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More businesses today are using their Web site as a marketing tool, as well as portal to handle e-commerce transactions and take credit card payments for goods and services. It is an increasingly popular tool because it is an effective and cost-efficient way to sell goods and services, and increase cash flow.

According to the U.S. Department of Commerce, e-commerce sales totaled to more than $69 billion in 2004, which was a 23.5 percent increase from 2003. However, there are still a few skeptics out there who are concerned about security, trust and the costs of e-commerce. The fact is there are a couple of options for e-commerce at varying price levels where security and privacy issues are addressed.

PayPal

The least expensive option is to create a shopping cart on your Web site and open a merchant account with PayPal -- the recent acquisition of online retailer eBay. PayPal is a third-party merchant company that offers an e-commerce account with no monthly fees, and no set-up fees.

New features of PayPal include the ability to customize the transaction page to fit your look and feel so your brand won't be entirely lost, and allowing transactions with customers who do not have a PayPal account. It used to be that purchasing an item through PayPal required you to have an account and go through a lengthy enrollment, so that discouraged a lot of e-buyers, and potentially hurt businesses that used the service. The shopping cart on your Web site would pass variables to the PayPal site in terms of the good or services, quantities, and price. PayPal then completes the credit card transaction on a secure domain with a Secure Socket Layer (SSL) with 128-bit encryption, to ensure privacy.

This means that the information or data packets passed between your computer and the server which hosts the e-commerce is "locked," or encrypted, until it reaches the server, is verified, and then is "unlocked," or deciphered. PayPal charges a small flat per-transaction fee, along with the usual credit card company percentage. The funds are usually in your account and cleared in three to four days. PayPal does have daily transaction limits, so if you are receiving more than $20,000 per transaction, or per day, the following option may be better suited for your company.

On your Web site

The second option, which can cost considerably more, is to actually conduct the credit card transaction on your own Web site. Along with the shopping cart option, you also have your own checkout system. This requires your own SSL certificate, which you can purchase through VeriSign (www.verisign.com). The certificate is registered with your server provider, and is authenticated each time a transaction occurs.

VeriSign not only offers the standard 128-bit encryption, but also has 256-bit encryption, which significantly increases the number of possible combinations. This option also requires that you have a merchant account, which most banks have, or you can use an online source such as Authorize.net. They usually carry a one-time set up fee, in addition to monthly fees and per transaction fees, on top of the good or services, quantities and price. The fees add up and can be pricey compared to the previous options, but if your revenues depend on e-commerce as a vital extension of your business, then this might be the option for you.

An example of an integrated e-commerce solution is one that is combined with content manageability. You can actually customize your shopping cart buttons with the ability to add, edit, or delete them. This option comes in handy if you are selling registrations with varying prices relative to membership level.

Let's say you are selling tickets to a luncheon for your organization, and you have corporate members as well as individual members. Each could have different prices for the event, and their own shopping cart button. This is useful in securing registration fees and reducing the amount of "no-shows."

In order to calculate the payback on this investment for your Web site, you would need to estimate the amount of increased business that the shopping cart could bring. Remember that your products or services have no geographical limitations, and your market is now 600 million Internet users. Keep in mind that your pricing would have to include your fixed costs for the transaction fees and monthly fees. Most e-retailers add a percentage to the shipping costs to cover these fees, so your profit will not be diluted by e-commerce expenses.