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The PayPal Official Insider Guide to Growing Your Business: Getting Paid

Michael Miller discusses how shopping carts work, configuring the PayPal shopping cart, dealing with foreign currency transactions, recurring payments, and creating and sending invoices.
This chapter is from the book

Part and parcel of the online shopping experience is the shopping cart and checkout system, which is how customers pay and you get paid. There's also the matter of invoicing your customers, if that's the way your business works, or managing recurring payments—subscriptions or installment payments.

If you don't yet have a shopping cart for your website, PayPal can provide one, at no additional charge and with little effort on your part. Otherwise, you can integrate PayPal's payment processing into your existing shopping cart—including those provided by third-party suppliers.

How Shopping Carts Work

If you offer more than just a single item for sale, chances are some customers will purchase more than one item, which is a good thing. Since you don't want to force these customers to make two or more separate payment transactions, you need to consolidate multiple purchases into a single shopping cart. That shopping cart then feeds into a checkout page, where customers provide shipping information and pay for their purchases.

The Checkout Process

Most online shoppers are familiar with shopping carts and the online checkout process. Figure 4.1 shows how the process works, from the customer's viewpoint, using the PayPal Shopping Cart with Website Payments Standard. Steps in blue are generated pages hosted on the PayPal site; steps in white take place on the merchant's site.

Figure 4.1

Figure 4.1 The three steps of the PayPal Shopping Cart checkout process, in the context of an online shopping experience.

The process starts when the customer clicks the Add to Cart button for a particular product. This button is hosted on the merchant's website, although it's generated via code supplied by PayPal. This adds the item to the virtual shopping cart, hosted by PayPal; customers can continue shopping—and add more items to the shopping cart—or go directly to the checkout page.

When the customer clicks to checkout, they will see the checkout page hosted by PayPal, although it can be branded for the merchant. At this point the customer signs in and pays with a PayPal account, or enters the necessary credit or debit card information. When paying via credit or debit card, the customer also has to enter a shipping address and other relevant information. (These details are already known if the customer pays via a PayPal account.)

The shopper confirms the transaction details and then PayPal processes the payment. Assuming the customer's payment is approved, PayPal generates a confirmation screen and transmits information about the purchase to the merchant. The customer is then returned to the merchant's website, and receives (from PayPal) an email confirmation of the purchase.

Behind the Scenes

Most shopping cart/checkout systems are built from the following components:

  • Payment buttons or links that enable the customer to place individual items into the shopping cart.
  • A database that stores information about the products in the customer's shopping cart.
  • Web pages that display information about shopping cart contents, as well as checkout pages that are used when the customer is ready to pay.
  • Controls for administering the shopping cart system.
  • Reports that detail shopping cart transactions.

These components work together to provide a unified shopping and payment experience for the customer, allow you to access and manage your inventory, and provide you with information that triggers the shipment of purchased products. The system itself is actually a software application. This application can run on the computer or server that hosts your company's website, or it can run on a third-party website. In the case of the PayPal Shopping Cart, it runs on PayPal's servers.

Wherever it's hosted, the shopping cart integrates with the rest of your website. When a customer clicks the Buy Now or Add to Cart button, that information is transmitted to the shopping cart. When the customer opts to check out, all items in the basket are displayed on a dynamically generated checkout page. The customer then enters appropriate payment and shipping information, the payment is processed, and the transaction is concluded—all in the shopping cart/checkout system.

The product and customer information is stored temporarily in the shopping cart database. The shopping cart system creates the final checkout on the fly, in real time, based on the information stored in the database; unlike the static HTML product pages on your website, all checkout pages are dynamic web pages.

Integrating a Shopping Cart

If you're using a third-party shopping cart, this software needs to be tied into your existing storefront and inventory systems. This requires some degree of programming expertise; how much programming is necessary depends on the complexity of the shopping cart.

For example, PayPal's Website Payments Standard provides the fully featured PayPal Shopping Cart. With this solution, all you have to do is insert HTML code for the individual product payments buttons; the checkout process itself resides on the PayPal site, so you don't have to create new pages for checkout or other activities. The integration process is relatively easy.

If you use another shopping cart solution, however, the integration process can be more complicated. PayPal's Website Payments Pro integrates with most third-party shopping carts, but may require additional programming to implement the necessary calls to various PayPal APIs.

That said, many third-party shopping carts come with PayPal integration built-in, which makes it easy for you. Some shopping cart providers build in integration with Website Payments Pro; others (those that provide their own merchant credit account solutions) use the gateway approach and tie into PayPal's Payflow Payment Gateway. In either instance, integrating PayPal with a third-party shopping cart is often as easy as providing your PayPal credentials to the shopping cart service and checking a few options on a sign-up form.

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