Basics of Online Commerce For Your Internet Business
The basic premise behind online commerce systems is simple. You sign up for the service and the service creates an account for you, much like a bank. You can then add funds to your account by any number of methods: transferring money from your account, charging a credit card, or selling products and receiving payments. In order to get your money offline, you can either use a debit card linked directly to your account on the commerce system, or you can link your online account to an offline bank account, allowing you to transfer money freely between the two accounts–with a necessary time delay, of course. (This model of commerce won’t be followed in exactly this way by every commerce system, of course–check the policies of your particular commerce system to get specific information for you. If you coded your own commerce system, it’ll be a matter between you and your bank, of course.)
The basic premise is simple, yes–but in terms of actual implementation, there are some complicated details. Being aware of and working around these details is going to be the key to success for any good online commerce operation–and as we’ve said, if you’re going to sell products online you need a good online commerce operation.
One important issue is the time delay in transferring your money from your online account to your offline account–not a major issue much of the time (the actual delay is anywhere from one to four business days), but at certain critical moments–if you need your money close to the end of the month in order to pay rent on office space or to pay bandwidth costs, for example–it can become a problem. So make sure that you take into account the time delay when you’re scheduling payments or purchases according to your business plan–or make sure that you have a debit card or other payment option from your commerce system, eliminating the time delay altogether.
Another issue (that hopefully won’t be an issue in the future) is the problem of online security. We talked about this in terms of your website earlier in the book. But it’s also vital to think about it in terms of your commerce system bank account–and your bank account in general. Again, we talked earlier about how commerce systems that you design yourself need to be secure enough to protect you and your customers from hackers, which not only give your business a bad name, but could wipe out your entire balance in minutes. Commerce systems that you design yourself don’t have as much of a problem in this regard–usually a large staff of people exists to protect the integrity of online accounts. Depending on your protection policy, however, this can create new problems that you’ll need to be aware of.
Certain online commerce systems take extremely harsh measures when dealing with compromised accounts: not only is your account locked and all of the balance within it seized, but the balance of any bank account linked to your online account is seized as well. This makes some amount of sense–if hackers can access your online account, they can just as easily access any linked offline accounts through bank transfers. And if you follow up with your commerce system on any identity theft or hacking issues, you can often get the balances returned to you. But following up takes some time, and in some cases–serious identity theft cases–you may not be able to get the money back at all.
So you’ll need to integrate your bank account and your online account in such a way as to protect yourself from disaster–a rare event, of course, but one that can wipe out your business if you aren’t careful. The simplest measure is this: set up two offline bank accounts for any online commerce system you’re using. Link only one of those bank accounts to your online account. Whenever you receive payment online, transfer it to your linked offline account immediately–and then transfer it from your linked offline account to your other account, which has no direct link to the online part of your business. Even if your account is compromised and your accounts locked or seized, you can still keep your money safe so that it can keep your business running. (Better yet–check out your online commerce system and its account integrity policies thoroughly before you sign up and commit your business to it.)
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