The first condition necessary for a secure e-commerce operation is data transfer in an environment which is secure. The second requirement is the protection of credit card numbers, and the third, of course, is the construction of customer confidence. Each one of these conditions entails a different operation, but does indeed goes a great way in ensuring financial transactions on the net which are secure.

All merchants who are looking to conduct financial transactions on the net must make sure that all the sensitive data is well encrypted. This encryption must be achieved with the help of SSL (Security Sockets Layer) protocol. When this occurs the customer information – which is the information on the credit card– becomes encrypted and can be decrypted only by the people who have the decryption code.

More generally, the payment gateways become the mediators between the merchant and the credit card companies. These gateways prevent the credit card number from being sent to the merchant. The merchant is only given information about the product name, product code and the amount that has been debited from the customer’s credit card. The credit card numbers remain with the payment gateways.

These gateways are needed in order to follow higher security requirements as compared to the merchants. Their servers are hosted in a secure environment; they have several firewalls and protection of passwords; and conduct transactions on dedicated lines.

The merchants, who are not able to implant SSL protocol in their shopping cart, redirect customers on the SSL protected servers of payment gateways. This two-step process makes certain that the data is transferred in a secure environment and that the credit card numbers don’t move beyond an authority which is responsible. Such a system profit from all three parties: the merchant is able to sell a product; the customer is satisfied that there is no security breach; and the payment gateway gets a transaction fee for giving this extra layer of security.

It now remains to the merchant to build customer confidence that he runs a secure e-commerce operation. The merchant can do this by informing customers that their information is safe because the SSL protocol is in place. This can also be noted by the customer who finds an ‘s’ added to the `http` in the address bar.

The merchant will also make use of a professionally designed shopping cart which is aimed at making shopping an enjoyable experience. A familiar, shopping interface, which is easy to navigate, can convince shoppers even more of how reliable you are.

James Reid is contributing editor at WebDesignArticles.net. This article may be reproduced provided that its complete content, links and author byline are kept intact and unchanged. No additional links permitted. Hyperlinks and/or URLs must remain both human clickable and search engine spiderable.