Payment processing refers to the method of processing web-based payments for an ecommerce site. Payment processing typically involves setting up a merchant account that allows the ecommerce site to accept payment with credit cards, debit cards, gift cards, and other forms of electronic payment. Financial institutions such as banks often handle payment processing or merchant accounts. The terms of this account are predetermined and set up to coordinate with governmental guidelines. The fees or rates that are charged to access payment processing are set up by the organisation that arranges the account for the ecommerce client.

The ecommerce site that is used to authorise electronic payments for online businesses or ecommerce sites is referred to as the payment gateway. In some cases, the payment gateway is a third party entity rather than the merchant account provider. This application is typically set up on the merchant’s server. It can also be set up on the server that is located at the merchants ISP or CSP. Payment gateways are designed to accept the information, encrypt it, and transfer it over the Internet.

• Wikipedia explanation of payment processing
• Paypal - A popular online payment method offering free shopping cart facilities
• Google Checkout - Google's solution to online payment processing

E-Commerce is the term used to refer to electronic commerce or transacting business online. E-Commerce software is used and it includes a frontend and a backend component. The frontend typically involves a catalog and a shopping cart function, whereas the backend typically involves a transaction function that takes care of payment, security, and authorization.

E-Commerce software solutions are designed to simplify electronic commerce. They usually include a variety of tools that maintain e-business management and maintenance. With E-Commerce software, the owner should be able to upload and download product data including pictures and text. Additionally, the software enables the management of products, B2B prices, B2C prices, the management of customers, the management of orders from purchases to returns, the management of taxes and shipping, and the management of prices including sale prices, discounts with coupons, and incentive pricing. Moreover, integrated email is also included so that the site owner can utilize auto-responses such as confirmations.

• Wikipedia explanation of E-Commerce
• SearchCIO.com Definitions
• E-commerce guide

Affiliate Marketing refers to an arrangement between E-Commerce individuals and Website owners in which revenue sharing takes place based upon a link formed between the two. The payment is based upon specific performance measures as agreed to from the onset of the relationship or affiliation between the two parties involved. This might involve registrations that the affiliate refers, a specified number of sales, or the number of clicks generated from the Website.

The two companies or individuals have an arrangement that states that the E-Commerce Website will pay a commission or fee to the second Website if someone clicks from their site to the E-Commerce site and buys something. An arrangement is set up. Software tracks and reports the “commission-based” clicks, sales, or registrations. The primary purpose of affiliate marketing is to extend the reach of the E-Commerce Website in order to gain an increase in revenue or sales.

• Wikipedia explanation of affiliate marketing
• Affiliate Programs Directory
• Affiliate Marketing UK
• Affiliate Marketing Forum