Hosted Shopping Cart – Are You Driving Your Shopping Cart Software Naked?

A hosted shopping cart versus an installed shopping cart, it’s an age-old question that can determine the long-term fate of your online business.

This may seem like an extreme position for what some consider to be a minor technical detail. After all, who cares if you buy and install a standalone piece of shopping cart software or if you “rent” your system and use hosted shopping cart software?

The products are the same, the people who run the online business are the same, so shouldn’t you just look for the cheapest shopping cart software and then worry about marketing and sales instead of the software problems of the techno geeks? In the past, the answer to this would have been a resounding yes.

But times have changed.

And if you don’t keep up with the times, you’ll be left with an outdated system and go out of business or find out that at some point in the future you’ll need to convert your entire business to an up-to-date system. system.

To better understand what I am trying to convey to you, I want you to think back to the year 2000 or before. Before 2000, if you wanted to have an autoresponder system, you just found the best autoresponder software and installed it on your PC and started sending thousands or even millions of emails.

But times changed, the Can Spam laws came into effect and the ISPs started adding filtering systems that effectively shut down the whole “autoresponder on a PC company” and associated software industry that supported this company.

Hosted autoresponder companies sprouted up instead. These autoresponder companies built their business on a hosted platform and then “rented” their service to other companies that wanted an autoresponder service. Hosted autoresponder companies like Aweber, Mail Chimp, Constant Contact, Get Response etc. were able to do what the standalone autoresponder software couldn’t… actually deliver emails.

So now you essentially have 2 basic choices in autoresponders, stand alone systems that don’t work and hosted systems that do.

And this is where the hosted shopping cart industry is headed. There will be hosted shopping cart systems that work and the standalone systems that won’t.

And this is going to happen for one reason only: PCI.

Basically, PCI is the credit card industry regulation that dictates how online businesses will configure their websites for online e-commerce and credit card acceptance. In a nutshell, PCI dictates that you have separate physical hardware for your shopping cart, your credit card processing, and your credit card storage (necessary if you run any sort of recurring billing or trial periods).

To have separate hardware, you are actually talking about 3 separate servers for 1 online shopping cart application. Of course, simply uploading some software to a shared hosting solution won’t put you in a position of PCI compliance, for the obvious reasons of having a single piece of hardware for the entire application. And the fact that you are “sharing” a server with hundreds of others is a second obvious problem and should be of great concern to you even without the PCI rules in effect.

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Heavy financial penalties

So you’re not PCI compliant…so what? You’ve been working with your current software for years and your credit card company has never said a word. Then why would you ever consider the pain and added expense of moving to a hosted shopping cart?

As long as you don’t have a problem, you’ll probably never be found if you’re a small business flying under the radar. But this is a lot like driving naked through New York City without insurance. As long as you never get into an accident, no one will ever know, but getting into a minor fender bender will leave you feeling horribly vulnerable both personally and financially.

PCI violations can cost up to $10,000 per incident, so if you have 10 identities stolen from your online shopping cart, you could be fined up to $100,000 and could lose your ability to process credit cards in the future. For all practical purposes, you’re broke and bankrupt.

Other benefits of a hosted shopping cart

In addition to the added security and PCI compliance that a hosted shopping cart system gives you, you typically receive these benefits:

  • Free software upgrades – As their software gets better, you automatically benefit.
  • Free maintenance – The browser wars mean that what works today may not work tomorrow, so you need constant maintenance to ensure full browser compatibility.
  • Full feature set – Hosted shopping carts are typically much more complete with all the necessary applications under one software umbrella.
  • Powerful up-sell features – Maximizing your revenue per customer is a “must do” item to stay in business and make a profit in this competitive environment.
  • Free support – If a system doesn’t have free and unlimited support, avoid it like the plague. Too many companies release an unfriendly UI and then charge you for a “support call” when you can’t figure it out.

With all the risks associated with an installed shopping cart and the obvious benefits of a hosted shopping cart, the industry shift is inevitable and is accelerating as the June 2010 PCI deadline approaches. Is your company ready for the new era?