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Digital Marketing - Study Notes:

Encouraging multiple purchases

Now let’s take a look at what actually happens behind the scenes when a payment is being processed. This’ll also explain why, sometimes, when you’re making a purchase, either online or at a cash register, after you have inputted your PIN number, the card machine displays, “Dialing, processing payment.” It all takes a little bit of time.

So this is what’ll help us understand what’s going on while that time’s being taken:

  1. The customer gives their information to the merchant or the retailer.
  2. That information is then encrypted so that it can be safely passed around between these different people in a safe way.
  3. That information’s then passed on to the acquirer, who will be the likes of Visa and Mastercard.
  4. That information’s then passed on to the network, where there’s communication between the network and the bank to confirm that there are the funds available there.
  5. The information is then passed on to the token vault, where the encryption is decoded so that the information can clearly be seen.
  6. The information is passed back down the channel so that the merchant finally gets recognition that, yes, there are funds there.
  7. The process can be completed.

Linking payment acceptance

So, with all this money coming in and out of the website, it’s important that it’s joined up with an accounting package, because we want to be able to see how much money’s coming in, in terms of sales. We also want to see how much money is going out, in terms of the fees we’ve mentioned that go to the service, or the payment providers, any cost going out in terms of refunds, and also the costs of each sale, in terms of costs of good, and also any variable marketing costs. It’s ideal if we can see them in one place so we can get a clear view of how much margin we’re making per sale.

And there are different ways of providing this join-up between the financial information of your website and the accounting packages that sit behind it.

  • Manually: The most simple way, and labor-intensive way, is through manual data exports. So, this is where you simply download spreadsheets out of the back-end of your website, transfer them across to whatever your accounting software is, and upload them there, and manage it through that process.
  • Automatically: Next, we can use automatic pieces of software. So this is if you’re using a payment provider like PayPal, there’s a good chance that that’ll have a pre-existing connection with a major accounting package, like Sage Pay.
  • Developed: The third way is developing a custom API. This is where you get your website speaking directly to the accounting package through a custom-made piece of code that helps that process happen.

And so, again, like everything else, you need to decide which of these different methods is most appropriate for the site, scale, and complexity of your business.

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Graeme Smeaton

Graeme Smeaton is the founder of Royal & Awesome. Along with a proven track record in defining and delivering marketing strategies that drive significant growth and create real shareholder value, Graeme is highly commercial. He has extensive experience managing PLs and other key financial statements, while being an operational board director of AFG Media Ltd, and has experience negotiating with suppliers, distributors and licensing partners.

By the end of this topic, you should be able to:

  • Identify the impact of logistics, packaging, purchasing, distribution, and payment options for an e-commerce solution
  • Evaluate e-commerce revenue models and the advantages associated with different e-commerce solutions 
  • Critically appraise the requirements for managing e-commerce customers in accordance with current laws and legal guidelines

    Data protection regulations affect almost all aspects of digital marketing. Therefore, DMI has produced a short course on GDPR for all of our students. If you wish to learn more about GDPR, you can do so here:

    DMI Short Course: GDPR

    The following pieces of content from the Digital Marketing Institute's Membership Library have been chosen to offer additional material that you might find interesting or insightful.

    You can find more information and content like this on the Digital Marketing Institute's Membership Library

    You will not be assessed on this content.

      ABOUT THIS DIGITAL MARKETING MODULE

      E-Commerce Strategy
      Graeme Smeaton
      Skills Expert

      The E-Commerce Strategy module will introduce the characteristics of the e-commerce business model and will help you understand the corresponding business requirements and decisions that flow from their value proposition. You will learn to recognize the strengths and limitations of different e-commerce solutions and common payment methods. Finally, you will respond to a range of different illustrations showing how the level of customer service affects an e-commerce business in an industry where trust is key to the purchasing decision.