Credit Card Validation and Verification--Chapter 7 from Usable Shopping Carts

Usable Shopping Carts

Chapter 7: Credit Card Validation and Verification

In order to process credit-card transaction online, you need two things: a merchant account with a bank or other financial institution that acts as a clearinghouse, and the ability to provide a secure connection for the transmission of credit card data. We'll talk about the former here, and defer discussion of the latter to Chapter 8 (Security).

Different banks have different rules about who can have a merchant account, but once you've got one the process is pretty much the same for all of them. To obtain a merchant account you usually must have a registered business name or license, a tax or business registration number and often several years worth of accounts. If yours is a new business, a well-written business plan may also be helpful. Some banks won't permit mail or phone or internet orders on a new merchant account, and insist on a six-to-twelve-month assessment period before they will let you process mail/phone orders. Different financial institutions have differing policies; check these over carefully before signing on the dotted line. Banks tend to be especially rigorous (and sometimes even downright paranoid) with regard to Internet transactions. One beneficial side effect of this, however, is they often have a preferred solution provider, which can save you the trouble of setting up your own secure server (or of processing all your transactions manually). On the other hand, this may include a policy to the effect that if you use anything else, your transactions may be refused, or the bank may insist on going over your arrangements with a fine-tooth comb.

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