A hosted shopping cart versus an installed shopping cart is an old question that can determine the long-term fate of your online business.

This might seem like an extreme position on what some would consider a minor technicality. After all, what difference does it make if you buy and install standalone shopping cart software or “rent” your system and use hosted shopping cart software?

The products are the same, the people running the online business are the same, so shouldn’t you just buy the cheapest cart software and then worry about marketing and sales instead of software concerns for the techies? -geeks? In the past, the answer to this would have been a resounding yes.

But times have changed.

And if it doesn’t change with the times, you’ll either be left behind with an outdated system and be out of business or find that you need to convert your entire business at some point in the future to an updated one. system.

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

But times changed, Can Spam laws went into effect, and ISPs began adding filtering systems that effectively shut down the entire “auto responder business on a PC” and the accompanying software industry that supported this business.

Hosted autoresponder companies have sprung up in their place. These autoresponder companies built their businesses 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. they were able to do what standalone autoresponder software couldn’t do…actually deliver emails.

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

And this is where the hosted shopping cart industry is headed. There will be hosted shopping cart systems that work and stand-alone systems that don’t.

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

PCI is basically the credit card industry regulations that dictate how online businesses will set up 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 do any type of recurring billing or trial periods).

To have separate hardware, you are basically talking about 3 separate servers for 1 online shopping cart application. Simply uploading some software to a shared hosting solution will obviously not put you in a PCI compliant position for the obvious reasons of a single piece of hardware for the entire application. And the fact that you’re “sharing” a server with hundreds of people is a second obvious problem and should be a big concern for you even without PCI rules in place.

Severe financial penalties

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

As long as you don’t have a problem, chances are you’ll never be found if you’re a small business going under the radar. But this is a lot like driving a naked car around New York City without insurance. As long as you never have an accident, no one will know, but if you have a small accident, you will feel terribly exposed both personally and financially.

PCI violations can cost up to $10,000 per incident, so if 10 identities are stolen from your online shopping cart, you could face a fine of up to $100,000 and lose your ability to process credit cards in the future. For all practical purposes, you’ll be broke and out of business.

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’ll typically also receive these benefits:

• Free software updates – As your software improves, you automatically benefit.
• free maintenance – Browser wars mean that what works today may not work tomorrow, so you need to perform constant maintenance to ensure full browser compatibility.
• Full set of features – Hosted shopping carts are usually much more complete with all the necessary applications under the same software.
• Powerful Upsell Features – Maximizing your revenue per customer is a “must have” to stay in business and profit in this competitive environment.
• free support – If a system doesn’t have free unlimited support, avoid it like the plague. Too many companies present an unfriendly user interface and then charge you for a “support” call when they can’t resolve it.

With all the risks associated with an installed shopping cart and the obvious advantages of a hosted shopping cart, industry change is inevitable and coming faster as the June 2010 PCI deadline approaches. Is your business ready for the new era?