Internet Bookkeeping
This is one of my favorite service offerings because it takes the confusion out of the sales that you are making from your website. Here I help you manage your online sales and get control of the income coming in by taking your products and/or services and integrating them into your Quick Books software. I do this by setting up a simple process unique to each client that records and tracks all of the sales into their Quick Books accounting software.
Along with this service, I also teach my clients how to read and understand the reports they receive from the online merchants.
Online Credit Card Transactions
Because credit cards are the dominant form of online payment, it is important to understand how they work & to recognize the strength & weaknesses of this payment system. Online credit card transactions are processed in much the same way that in-store purchases are, with the major difference being that online merchants never see the actual card being used, no card impression is being taken, & no signature is available. Online credit card transactions most closely resemble MOTO (Mail Order-telephone Order) transactions. These types of purchases are also called CNP (Cardholder Not Present) transactions and are the major reason that charges can be disputed later by consumers. Since the merchant never sees the credit card, nor receives a hand-signed agreement to pay from the customer, when disputes arise, the merchant face the risk that the transaction may be disallowed and reversed, even though he has already shipped the goods or the user has downloaded a digital product.
The illustration below shows the online cc purchase cycle. There are 5 parties involved in an online credit card purchase: consumer, merchant, clearinghouse, merchant bank, (sometimes called acquiring bank), and the consumer’s card issuing bank. In order to accept payments by credit cards, online merchants must have a merchant account established with a bank or a financial institution. A merchant account is simply a bank account that allows companies to process credit card payments & receive funds for those transactions.
The process begins, (1) when an online credit card transaction makes a purchase. When a consumer wants to make a purchase, they add the items to the merchant’s shopping cart When the consumer wants to pay for the items in the shopping cart, a secure tunnel though the Internet is created using SSL (Secure Socket Layer). Using encryption, SSL secures the session during which credit card information will be sent to the merchant and protects the information from intruders on the Internet (2). SSL does not authenticate either the merchant or the customer. The transacting parties have to trust one another.
Once the credit card information is received by the merchant, the merchant software contacts a clearinghouse (3). The clearinghouse contacts the issuing bank to verify the account information (4). Once verified, the issuing bank credits the account of the merchant at the merchant’s bank (usually this occurs at night in a batch process).(5). The debit to the consumers account is transmitted to the consumer in a monthly statement (6).
How An Online Credit Card Transaction Works – click thumbnail to open larger image:
