(For more resources on OpenCart, see here.)

Shopping cart system

The shopping cart is special software which allows customers to add / delete products to a basket from a store catalogue and then complete the order. The shopping cart also automatically updates the total amount which the customer will pay according to product additions or deletions on the basket.

OpenCart provides a built-in shopping cart system which provides all such functionality. So, you don't need to install or buy separate software for the shopping cart.

Merchant account

A merchant account is a special account type which differs from a usual bank account. Its sole purpose is to accept credit card payments. Opening a merchant account requires making a contract with the credit card network providers. Authorized card payments on the store are transferred to the merchant account. Then, as a merchant we can transfer the amount from merchant account to bank account (checking account).

Since opening a merchant account can be a tiresome process for most businesses and individuals, there are various online businesses which can provide this functionality.

Curious readers can learn the details of merchant accounts on the following links:
http://en.wikipedia.org/wiki/Merchant_account
http://www.merchantaccount.com/

Payment gateway

A payment gateway is an online analogue of a physical credit card processing terminal that we can locate in retail shops. Its function is to process credit card information and return the results back to the store system.

You can imagine the payment gateway as an element in the middle of an online store and credit card network. The software part of this service is included in OpenCart but we will have to use one of the payment gateway services.

Understanding online credit card processing

The following diagram shows the standard credit card processing flowchart in detail. Note that it is not essential to know every detail in steps shown in a red background color. These parts are executed on behalf of us by the payment system which we will use, so it is isolated both from the store and customer. For example, PayPal is such a system, which we will learn about now in detail.

Let's explain the flowchart step by step to clearly understand the whole process:

1. A customer successfully enters into the checkout page after filling the shopping cart with the products. Then, he/she enters the credit card information and clicks on the Pay button.
2. Now, the store checkout page sends these details along with the total amount to the payment gateway securely.
3. The payment gateway starts a series of processes. First of all, the information is passed to the merchant's bank processor where the merchant account was opened before.
4. The information is then sent to the credit card network by this processor. Visa and MasterCard are two of the most popular credit card networks.
5. The credit card network processes the validity of the credit card and sends the information to the customer's credit card issuer bank.
6. As a result, the bank rejects or approves the transaction and sends the information back to the credit card network. Through the same routing in reverse, the payment information is finally submitted back to the online store with a special code. All this is done in a few seconds and the information flow starting from the payment gateway is isolated from both the customer and merchant. It means that we don't have to deal with what's going on after sending information to the payment gateway. As a merchant, we only need the result of the transaction.

After the information is processed by credit card network during Step 6; the transaction funds are transferred to the merchant account by the credit card network as shown in Step a. Then, the merchant can transfer the funds from the merchant account to the usual checking bank account automatically or manually, as shown in Step b.

OpenCart payment methods

The current OpenCart version supports many established payment systems, including PayPal services, Authorize.net, Moneybookers, 2Checkout, and so on, as well as basic payment options such as Cash on Delivery, Bank Transfer, Check/money order, etc.

We can also get more payment gateway modules on the OpenCart extensions section by searching in Payment Methods.
http://www.opencart.com/index.php?route=extension/extension

We will now briefly learn the most widely used methods and their differences and similarities to each other.

PayPal

PayPal is one of the most popular and easiest to use systems for accepting credit cards for an online store. PayPal has two major products to be used in OpenCart through built-in modules:

• PayPal Website Payment Standard
• PayPal Website Payment Pro

Both of these payment methods provide both payment gateway and merchant account functionality. Let's understand the details of each now.

PayPal Website Payment Standard

It is the easiest method to implement accepting credit card payments on an online store. For merchants, a simple bank account and a PayPal account is enough to take payments. There are no monthly fees or setup costs charged by PayPal. The only cost is a fixed small percentage taken by PayPal for each transaction. So, you should consider this on price valuations of items in the store.

Here is the link to learn about the latest commission rates per transaction:
http://merchant.paypal.com

When the customer clicks on the checkout button on OpenCart, he/she will be redirected to the PayPal site to continue with the payment.

As you can see from the following sample screenshot, a customer can provide credit card information instantly or log in to his/her PayPal account to pay from the balance in the PayPal account:

In the next step, after the final review, the user clicks on the Pay Now button.

Notice that PayPal automatically localizes the total amount according to the PayPal owner's account currency. In this case, the price is calculated according to Dollar – Euro exchange rates.

After the payment, the PayPal screen shows the result of the payment. The screen doesn't return to the merchant store automatically. There is a button for it: Return to Merchant.

Finally, the website user is informed about the result of the purchase in the OpenCart store.

The main advantage of PayPal Website Payment Standard is that it is easy to implement; many online people are familiar with using it. We can state one minor disadvantage. Some people may abandon the purchase since the payment gateway would leave the store temporarily to complete the transaction on the PayPal website.

PayPal Website Payment Pro

This is the paid PayPal solution for an online store as a payment gateway and merchant account. The biggest difference from PayPal Website Payment Standard is that customers do not leave the website for credit card processing. The credit card information is completely processed in the online store as it is the popular method of all established e-commerce websites. Even the customers will not know about the processor of the cards. Unless we put a PayPal logo ourselves, this information is well encapsulated.

Using this method also only requires a bank account and PayPal account for the merchant. PayPal charges a monthly fee and a one-time setup fee for this service. The individual transactions are also commissioned by PayPal.

This is a very professional way of processing credit cards online for a store but it can have a negative effect on some customers. Some customers can require seeing some indication of trust from the store before making a purchase. So, depending the on store owner's choice, it would be wise to put a remark and logo of PayPal stating that «Credit card is processed by PayPal safely and securely»

For a beginner OpenCart administrator who wants to use PayPal for the online store, it is recommended to get experience with the free Standard payment option and then upgrade to the Pro option.

We can get more information on PayPal Website Payment Pro service at:
http://merchant.paypal.com
At time of writing this book, PayPal only charges a fixed monthly fee ($30) and commissions on each transaction. There are no other setup costs or hidden charges.

PayFlow Pro payment gateway

If we already have a merchant account, we don't need to pay extra for it by using PayPal Standard or PayPal Pro. PayFlow Pro is cheaper than other PayPal services and allows us to accept credit card payments to an existing merchant account.

Unfortunately, OpenCart currently does not support it as a built-in module but there are both free and paid modules. You can get them from the OpenCart official contributions page at:
http://www.opencart.com/index.php?route=extension/extension