Whether you own an ecommerce store, are a frequent online shopper or have never bought anything on the Internet, you may wonder about online shopping carts and how they work.

We are all familiar with shopping carts at brick-and-mortar stores. An online shopping cart is similar in that it is simply a basket to hold desired items until the buyer is ready to checkout and pay for the products or services. However, they are virtual, or not physically existing but made to appear through software.

Online shopping carts operate via software on a company’s website that allows a customer to add and remove items, and then adds any applicable tax and/or shipping costs before calculating the total payment. While some ecommerce shopping carts are very basic, some more advanced carts have additional functionality for the web store owner, or to enhance the user experience for the customer.

Two of the key components attached to the online shopping carts in the online checkout process in any ecommerce store are a merchant account and a payment gateway. Typically, these two pieces are offered together by credit card processing providers, ensuring compatibility between the two.

Put simply, a merchant account is an account held by the merchant or web store owner that enables the transaction to take place. This includes authorizing the credit card transaction, capturing the funds from the issuer, and depositing funds (minus processing fees) into the merchant’s checking account. Funds are usually deposited to the merchant’s checking account within 48 hours of the completion of the sale.

A payment gateway is an ecommerce service that securely facilitates the transfer of information between the online store and the credit card processing company over the Internet via a secure browser interface.

Generally, online shopping carts and the checkout process are safe due to the fact that the payment gateway encrypts the data, rendering it nearly impossible to decipher if it is somehow intercepted along its route.

For online store owners that are just getting their website set up on the Internet, an all-in-one ecommerce solution is recommended. An all-in-one solution will include the merchant account, online payment gateway and shopping cart making the entire set up process very simple.

Established online stores will sometimes already have merchant account and payment gateway and simply want a new shopping cart system; either basic, or more advanced system with additional features. These features can include inventory management tools, shipping confirmation, and merchandising and marketing tools.

Determining which type of online shopping cart is best for an online store owner is dependent upon what type of functionality is desired as well as the amount of money the merchant wants to spend.

Regardless of the type of online shopping cart, it is an essential feature needed for any online store. If you have any questions about online shopping carts, give us a call at The Transaction Group. We can even recommend online shopping cart providers to meet the needs of any online business.