consumer files a complaint with the card issuer or      bank.</li>  <li><strong>Vet: </strong>The      issuing bank determines whether or not there is validity to the consumer      complaint. If so, they will then initiate the chargeback process by      notifying the merchant's bank.</li>  <li><strong>Investigation:      </strong>The merchant's bank researches the purchase in question      and notifies the retailer. The bank will speak to the merchant and ask for      transactional evidence to validate the purchase. </li>  <li><strong>Decision:      </strong>After the investigation, if the chargeback is found to      be justified, the online retailer is responsible for the amount of the      claim plus associated fees      that vary by bank and can range anywhere from $50 to $75 or more with      the chargeback. If the merchant provides evidence of a valid transaction,      there is no chargeback issued. </li> </ol>
<h4>How to prevent and limit chargebacks</h4>
<p>Chargebacks rightfully give consumers a means to dispute unlawful and dishonest charges. However, even the most reputable online retailers still receive chargeback requests from genuine mistakes and miscommunications. </p>
<p>There are ways to limit the number of chargebacks and prevent unauthorized use of cards by watching out for red flags such as:</p>
<ul>  <li>Bulk orders - orders      which seem to be outside of normal order quantities</li>  <li>Orders for big-ticket      items - properly vet new customers ordering one item that has significant      dollar value</li>  <li>Multiple orders within a      short time frame - multiple orders from one customer in a short time frame      may signify unauthorized card use</li>  <li>Different delivery and      billing addresses - may be valid but warrants further scrutiny to ensure      card authorization</li>  <li>New customers demanding      overnight or rush delivery of big-ticket items - a validity check ensures      validity of card use</li>  <li>Purchases made with      numerous tries on the credit card number or expiry date - may signify that      the card is not on hand which may be an indication of fraudulent activity</li></ul>

Chargebacks can derail an online business — find out how to reduce them.

What are chargebacks - and how to reduce them

<p style="margin-top:3%;"><strong>Definition:</strong> The Automated Clearing House, or ACH, is a batch processing system regulated by the non-profit National Automated Clearing House Association (NACHA) for all electronic funds transferred in the United States. The ACH has grown to support more than 90% of all electronic payments as more and more businesses conduct business online.</p>
<p><em><strong>Enabling ACH payment processing on the BigCommerce platform requires custom development. Contact a<a href="https://partners.bigcommerce.com/directory/search?f0=Expertise&f0v0=IT+integrator+and%2For+solution+provider&q=ACH"> development partner</a> to learn how to add ACH processing to your store.&nbsp;</strong></em><br></p>
<h4>Benefits for Retailers</h4>
<p>By processing payments through ACH, online retailers have greater control over payments and are able to increase payment accuracy, improve forecasting and access funds with greater speed and visibility. With ACH, payments are usually processed within one to two business days and many can be processed on the same day. This allows retailers to ship items faster.</p>
<p>With the ability to process orders more quickly, ecommerce merchants also maintain customer retention. Customers are more likely to return to a particular online store that they can rely on to safely take their payment information and ship their items in a relatively short time frame.</p>
<h4>Benefits for Consumers</h4>
<p>One of the most frequent reasons given by consumers for not purchasing online is the fear of personal information falling into the wrong hands. The NACHA is committed to providing a secure way to purchase online through ACH payment processing.</p>
<p>In addition to secure transactions, online shoppers receive their purchases faster. There is nothing worse than ordering an item and having to wait weeks for it to arrive. With ACH payments being processed so quickly, many items are able to be shipped within one to two business days.</p>
<h4>Transactions Processed Through ACH</h4>
<p>If a Unites States retailer is conducting business online, chances are the payments they make and receive are being processed through ACH. The ACH processes two types of transactions that can be further broken down into the following categories:</p>
<h4></h4>
<h5>Payments:</h5>
<ul><li><strong>Direct      deposit</strong> - a wide variety of consumer payments including      payroll</li>  <li><strong>Cross-border</strong> -      payments to Canada, Mexico, Panama and parts of Europe</li>  <li><strong>Trade</strong> -      payments to suppliers via CCD+ and CTX formats including payment details</li>  <li><strong>Tax</strong> -      payments to local, state and federal government agencies</li> </ul>
<h5>Receipts:</h5>
<ul>  <li><strong>Consumer      debit</strong> - one time and recurring payments from consumers      including membership fees and online purchases</li>  <li><strong>eCheck</strong> -      <a href="https://due.com/echeck/">purchases made via eChecks</a> are converted to ACH debits and transmitted      electronically for collection processing</li>  <li><strong>Corporate</strong> - payments      from suppliers via CCD+ and CTX formats, which also relays payment details      such as date, discount and invoice number</li></ul>

The ACH makes payment processing feasible for online merchants.

What is ACH? How Automated Clearing House affects online payment processing

<p><strong>Definition</strong>: The <a href="http://www.unece.org/cefact/edifact/welcome.html" style="font-size: 1rem; letter-spacing: 0px; background-color: initial;">Electronic Data Interchange for Administration, Commerce, and Transport</a> (EDIFACT), also called the United Nations Rules for Elec­tronic Data Interchange for Administration, Commerce and Transport (UN/EDIFACT), defines a set of internationally accepted rules and guidelines for the exchange of structured data between unconnected computer systems.<br></p>
<h4>Who is responsible for EDIFACT?</h4>
<p>EDIFACT is approved, maintained, and published by the <a href="http://www.unece.org/cefact.html">UN Centre For Trade Facilitation And E-Business</a> (UN/CEFACT). The rules are published in the United Nations Trade Data Interchange Directory (UNTDID).</p>
<h4>Are there rules governing the use of EDIFACT?</h4>
<p>The data rules in EDIFACT are accompanied by a code of conduct that governs the use of EDIFACT between the parties exchanging data. The code of conduct is called the <a href="http://Electronic%20Data%20Interchange%20for%20Administration,%20Commerce,%20and%20Transpor">Uniform Rules of Conduct for Interchange of Trade Data by Teletransmission</a> (UNCID). The rules outline the ways parties performing an interchange of data should behave including logs, data storage, content protection, acknowledgements, and confirmations.</p>
<h4>How does EDIFACT impact ecommerce?</h4>
<p>The Electronic Data Interchange for Administration, Commerce, and Transport provides a certain amount of assurance between two parties exchanging information that the data will be respected and interpreted correctly. This is especially important when commerce crosses international boundaries where law and custom may differ. EDIFACt ensures that the transport of information is system, platform, and country of origin agnostic.</p>
<h4>How does EDIFACT work?</h4>
<p>EDIFACT is a set of rules governing syntax, a definition set of accepted data tags, and a set of approved message types. The syntax rules describe how data is structured in a message, including issues such as nesting, acceptable character sets, and structures. Tags describe the types of data (measurements, sizes, etc.) and how they are represented. Message types, also called United Nations Standard Message types (UNSMs), bring the two together with messages such as a "Banking status message" or a "Bulk marine inspection summary report message."</p>
<h4>How are new UNSMs requested or existing ones changed?</h4>
<p>United Nations Standard Message types are managed by the Working Party on Facilitation of International Trade Procedures (WP.4). Data and procedure experts are nominated to the group by member nations or recognized organizations. Some members are UN/EDIFACT Rapporteurs (RT). RTs are nominated by a government then appointed by the WP.4. RTs are responsible for taking proposals through a multi-step draft process. If the proposal reaches the final draft stage then it is presented to the W.4 for approval.</p>

What is EDIFACT? Find out how these guidelines affect online retailing

<p style="margin-top:3%;"><strong>Definition:</strong> A Bank Identification Number, or BIN, works to protect both merchants and consumers in the online marketplace. Every credit or debit card contains a BIN, typically the first four to six numbers on a bank-issued card. These numbers easily identify the type of card being used, the geographic location of the card issuer and which bank or company issued the card.</p>
<p>BINs are also referred to as IIN (Issuer Identification Number), since not all cards are issued by banks. Institutions such as American Express issue cards that incorporate BIN data as well as many prepaid and virtual gift cards like <a href="/essentials/features/manage/accept-payments/paypal/" target="_blank">PayPal</a>, Walmart and netSpend. </p>
<h4>How BINs Work</h4>
<p>Every online purchase that requires a payment is completed through a two-step process: authorization and clearance. A BIN works to complete the first step in the payment process: authorization. The BIN identifies which issuer, typically a bank or credit card company, should receive the request for authorization to determine if the account or card is valid and whether the amount of the purchase is within available limits on the card.</p>
<p>The authorization process happens very quickly behind the scenes as numbers are checked against a third party service provider. For many ecommerce retailers, their payment processor handles BIN checks against BIN lists they manage or subscribe to.</p>
<h4>BINs increase the speed and safety of card validation</h4>
<p>BINs make the <a href="https://www.bigcommerce.com/blog/ecommerce-checkout-page-optimization/" target="_blank">checkout process smoother</a>, avoiding errors and increasing efficiency by adding another level of security and authentication to the checkout process. BINs perform many roles, including:</p>
<ul>  <li><strong>Help      to identify the purchaser </strong>by offering an additional      signal</li>  <li><strong>Confirm      inline validation</strong> by asking the customer to      <a href="https://www.bigcommerce.com/blog/how-to-accept-credit-card-payments-online/" target="_blank">enter their credit card number</a> as well as the type of credit card they are      using</li>  <li><strong>Ensure      compliance with export laws</strong> by identifying the      card-issuing country </li>  <li><strong>Protect      monthly payment programs</strong> by identifying prepaid credit      cards where only the first payment may be covered</li>  <li><strong>Save      time</strong> by validating whether or not a credit card is accepted      by a particular online merchant before sending for authorization</li> </ul>
<p>In addition to fraud protection, BINs have made shopping online a possibility for consumers by providing a secure payment process.</p>

BINs play a crucial role in secure payment processing.

What is a Bank Identification Number (BIN)?

<p style="margin-top:3%;"><img src="https://www-cdn.bigcommerce.com/assets/answers/google-wallet.jpg" style="float: left; margin: 0px 10px 10px 0px;">Google Wallet is a mobile payment system that acts as a virtual wallet, allowing users to make payments and transfer money straight from their phones. The service is free for users and can store credit, debit, gift and loyalty card information. Available to anyone with a newer Android or Apple smartphone, Google Wallet gives users another fast way to make payments at ecommerce stores that accept it.
</p>
<p>Mobile payments are a relatively new strategy that has the potential to greatly benefit online sales. Currently, mobile devices account for <a href="http://marketingland.com/mobile-drives-nearly-half-e-commerce-traffic-pc-still-rules-sales-report-118629" target="_blank">just under 50 percent of ecommerce traffic</a>, but when it comes time for users to purchase items online, nearly 77 percent of users do so exclusively on a personal computer instead. Customers avoid making actual purchases on mobile devices because of concerns about security and the inherent difficulty of entering bank card information using a touch screen interface.
</p>
<p>Electronic wallets look to sidestep these concerns by <a href="https://www.bigcommerce.com/blog/mobile-checkout-optimization/" target="_blank">streamlining the mobile payment process</a> via a secure service. Customers simply click to buy something and all of their payment info is already entered into the wallet. The fast checkout works both in-app and on participating mobile sites.
</p>
<p>Google Wallet also gives merchants the ability to highlight special offers or discounts from their websites or emails directly to the shopper via the app. Customers can also add any gift card balances to their virtual wallets, which helps drive additional sales. According to Forrester Research, payments made with Google Wallet and other services like it are expected to <a href="http://blogs.forrester.com/denee_carrington/14-11-17-us_mobile_payments_will_reach_142b_by_2019" target="_blank">top $140 billion by 2019</a>.
</p>
<h4>How it works</h4>
<p><strong></strong>Google Wallet is what is known as a server-side wallet, which means that all of a user's information is stored remotely on Google's system, rather than on the user's device. Transactions take place between Google's servers and the merchant's <a href="https://www.bigcommerce.com/payments/" target="_blank">existing payment processor</a>.
</p>
<p>It acts somewhat like a gift card: users place a set amount of money into the wallet they can then spend as desired. As far as the user's bank is concerned, the transaction is identical to any other debit or credit, only the transactions go exclusively through Google rather than the merchant's point of sale. Assuming the merchant's point of sale is configured to accept Google Wallet, transactions work the same as any other accepted payment method.
</p>
<p>While support for the mobile app is still sketchy, Google Wallet offers a physical card as well that can be used anyplace that accepts debit MasterCard.<br><br>How does Google Wallet stack up to other options?
</p>
<p>Google Wallet's main competitor is Apple, although other companies such as Samsung and PayPal have their own digital payment systems as well (Samsung Pay and PayPal Wallet, respectively). While the products may have a few differences when it comes to the user, they offer similar features from the perspective of an online store owner. Both want to make it as easy as possible to facilitate transactions.
</p>
<ul>
	<li>Neither charge fees.</li>
	<li>Liability rules are the same as regular card transactions.</li>
	<li>Both can support rewards programs.</li>
	<li>Both make the purchasing process much faster.</li>
	<li>Both utilize NFC (near field communications) for in-store purchases.</li>
</ul>
<p>The main difference between the two initiatives is the <a href="http://thefinancialbrand.com/50720/mobile-payments-digital-wallet-analysis/" target="_blank">companies behind them</a>. Google pioneered NFC technology years ago, which allowed users to pay with a mobile device at a point of sale using a secure, short-range signal. However, the technology was not widely adopted at the time, which put Google on the back foot, giving Apple an opening to push <a href="https://www.bigcommerce.com/blog/apple-pay-tips-mobile-payments/" target="_blank">their Apple Pay model</a>.
</p>
<p>Apple, having an established and loyal user base, was able to roll out its system a great deal more effectively, coupling it with specific technology offerings, such as the Apple Watch. Seeing an opportunity to partner with the high-prestige Apple brand, retailers and banks have been a great deal more eager to adopt the technology now.
</p>
<p>Google, however, is retooling its wallet to take advantage of their more flexible and open system. Unlike Apple, Google is allowing other developers <a href="http://www.androidpolice.com/2015/03/02/sundar-pichai-briefly-confirms-android-pay-at-mobile-world-congress/" target="_blank">access to its API</a> in hopes that other companies will create innovative new ways to use the technology. <a href="http://9to5mac.com/2014/10/31/android-vs-ios-market-share-3q-2014/" target="_blank">With 80 percent of global market share</a> for the Android platform, payment processors and merchants have good reason to support Google's initiatives.<br>When compared with other virtual wallets, Google Wallet and Apple Pay stand above most for online transactions. The focus of many other virtual wallets is in-store purchases. Most of them, like Samsung Pay, can only process offline purchases and PayPal Wallet is not widely supported.
</p>
<h4>What ecommerce merchants need to know</h4>
<p><strong></strong>Google Wallet is becoming more popular, which means more people are going to expect it at their favorite stores.&nbsp;Ecommerce business owners should consider offering&nbsp;<a href="https://due.com/digital-wallet/">digital wallets such as Google Wallet</a>, which provide shoppers with more payment options. While there are several other options out there, Google Wallet and Apple Pay are most likely going to be the big players in the future. According to The New York Times, both services keep adding more features in the hopes that their virtual wallets will catch on quicker. For instance, Google's open API will allow financial institutions to <a href="http://thefinancialbrand.com/50720/mobile-payments-digital-wallet-analysis/" target="_blank">integrate their mobile banking apps</a> with Google Wallet, thereby giving their customers direct access to new rewards programs.
</p>
<p>Google Wallet was initially released in 2011, and Apple Pay has only been in existence since 2014, so the mobile wallet industry is still in its infancy. Both companies are jockeying for position in a fragmented marketplace. Consumers, meanwhile, are hesitant to adopt either wholeheartedly. Yet, as <a href="https://www.bigcommerce.com/blog/smartphones-change-the-way-consumers-shop-have-you-adapted/" target="_blank">mobile devices become more ubiquitous</a> to everyday life, their role in commerce is inevitable.<br>"They want to be as disruptive to payments as Amazon has been to retail," Sucharita Mulpuru, a retail and payments analyst for Forrester Research, told The New York Times. "By being early, they can shape the customer experience and expectations."
</p>
<p>The Times points out that the reason virtual wallet adoption is still fairly low is because debit and credit cards have almost universal acceptance with merchants and customers. For this reason, Google and Apple are both racing to discover some innovation to give virtual wallets a clear and distinct advantage which bank cards cannot offer. Neither one has yet found that tipping point.
</p>
<h4>The limitations of Google Wallet</h4>
<p><strong></strong>According to Business News Daily, Google is <a href="http://www.pymnts.com/news/2015/google-wallet-adds-new-features/#.Vdy-QJfYH3A" target="_blank">discontinuing the processing of payments</a> for certain digital goods such as e-books, subscriptions, online games and music. They are, however, hoping to expand Google Wallet's influence on ecommerce with increased support for physical goods merchants.
</p>
<p>In conclusion, Google Wallet isn't yet the best payment option for ecommerce; but as time goes on, it is likely to become a viable and even essential financial service. In The Economist, Jennifer Schulz, Visa's global head of ecommerce, thinks that there will be a period of time where virtual wallet companies will pop up and then fail, eventually leaving a few wallet providers left. While there is no way to predict which virtual wallets will endure, there's a good chance Google Wallet will be one of them.
</p>

Google wallet

Google Wallet is a mobile payment system that acts as a virtual wallet, allowing users to make payments and transfer money straight from their phones.

What is Google Wallet and what does it mean for ecommerce?

<p style="margin-top:3%;"><img src="https://www-cdn.bigcommerce.com/assets/answers/Chipbased-cards.jpg" style="float: left; margin: 0px 10px 10px 0px;">Europay, MasterCard and Visa technology is making its way to the mainstream in the U.S. On Oct. 1, 2015, the payment processing industry will undergo a liability shift for all of the parties involved in a customer transaction. The group that isn't compliant with the new industry guidelines will be responsible for any financial ramifications of a data breach.
</p>
<h4>What is EMV technology?</h4>
<p><strong></strong>EMV technology is based on chip-and-PIN systems, which uses encrypted data to complete a payment. EMV chip-based cards have an embedded microchip on the face of the card, which customers use to dip into a payment processing terminal to complete a transaction. The payment information is stored on the embedded microchip and temporarily transferred to the terminal and then to the processor and card company to finalize the payment.
</p>
<p>EMV technology is already well-established in most other developed countries but currently lags in the U.S. However, merchants and retailers are beginning to adopt EMV technology for their in-store terminals and online payment gateways to better fight against credit card fraud. The embedded microprocessor will become a part of all new debit and credit cards after the Oct. 1 deadline, with some companies requiring a PIN number or signature from the shopper to complete a transaction.
</p>
<h4>How does EMV protect against fraud?</h4>
<p><strong></strong>The new chip-based cards protect well against credit card fraud because of their inherent security measures. EMV uses a technology called point-to-point encryption, which assigns sensitive information unique characters. In doing so, hackers won't be able to turn around and use illegally obtained information since the encrypted data is rendered useless after each individual transaction at the point of sale.
</p>
<p>Currently, merchants in the U.S. are using the magnetic stripes to process payments. Magnetic stripes today contain static data, making it easier for hackers to illegally obtain sensitive payment information from customers' cards. EMV differs in that the microchip encrypts data uniquely each time a transaction is made. Even if a hacker were to obtain sensitive customer information, the data is rendered useless because it is unique to that payment.
</p>
<h4>Online fraud and EMV</h4>
<p><strong></strong>EMV also helps with card-not-present fraud, which is beneficial for your <a href="/blog/payment-gateways/">ecommerce payment gateway</a>. Since the card is not physically present at the point of sale online, cybercriminals have traditionally been able to make fraudulent payments with illegally obtained information. While online payments and EMV aren't 100 percent compatible, there are solutions that your ecommerce business should look into before the upcoming deadline.
</p>
<p>The technology for online EMV is already in place, it's just up to you to figure out which makes the most sense for your business. More specifically, MasterCard offers a Chip Authentication Program, while Visa offers Dynamic Passcode Authentication. Both of these solutions require an extra step in the transaction process and ensure the payment is authentic.
</p>
<h4>What does EMV mean for ecommerce?</h4>
<p><strong></strong>If you own and operate an ecommerce store, EMV may not directly correlate to your online payment gateway. Since EMV is used to protect point-of-sale or card-present transactions, it's mainly focused on in-store payments. However, as card-not-present payments continue to grow and the market value of ecommerce rapidly matures, EMV technology may open up the doors for a number of new and improved online security measures for your ecommerce business.
</p>
<p>In addition to MasterCard and Visa's passcode authentication and chip authentication programs, 3D secure controls provide an added level of protection for your ecommerce transactions. When a customer makes a transaction online, they are redirected to the issuer's website and have to enter a passcode to authenticate the payment. Consumers are required to set up a passcode with their issuing bank, so you may want to encourage your clients to do that to ensure a more secure transaction.
</p>

Chipbased cards

Europay, MasterCard and Visa technology is making its way to the U.S.

What is EMV?

<p><img src="https://www-cdn.bigcommerce.com/assets/answers/facebook-payments.jpg" style="float: left; margin: 0px 10px 10px 0px;">In March, <a href="https://www.bigcommerce.com/blog/facebook-advertising-guide/" target="_blank">social media giant Facebook</a> officially announced it was going to launch a new payment service through its messenger application. Users can now send friends money through the app for no cost after entering an optional PIN or touch ID for extra layers of protection.
</p>
<h4>What are Facebook payments?</h4>
<p><strong></strong>Current Facebook users can link their debit card to the messenger app's settings section and send mobile peer-to-peer payments to their friends by striking up a conversation. Once two friends engage in dialogue, a "$" icon will appear above the keyboard. All users have to do is enter the amount they wish to transfer and select the pay option.
</p>
<p>Facebook payments users can also fund and complete transactions to third-party companies that advertise on the platform as well. Once the payment is successfully processed, Facebook transfers the value of the transaction to the developer offering the content the consumer wishes to purchase.
</p>
<p>Users can only enter their debit card information because the company said it wanted to minimize and avoid fees as much as possible. Similar to bank transactions and deposits, payments could take up to three business days to go through. Facebook is looking to explore the popular <a href="https://www.bigcommerce.com/blog/mobile-checkout-optimization/" target="_blank">mobile payments space</a> and keep users on its site longer. According to its F8 developers conference in March, its messenger app was used by 600 million people worldwide (1).
</p>
<h4>What does this mean for ecommerce businesses? </h4>
<p><strong></strong>For one, Facebook payments provide a <a href="https://www.bigcommerce.com/blog/direct-to-consumer-hyphen/" target="_blank">direct link for your ecommerce business to the consumer</a>. Since their debit card information is already linked to the platform, the payment is seamless and easy to use. Facebook is already a major advertising platform, and now that users can link their payment information to the social media outlet, they can make purchases more quickly and easily than ever before.
</p>
<p>In addition to creating a seamless payment funnel for consumers, Facebook payments also open up a world of opportunities for its advertisers. Facebook already sells individuals' personal information to companies that market on its platform, and it's likely your ecommerce business can obtain individual card numbers and purchase history as well. By getting this information, your online business can better optimize its outreach to consumers, sending more relevant messaging and offers. This type of customized marketing approach may gross higher bottom-line gains as a result.
</p>
<p>1. "<a href="http://www.businessinsider.com/what-millennials-think-of-facebook-and-facebook-messenger-2015-3">We talked to 2 dozen millennials about Facebook and its new Messenger platform - here's what they told us</a>"
</p>

Facebook payments

In March, social media giant Facebook officially announced it was going to launch a new payment service through its messenger application.

What are Facebook payments?

<p>If you have an ecommerce website, selecting your payment process is one of the most critical decisions you’ll make for your business. Allowing your customer the option to pay by credit or debit card requires that you have a payment processor. A payment processor is a company that acts as a mediator, moving money from your customer’s bank account or credit card to your bank account.&nbsp;<br></p>
<p>Ecommerce is enjoying a high that is expected to outlast the pandemic. With brick and mortar stores closing down due to the lockdown, people are even doing their groceries online. You might have heard of click and collect or bopis.
</p>
<p><a href="https://www.brightpearl.com/order-fulfillment/buy-online-pickup-in-store" target="_blank">What is bopis</a>? It’s an online payment system where consumers can ‘buy online and pick up in store’. With all retail needs being met online, the already vast payment processing market is growing too.
</p>
<p>Choosing the right payment processor is critical because there are many market players to choose from, and pricing is also a factor. You need to select a suitable payment gateway to support your <a href="/articles/ecommerce/shopping-cart-software/" target="_blank">shopping cart software</a> and fulfill your business needs.
</p>
<h2>What Does a Payment Processor Do?</h2>
<p>A payment processor authorizes payments and processes them for your online store. The <a href="https://processbliss.com/what-is-process-mapping-and-how-does-it-benefit-your-business/" target="_blank">process mapping</a> for the payments to be handled securely includes several steps that are the responsibility of the payment processor:
</p>
<p>1.<span class="Apple-tab-span">	</span>It will verify the customer’s billing information, i.e., validate credit card details.
</p>
<p>2.<span class="Apple-tab-span">	</span>It makes sure the right amount of funds are available and authenticates funds for each payment.
</p>
<p>3.<span class="Apple-tab-span">	</span>It approves payment requests. The order confirmation number is made available after this step.
</p>
<p>4.<span class="Apple-tab-span">	</span>It approves transactions and transfers funds to your merchant account and then your bank account.
</p>
<p>All these transactions need to take place in an encrypted payment processor server, so your customer’s sensitive bank account or credit card details are secure. A merchant account is a temporary holding account that receives the payments from the customer’s bank.
</p>
<h2>The Top Factors to Consider</h2>
<h3>1. Keep costs as low as possible.</h3>
<p>The payment processor offering the lowest prices isn’t necessarily the best partner to have. Cost still remains a critical aspect because we all want to keep overheads as low as possible. The following costs are involved with payment processing for every transaction. This is in addition to a monthly and set up fee.
</p>
<p>· &nbsp; &nbsp; &nbsp; &nbsp; Interchange: The fee your customer’s bank charges.
</p>
<p>· &nbsp; &nbsp; &nbsp; &nbsp; Assessment: The credit card association also charges a pre-negotiated percentage fee.
</p>
<p>· &nbsp; &nbsp; &nbsp; &nbsp; Markup: The percentage charged by the merchant bank.
</p>
<p>· &nbsp; &nbsp; &nbsp; &nbsp; Processing: The fee charged by the payment processor.
</p>
<p>Keep all of the above fees and charges in mind before you make your decision. Your decision should also depend on the volume and value of your transactions. If you have high-value transactions, look for a payment processor that charges a set monthly fee and low transaction fee. Remember to watch out for hidden fees.</p>
<h3>2. Provide multiple payment options to boost your sales.</h3>
<p>Your payment processor should let you pick the types of services you would like to offer your customer without restriction. By providing multiple <a href="https://www.bigcommerce.com/blog/ecommerce-payment-processing/">e-commerce payment</a> options, you extend your reach, and every prospective customer will be able to find a service to match their preference. In the interest of <a href="https://mailshake.com/blog/sales-enablement/" target="_blank">sales enablement</a>, having multiple payment options is an effective tool to boost customer interactions.
</p>
<p>If a customer isn’t keen to use their credit card online, having the option of debit or bank transfer will increase their chances of completing an order. Many people don’t even have a credit card, so not catering to that sector of the market means losing out on a sizable amount of customers.</p>
<h3>3. Secure your site against fraud.</h3>
<p>Credit card fraud is rampant. It’s a severe concern for you and your customers. When choosing a payment processor, have a look at the fraud protection services they offer. Find a secure and reliable service that flags and denies risky transactions. Data should be encrypted during the transaction, and any data stored should be encrypted as well.
</p>
<p>Financial information is sensitive, and there is no coming back from a data breach. The security of your payment gateway is the payment processors’ responsibility, so hire one who adheres to the highest data security standards. To avoid any fraudulent transactions, ensure your payment processor has fraud detection screening tools on the menu.
</p>
<h2>Other Factors&nbsp;</h2>
<p>An e-commerce business can present many challenges, whether in <a href="https://www.brightpearl.com/inventory-management-system/retail-inventory-management" target="_blank">retail inventory management</a>, web design, or payment processing. Each facet of an online business is complicated. Find a payment processor that, along with the above, gives you fast access to your funds, provides round the clock customer service, and is honest and helpful.
</p>
<p>Compare a few payment processors and choose the one with the expertise and support you need for your online transactions. The right payment processor can make a world of difference for your ecommerce business.&nbsp;&nbsp;</p>

Payment processor

Arguably the most exciting aspect of starting an online business is accepting that first payment on the product or service you're looking to publicly solicit.

How to choose a payment processor

<p><img src="https://www-cdn.bigcommerce.com/assets/answers/PayPal-is-an-easy-way-to-accept-credit.jpg" style="float: left; margin: 0px 10px 10px 0px;"><a href="/essentials/features/manage/accept-payments/paypal/">PayPal</a> is an all-in-one online payment solution that is both a merchant account and payment gateway. Established in 1998 and owned by eBay Inc., PayPal was one of the first companies of its kind devoted to digital payments. Its solutions can make set-ups quicker and easier and allow any merchants to <a href="https://www.bigcommerce.com/payments/" target="_blank">accept credit cards</a> in their ecommerce store. Due to its ease of use for customers, simple setup for merchants, the ability to transact in 100+ currencies, PayPal is the most popular online payment solution in the world with over 325 million active customers.
</p>
<h4>Costs</h4>
<p><strong></strong>There are no set-up or cancelation fees, so merchants can switch to a different payment processor at any time. PayPal charges a flat rate and transaction fee, dependent on the volume of payments your business processes. <strong>PayPal charges between 2.2 and 2.9 percent of the total transaction, plus $0.30 per transaction.</strong> This fee structure is the same regardless of what type of credit card the buyer is using. In contrast, traditional merchant accounts can be more complex. Different cards may have different fees and security requirements, increasing the complexity for both merchants and paying customers.
</p>
<h4>Checkout features</h4>
<p><strong></strong>Adding PayPal to an app, web and mobile site can help improve checkout conversion. With PayPal One Touch, customers can bypass guest checkout pages to avoid entering billing and shipping information, turning a multi-screen checkout process into an express lane on most devices&mdash;smartphone, tablet or desktop.
</p>
<p>When customers are taken to the PayPal gateway, they are able to complete transactions very quickly if they already have an account. If not, they enter their credit card information as they would with any other payment gateway. The customer submits the payment, and after subtracting the fees, PayPal deposits the money into the merchant's account.
</p>
<h4>Payment security</h4>
<p><strong></strong>Another reason for the popularity of PayPal is its security features. The platform does not send customer data to merchants after a transaction, reducing the possibility of a breach. Transactions also receive 128-bit encryption, fraud screening and address screening.
</p>
<p>In addition, merchants that just use PayPal to process payments don't need to worry about Payment Card Industry Data Security Standard because they won't be retaining customer information - it stays with PayPals' platform. All transactions on the site take place on pages that utilize Secure Sockets Layer.</p>

Pay Pal is an easy way to accept credit

PayPal is an all-in-one online payment solution that is both a merchant account and payment gateway.

How does PayPal work?

<p><img src="https://www-cdn.bigcommerce.com/assets/answers/payment-fraud.jpg" style="float: left; margin: 0px 10px 10px 0px;">Payment fraud is any type of false or illegal transaction completed by a cybercriminal. The perpetrator deprives the victim of funds, personal property, interest or sensitive information via the Internet.
</p>
<p>Payment fraud is characterized in three ways:
</p>
<ul>
	<li>Fraudulent or unauthorized transactions</li>
	<li>Lost or stolen merchandise</li>
	<li>False requests for a refund, return or bounced checks</li>
</ul>
<p>Ecommerce businesses rely on electronic transactions to charge customers for products and services. The increased volume of electronic transactions has also resulted in an increase in fraudulent activities.
</p>
<h4>What types of fraud are there?</h4>
<p><strong></strong>There are multiple methods of payment fraud:
</p>
<ul>
	<li><strong>Phishing:</strong> Any emails or websites that require personal or private information such as <a href="https://www.bigcommerce.co.uk/blog/how-to-accept-credit-card-payments-online/" target="_blank">credit card</a>, bank account or login credentials are prone to phishing. If the source is trusted, such as a partner with a bank, the website is trustworthy. However, if the source is unfamiliar, it could indicate an attempt at stealing information.</li>
	<li><strong>Identity theft:</strong> Identity theft exists outside of the digital realm as well, but it's a common type of fraud online. A cybercriminal who steals personal information and uses it under false pretense is engaging in identity theft. Hackers penetrate firewalls through old security systems or by hijacking login credentials via public Wi-Fi.</li>
	<li><strong>Pagejacking:</strong> Hackers can reroute traffic from your ecommerce site by hijacking part of it and directing visitors to a different website. The unwanted site may contain potentially malicious material that hackers use to infiltrate a network security system. Ecommerce business owners must be aware of any suspicious online activity in this capacity.</li>
	<li><strong>Advanced fee and wire transfer scams:</strong> Hackers target credit card users and ecommerce store owners by asking for money in advance in return for a credit card or money at a later date. </li>
	<li><strong>Merchant identity fraud:</strong> This method involves criminals setting up a merchant account on behalf of a seemingly legitimate business and charging stolen credit cards. The hackers then vanish before the cardholders discover the fraudulent payments and reverse the transactions. When this happens, the payment facilitator is liable for the loss and any additional fees associated with <a href="https://www.bigcommerce.co.uk/blog/minimize-disputes-and-chargebacks/" target="_blank">credit card chargebacks</a>.</li>
</ul>
<h4>How does fraud happen?</h4>
<p><strong></strong>Fraudsters have become savvy at illegally obtaining information online. Hackers often pose as a legitimate representative and contact credit card owners asking for sensitive information, then use the following means of interaction to steal personal data:
</p>
<ul>
	<li>Email</li>
	<li>Texting malware to smartphones</li>
	<li>Instant messaging</li>
	<li>Rerouting traffic to fraudulent websites</li>
	<li>Phone calls</li>
	<li>Online auctions</li>
</ul>
<p>Cyberthieves also work in teams to penetrate network security systems by looking for glitches or patches that haven't been updated in awhile. These gaps give hackers access around a firewall and make it easy to illegally obtain sensitive information.
</p>
<h4>How can ecommerce businesses mitigate fraud?</h4>
<p><strong></strong>While it's challenging to entirely eliminate the threat of fraud for ecommerce stores, you can help protect against it by continually updating your network security systems. Firewalls and antivirus software are designed to act as a shield against hackers' attempts to penetrate <a href="/essentials/features/manage/secure-web-hosting/" target="_blank">a secure network</a>. Constantly updating software helps ensure that your sensitive business information is safe.
</p>
<p>There are a number of other ways to protect your business against fraudulent payments:
</p>
<ul>
	<li>Maintain awareness of the latest fraud trends</li>
	<li>Partner with a verified payment processor</li>
	<li>Encrypt transactions and emails containing confidential information</li>
	<li>Ensure that tokens and login credentials are regularly changed</li>
	<li>Establish a policy regarding access to confidential information</li>
	<li>Constantly run security checks with antivirus software</li>
	<li>Require customers to log in to an individual account prior to making a purchase</li>
</ul>
<p>Payment fraud can hurt both you and your customers. By aggressively <a href="https://www.bigcommerce.co.uk/blog/protect-your-online-store-fraud/" target="_blank">protecting your ecommerce store against fraud</a>, you can improve your reputation and your bottom line.
</p>

Payment fraud

Payment fraud is any type of false or illegal transaction completed by a cybercriminal.

Payment fraud: What is it and how it can be avoided?

<p><img src="https://www-cdn.bigcommerce.com/assets/answers/Ecommerce-businesses.jpg" style="float: left; margin: 0px 10px 10px 0px;">Ecommerce businesses must accept credit cards as forms of payment. Online store owners are free to choose which credit cards shoppers can use. This decision is entirely up to the business owner and needs to be based on thorough research and financial status. There are perks to accepting certain cards and drawbacks to accepting others.
</p>
<h4>Merchant accounts and payment gateways</h4>
<p><strong></strong>First and foremost, ecommerce businesses need a merchant account and a payment gateway to accept credit card payments online (1). Banks provide enterprises with merchant accounts after business owners apply for them, similarly to loans. The bank then extends a line of credit to the company. There are often initiation and monthly fees associated with merchant accounts.
</p>
<p>Payment gateways are corporations that <a href="/blog/payment-gateways/">handle online transactions and credit card payments</a>. They connect the buyer's bank account to the business's merchant account. Ecommerce businesses need both to accept credit cards. Payment gateways often charge monthly fees, as well.
</p>
<p>In fact, fees are the biggest determining factor for ecommerce shop owners when deciding which credit cards to accept.
</p>
<h5>Visa and MasterCard</h5>
<p><strong></strong>Visa and MasterCard are widely accepted, and it is highly recommended that ecommerce businesses allow customers to use these cards as forms of payment. These two corporations are credit card processors (2). They do not issue cards directly. They work with a variety of banks to offer users debit cards, credit cards and checking accounts sponsored by the Visa and MasterCard brands. These companies make money on transactions carried out with their sponsored cards. During a credit card transaction, Visa and MasterCard work with acquiring banks, issuing banks and the network connecting the two to complete payments.
</p>
<p>The good thing about accepting Visa and MasterCard is that their per-transaction fees, which are small amounts of money charged to the ecommerce merchant, are typically lower than other credit cards. They usually charge vendors about 2 percent of the transaction price.
</p>
<h5>American Express and Discover</h5>
<p><strong></strong>American Express and Discover are two credit cards that are accepted less frequently than Visa and MasterCard. These are premium rewards cards that fall into a more exclusive card bracket.
</p>
<p>Amex and Discover are card issuers. They do not partner with banks to provide consumers with credit cards, debit cards or checking accounts. The cards these corporations offer are marketed directly to people and businesses. Amex and Discover card holders are typically more secure in their finances and the scope of people with these cards is much narrower than Visa and MasterCard.
</p>
<p>Amex and Discover also charge higher per-transaction fees. Merchants are charged closer to 2.89 percent each time a consumer with an Amex card makes a purchase. This increase can add up to great sums over time and makes a big difference for ecommerce business owners.  If an ecommerce business wants to include Amex card holders in their consumer pool, a monthly fee may be a possibility (3). This way, vendors only pay a flat rate, as opposed to per-transaction fees.
</p>
<p>In addition, Discover is very loyal to its customers and provides them perks that may be detrimental to merchants. For instance, they offer full refunds on items up to $500, which could potentially have a negative impact on business owners.
</p>
<h5>Additional fees</h5>
<p><strong></strong>It's important to note that credit card processing fees can fluctuate and come from unexpected places. Debit and credit card processing fees may vary, even if the card processor is the same. Whether a merchant enters a card number manually or swipes it through a machine can affect the fees associated with the transaction.
</p>
<p>1. <a href="http://www.entrepreneur.com/article/234131" target="_blank">"Accepting Credit Cards and PayPal on Your Ecommerce Site"</a>
</p>
<p>2. <a href="http://www.gobankingrates.com/credit-cards/why-american-express-discover-credit-cards-not-accepted-everywhere/" target="_blank">"Why Aren't American Express and Discover Cards Accepted Everywhere?"</a>
</p>
<p>3. <a href="http://www.foxbusiness.com/personal-finance/2013/02/04/which-credit-cards-should-your-small-business-accept/" target="_blank">"Which Credit Cards Should Your Small Business Accept?"</a>
</p>

Ecommerce businesses

Ecommerce businesses must accept credit cards as forms of payment.

How to choose which credit cards to accept in ecommerce

<p dir="ltr">At its heart, ecommerce is where any electronic transaction takes place. Any type of payment that is processed online can be considered a form of ecommerce. </p>
<p dir="ltr">Many in the business world would place an additional qualifier on the definition of ecommerce. They necessitate that the electronic buying and selling of goods is the main component of any business model for those in ecommerce. </p>
<p dir="ltr">This definition applies to those who think big and wish to replace brick-and-mortar stores like Walmart or for niche businesses that solely deliver a digital product or service.</p>
<h2 dir="ltr">What are the Benefits of Ecommerce?</h2>
<h3 dir="ltr">It makes it easier to reach a global market.</h3>
<p dir="ltr">An online presence is the only way for any business to maximize its reach. While a website and social media can be great for increasing brand awareness, it’s transactions that generate revenue. Adding online purchasing to your business model ensures that you can generate new leads from anywhere in the world with a network connection.</p>
<p dir="ltr">Speaking of social media, many platforms have become privy to the ways of the world. Channels like Instagram have added a checkout option and Shoppable Stories so users can make purchases without even having to leave the platform. Ecommerce also works synergistically with tools like <a href="https://affise.com/blog/referral-software/">referral program software</a> that can organically grow your customer base. </p>
<h3 dir="ltr">It does business around the clock.</h3>
<p dir="ltr">Brick-and-mortar stores have operating hours. Even those that are 24/7 still need to be staffed around the clock. Ecommerce presents an easy path for even the smallest businesses to offer a 24/7, 365-day shopping experience for their customers. </p>
<p dir="ltr">This means you won’t miss out on sales from odd hours, holidays or simply because getting to a physical store isn’t conducive to one’s schedule. </p>
<h3 dir="ltr">It minimizes costs.</h3>
<p dir="ltr">Building an ecommerce website is cheaper than the upfront investment required in a brick-and-mortar location. We're talking orders of magnitude in savings. </p>
<p dir="ltr">Of course, you may require one or more people to manage and maintain your ecommerce site. However, this pales in comparison to the number of staff required to run a physical store with a sales team. </p>
<p dir="ltr">Ecommerce also helps mitigate the costs of other areas like logistics and marketing. Affiliates and referral programs are a cost-efficient way to generate leads (you only pay if they convert). And dropshipping services offer an all-in-one solution to storing and shipping items to your customers.</p>
<p dir="ltr">The great thing about ecommerce is that it is not an all-or-nothing business model. It’s not simply a case of <a href="https://affise.com/blog/affiliate-marketing-vs-dropshipping/">affiliate marketing vs dropshipping</a>. You can mix and match both, adopt neither, try one and then the other or choose anything that best suits your business (and budget). </p>
<p dir="ltr">In this scenario, the customer also wins. You can pass on the savings to the consumer and beat out the prices of their local shops. </p>
<h3 dir="ltr">It improves customer experience.</h3>
<p dir="ltr">People’s lives today are busy and loaded with distractions. Many of us prefer to have flexibility in how and when we use our time. Ecommerce creates the most convenient shopping experience available today.</p>
<p dir="ltr">Consumers can shop from a computer, mobile, or smart device of their choice. This means they can make purchases while having breakfast, on public transport, getting ready for bed or even while on the job (not that <em>you</em> would do that of course). </p>
<p dir="ltr">Modern tools have streamlined the checkout process allowing customers to come back and complete a purchase at a later time. Other solutions have helped to create the personalized shopping experience that customers now expect. They expect your website to remember their purchase history and make relevant recommendations. Personalization helps build loyalty and increase customer lifetime value (CLV).</p>
<p dir="ltr">Most importantly, ecommerce lets you interact with customers at any time and get invaluable feedback. This means you can always be improving your products, services and shopping experience. And that means more satisfied customers. </p>
<p dir="ltr">You don’t need any coding or web developing skills. Platforms like <a href="/" target="_blank">BigCommerce</a> make it possible for anyone to have an ecommerce store up and running in no time.</p>
<p><br></p><h2 dir="ltr">What are the Different Types of Ecommerce?</h2>
<h3 dir="ltr">Business to business (B2B).</h3>
<p dir="ltr">If a business's main customer base comprises other businesses they sell to online, that’s considered B2B ecommerce. </p>
<p dir="ltr">The B2B ecommerce sector may include <a href="/solutions/wholesale-ecommerce-platform/" target="_blank">wholesalers</a> who sell physical products to online and brick-and-mortar stores. As well as companies that sell other products in smaller numbers, but always to other businesses, not individual consumers. </p>
<h3 dir="ltr">Business to consumer (B2C).</h3>
<p dir="ltr">We can’t escape the endeavors of the modern world. For all intents and purposes, we become consumers on this planet the minute we exit the womb. Business to consumer is the marketplace of our childhood; it’s where we feel at home. </p>
<p dir="ltr">Online shopping has been growing in market share for a long time now. All it took was a global pandemic to accelerate B2C ecommerce to the four corners of the earth. Consumers will continue to increasingly shop online for anything from fashion and beauty to hobby interests and groceries. </p>
<h3 dir="ltr">Consumer to business (C2B).</h3>
<p dir="ltr">Now, when we think of a transaction, we normally think of a business selling a product or service to a consumer. But like quantum interactions, transactions have no arrow of time.</p>
<p dir="ltr">In other words, consumers can pawn off their items to businesses via online transactions and vice versa. </p>
<p dir="ltr">A popular model for C2B is where the consumer uses their own websites to drive <a href="https://affise.com/blog/affiliate-traffic/">affiliate marketing traffic</a> to an agency or brand. Affise is an example of a platform that essentially lets consumers sell their marketing services to businesses.</p>
<p dir="ltr">Another example would be freelance job sites such as Upwork and Fiverr. These platforms link businesses up with individuals who sell their services by performing contract-outlined tasks. </p>
<h3 dir="ltr">Consumer to consumer (C2C).</h3>
<p dir="ltr">If you were born before the year 2000, you would have been to a yard sale or two.  If you haven’t heard of these things, it’s where people display old and used stuff (also known as junk) on their lawn that can be gotten for a fee. Nowadays, people can look online to buy nearly anything from other consumers.</p>
<p dir="ltr">The most famous examples of C2C ecommerce websites are eBay and Amazon. With eBay, it’s easy for anyone to put up a listing for a small fee but many sellers are full-fledged businesses. </p>
<p dir="ltr">While Amazon’s main focus is on B2C, consumers themselves can also create listings for new and used products.</p>
<h3 dir="ltr">Direct to consumer (D2C).</h3>
<p dir="ltr">At first glance, D2C ecommerce may appear no different than the standard model of business to consumer. But there is more to it than meets the eye. With direct-to-consumer, it’s the developers or <a href="/solutions/manufacturing/" target="_blank">manufacturers</a> that sell directly to consumers. This is quite appealing, especially for niche producers, because it lets businesses directly interact with their customer base. </p>
<p dir="ltr">D2C lets companies cut out the middleman and also glean valuable feedback to improve their products. Big manufacturers like Nike sell directly to consumers via their online presence, as well as selling wholesale to retailers, for example. </p>
<h2 dir="ltr">The Final Word</h2>
<p dir="ltr">Ecommerce is ubiquitous in modern life. Both businesses and consumers alike should expect electronic transactions to be the standard for most business models. And it provides an easy and convenient way for companies to expand their reach, increase sales, reduce costs, and vastly improve the customer experience. </p>
<p dir="ltr">Regardless of how you spell it or define it, ecommerce is here to stay. The future looks to bring us continuously evolving and improving technologies. Customer expectations are changing alongside digital innovations. If your business can’t meet those expectations, it will fall behind the competition.</p>
<p dir="ltr">Luckily, it’s not too late to join the world of ecommerce! So what are you waiting for?</p>
<p><br></p>

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What is Ecommerce?

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Payment Gateways

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