Vending your products or services online can be a tough sell for a small online startup. Unless your product or services are truly unique, you may have to decide whether your web site can generate enough traffic to warrant selling your goods or services on the internet. If you already have an established market and your current customers want to purchase online, it may pay for you to setup and online shopping system. Using a service like PayPal is a simple and safe way for a startup to begin.

When you decide that you want sell your products or services online, you will need to decide how you will transact the exchange. Unless you intend to send and receive payments online with a service like PayPal, you'll need to establish a merchant bank account. You will also need a payment gateway which is a secure internet bridge between your online business and the credit card payment processing networks. An example of a credit card gateway service is Authorize.net. The gateway provides a fast, reliable and secure passage for transaction data via a 128-bit Secure Sockets Layer (SSL) Internet Protocol (IP) connection, and manage the complex routing of payment information to the appropriate credit card processors.

Here is the path for an online transaction using a payment gateway agent:

1. Your shopping cart enabled web site submits a credit card transaction to the payment gateway agent on behalf of an online customer via secure connection from your web site.
2. The payment gateway agent receives the secure transaction information and passes it via a secure connection to your merchant bank’s processor.
3. Your merchant bank’s processor submits the transaction to the credit card interchange (a network of financial entities that communicate to manage the processing, clearing, and settlement of credit card transactions).
4. The credit card interchange routes the transaction to the customer’s credit card Issuer.
5. The credit card issuer approves or declines the transaction based on the customer’s available funds and passes the transaction results, and if approved, the appropriate funds, back through the credit Card Interchange.
6. The credit card interchange relays the transaction results to the merchant bank’s processor.
7. The merchant bank’s processor relays the transaction results to the payment gateway agent.
8. The payment gateway agent stores the transaction results and sends them to the customer and/or you. The entire process only takes moments.

In addition to transactions, you will need the ability to ship your product and give the customer feedback as well as package tracking information. All of this to say that there is a lot of planning and cost gathering to do in order to sell your products or services online.
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