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Services such as CyberCash and CyberSource give merchants a
choice between simplicity and flexibility
CONSUMERS HAVE come to expect online transactions -- the majority of which
are made with credit cards -- to be completed in real time. To deliver on
that expectation and retain customers, merchants need to establish a secure
Internet connection to financial institutions, either by building one
themselves or by using a payment-processing gateway.
Many payment-processing services are available, each with differing features,
pricing structures, and varying degrees of installation complexity and
flexibility, all factors that warrant scrutiny by prospective adopters.
CyberCash and CyberSource, two of the market leaders, provide such services
to Web merchants with differing needs.
CyberCash positions itself as an easy-to-use payment-processing service that
integrates simply with almost any storefront application, making it an ideal
solution for small to midsize e-commerce sites. CyberSource delivers greater
flexibility and options, but at a higher price for its higher complexity.
The Test Center examined the features and costs of these two services and
spent extensive time installing the accompanying software, but we did not
test the services in our lab environment. Overall, we determined that both
services securely process transactions in real time, enabling Web merchants
to satisfy customers' need for immediate gratification.
Weighing
the competition
Most of the leaders in the payment-processing market have doubled their
customer base during the past 12 months and show no signs of slowing down,
according Gartner. Competing closely with CyberSource and CyberCash are
VeriSign, which aims at midsize to large merchants, and Authorize.net, which
targets small sites.
Neither CyberCash's nor CyberSource's payment-processing services requires
internal hardware or security measures. Both support multiple payment
options, and both boast strong encryption and redundant, fault-tolerant
servers in a secure data center with around-the-clock monitoring and support.
In addition, both offer Web-based administrative tools for managing
transactions.
The
same, only different
Easy to use, CyberCash integrates with almost any storefront application, so
it is an ideal solution for a small to midsize Web storefront. The provider
offers other features, such as fraud detection, as well as services for
brick-and-mortar stores for processing payment authorization from POS (point
of sale) systems.
CyberCash also provides an online application for merchants who need to
obtain a merchant account. The company's payment-processing service is easier
for smaller sites to afford; however, CyberCash lacks the extensiveness of
services delivered by CyberSource.
Although not as easy to use as CyberCash, CyberSource provides developers
more configuration options, thus giving larger organizations the flexibility
to add cross-state tax calculations and shipping terms as well as to adjust
other settings. In addition, CyberSource offers more services overall, such
as fraud protection, gift certificates, and fulfillment messaging, making it
a more full-featured suite of e-commerce services.
There are also bottom-line considerations to mull over when comparing
payment-processing gateways. Extra goodies come at a price. Consider the
following. CyberCash and CyberSource charge roughly the same amount for setup
-- around $500. But CyberCash charges $20 per month for its basic service
whereas CyberSource charges $95.
On top of that, merchants incur a per-transaction fee. CyberSource's basic
per-transaction fee runs between 7 cents and 10 cents. For additional
services such as fraud protection, per-transaction costs can run as high as
$1. On average, CyberCash charges about 20 cents per transaction, and
according to Gartner, CyberCash has lower costs per customer on average.
Getting
down to business
The first step in implementing a payment-processing service is registering
for it and downloading the necessary software, a relatively simple task. Both
CyberCash and CyberSource offer downloadable development kits, available on
multiple platforms, for integrating into commerce sites.
After registering with CyberCash, users can download the Merchant Connection
Kit (MCK) for integration with their prebuilt commerce sites. Available on multiple
platforms such as Unix and Windows NT, MCK provides Webmasters with
encryption and communication libraries for developers familiar with Perl, C,
or ASP script.
Merchants using packaged solutions such as Microsoft Site Server Commerce
Edition -- which we used to construct our Web storefront -- do not need the
MCK. Instead, they can download prebuilt CyberCash components similar to
those offered by CyberSource. These components quickly enable Web storefronts
to process payments in real time with minimal implementation requirements. To
incorporate the payment component into our commerce site, we simply added it
to the payment purchase pipeline within MS Site Server. Unlike CyberSource,
there was no need for coding changes. Moreover, the CyberCash Register
Components use triple DES (data encryption standard) to secure its
connections.
Setting up CyberSource sent us through a similar process of downloading the
appropriate software. Once installed, however, there were many more steps to
configure the component properties and to manipulate code within our store
pages. The process should be easy for Web designers; it's just not as simple
as implementing CyberCash.
For instance, after installing the CyberSource Commerce Component and testing
our connection to the gateway, we generated public and private keys on our
system using a utility provided by CyberSource. These keys allow merchants to
exchange encrypted SCMP (Simple Commerce Message Protocol) messages with
financial companies. In addition, other settings needed to be adjusted in the
Commerce Component by adding code within Site Server ASP pages.
To ensure a secure connection for processing payment transactions in real
time, thereby satisfying customers' demand for immediacy, e-commerce sites
should consider using an outsourced payment-processing gateway service.
Proprietors of small to midsize e-commerce sites with low transaction volume
and basic payment-processing needs should look at gateways such as CyberCash.
Other high-volume sites, or those looking to add more services such as tax
calculations, should consider solutions such as CyberSource.
Related
articles:
Worry-free
payment processing keeps the customer satisfied
Verza
pays off big for nascent merchants
Senior
Analyst Lori Mitchell (lori_mitchell@infoworld.com)
covers Web-based solutions and technology.
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BOTTOM LINE
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Payment-processing services 
BUSINESS
CASE
Payment-processing services are essential to securely complete an online
purchase transaction in real time. Services such as CyberCash are easy to
install and less expensive but deliver fewer extra features. Other
pricier, higher-end services such as CyberSource deliver a wide range of
features, such as out-of-state tax calculations and gift certificates,
that an e-commerce site can add as needed.
TECHNOLOGY
CASE
Web developers can deploy a payment-processing gateway service with
minimal implementation required. No additional hardware or staff is
necessary for maintenance as these services are securely housed and
monitored. More complex services such as CyberSource may require more
coding than simpler solutions such as CyberCash.
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PROS
+ Easy implementation
+ Multiple payment options
+ Real-time approval and notification
+ Automatic upgrades
+ Secure monitoring and around-the-clock support
CONS
- None
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