The Rise of eCommerce — and What This Means to Customers and Merchants Today
The past two decades have witnessed a change in the way people buy products and services that’s as drastic as any shift that has ever occurred in the history of commerce. We’re talking, of course, about the rise of eCommerce.
It has been nearly 20 years since the commercialization of the Internet first began. While the Internet itself has been around since the 1960s, the World Wide Web wasn’t introduced until 1991. The first web browser, Netscape 1.0 was released in late 1994, setting the stage for the explosion of eCommerce that soon followed. Today, eCommerce has become so ingrained that it’s hard to imagine not being able to buy and sell products and services online.
The Evolution of eCommerce
eCommerce has evolved considerably since the fi rst major online retailer, Amazon.com, was launched primarily as an online bookseller in 1995. Practically anything that can be bought at a physical, brick-and-mortar store can now be bought online as well. In 2012, worldwide eCommerce sales topped $1 billion for the first time, and they are projected to hit $1.3 billion in 2013, according to estimates by eMarketer. North America led the way in 2012 with $365 billion in eCommerce sales as more consumers shifted their spending from physical stores to retail and travel websites, eMarketer noted. There are many reasons for the rapid growth of eCommerce, starting with greater convenience. Consumers can buy products and services online from the convenience of their home, office or anywhere they can get an Internet connection on their laptop computer or mobile device, saving both time and money. Products and services are often priced lower online, since online merchants generally have lower overhead costs. And, consumers can access a much broader selection of merchandise online than they can in any single store location, regardless of how large the store is. Almost unlimited product and service information is also available online — including reviews from other customers — which makes it easier for consumers to make more educated buying decisions. One of the biggest reasons for the explosion of eCommerce, though, is the advances that have been made in online security since the early days of eCommerce. Consumers are understandably concerned about the security of payment information, including credit and debit card numbers, that they enter online. Advanced encryption and other techniques have made buying online just as safe as buying in person if the merchant is following industry best practices for online security.
Payment Processing and eCommerce
From a business standpoint, eCommerce is vastly different from traditional commerce in almost every way. This includes payment processing. Since customers buying products and services online cannot pay with cash, online merchants have to be able to accept a wide variety of different types of electronic payments safely and securely, including credit and debit cards. This is especially critical with eCommerce, since online merchants assume 100 percent liability for fraudulent transactions. For more information
In merchant card processing lingo, businesses that accept credit and debit card payments online are referred to as Card Not Present (or CNP) merchants. Since the physical credit or debit card is not presented at the time of sale, special precautions must be taken to ensure the security of these transactions. Two of these precautions are the Card Verification Value (CVV) code and the Address Verification System (AVS). The CVV2 code is the three-digit security code that’s printed on the back of Visa® and MasterCard® cards, or the four-digit code printed on the front of American Express cards. This code verifies that the customer presenting the card is the rightful cardholder and actually has the card in his or her possession when making the purchase. AVS, meanwhile, verifies that the address information entered by the customer making an online purchase matches the bank’s customer address information. The merchant asks customers for their billing ZIP code and house or apartment number at checkout and then receives a code with an authorization result based on the level of accuracy of the address match.
Choosing a Merchant Services Provider
To ensure that your eCommerce customers enjoy the best possible online shopping experience, and that your online payment transactions are as safe and secure as possible, you should take great care in choosing your merchant processing services provider.
Look for a provider that offers a simple, reliable and secure payment gateway solution
that meets the following criteria:
- Accepts all major bank and credit cards
- Is Internet based to eliminate software costs, upgrades and system maintenance
- Is secure and compliant with redundant infrastructure and 24/7 availability
- Features simplified interface options for any level of programming skill
- Offers a broad range of shopping cart compatibility
- Offers Purchase Card Level II and Level III support, as well as support for Payer Authentication fraud prevention programs and AVS/CVV processing
PNC Merchant Services® is a leader in the payment processing industry. We provide businesses with innovative payment acceptance capabilities and back them up with service, financial strength and stability to help keep your receivables flowing. PNC Merchant Services offers the PayeezySM Gateway, a merchant processing payment gateway solution that meets all of these criteria and more. It has been designed to meet the online payment acceptance needs of eCommerce and other CNP merchants (like Mail Order/Telephone Order businesses) today while also supporting growth plans for the future. Contact us at 1-800-742-5030 to discuss how PNC Merchant Services makes payment options easier for your customers, and better acceptance options for your business with Payeezy Gateway.
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Important Legal Disclosures and Information
First Data is a registered trademark and Payeezy Gateway is a service mark of the First Data Corporation in the United States and other countries.
Merchant Services are provided by PNC Merchant Services Company and are subject to credit approval. PNC Merchant Services is a registered trademark of The PNC Financial Services Group, Inc.
This article is designed to provide useful and practical information for merchants accepting card transactions. It is not intended to be legal, tax, accounting or financial advice, nor should it be substituted for a full and regular review of the Association Rules and any changes thereto.