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Put simply a shopping cart is some code (scripts written in php, asp, perl etc.) that collates information that is entered by a shopper and retains that information until the shopper ‘checks out’ when it totals everything up. The code can have ‘formulae’ bulit into it to work out Sales Tax, Shipping Costs, Discounts etc. and this code can sit on your Domain Name’s server or on that of a 3rd party.
Finally the cart allows shoppers to enter all of their details: address, credit card details and all this information is then passed on to your payment processor to receive payment from the client and credit it to you (less commissions usually). Finally it can be set up to inform you via e-mail of the details of the sale and to send an e-mail receipt to the shopper.
The fact that everything appears (or should) relatively seamless - colours and backgrounds, the general look - gives the impression that everything is happening on one web page but this can actually involve 3 separate areas: web site / cart / payment processor.
While large online shops such as Amazon have enormously complicated shopping cart systems these are generally not necessary for individuals and small to average size companies who want to sell items from their site and offer shoppers a secure environment in which to do that. (See my FAQ page for more information on security issues).
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