Online Shopping Cart Definition

Merchant Account Online Shopping Cart Explained:

What is an Online Shopping Cart? Contrary to popular belief among merchants, an online shopping cart does not process credit card payments. Instead, shopping cart software serves three other main purposes. First, it allows merchants to set up and manage online sales processes such as adding products, inventory management, order fulfillment and customer data collection. Second, it acts as the ordering interface for the customer, allowing him/her to add/remove products from the shopping cart and checkout. And lastly, it communicates the payment information to the payment gateway which encrypts the data and sends it to the banks for authorization.

Shopping carts come in two forms:

Self hosted software – This type of shopping cart is a dedicated piece of software that is hosted on the retailer’s own server. There are several varieties of licensed carts that range from open source free carts to proprietary packages that can cost thousands of dollars. Merchants who choose to host their own shopping carts are also responsible for securing their server and software against data theft which is a costly ongoing task. Generally, self hosted shopping carts are only advisable for mid-to-large online retailers that have someone dedicated to maintaining the security of the website.

3rd Party Hosted Software – Also known as an Application Service Provider (ASP), this type is shopping cart is hosted on the ASP’s secured servers and integrated with the retailers website using code snippets, Javascript, and/or API connections. Generally, third-party hosted shopping cart companies include a packaged payment gateway and assume the risk of information security, which eliminates the liability for the merchant. These types of services are usually easy to set up and are best for new and low-volume merchants.

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