Transaction Process

As with any trading processes, the online transactions involve the following stages:

1. Search

For making a purchase, the prospective customer has to find an appropriate vendor by using various web sites, either directly or through a search engine.

2. Order

Once the vendor has been found and goods are identified, the customer makes contact and negotiates the terms. When satisfied, the customer proceeds to the checkout that involves filling up a registration form to have an account with a password. Thereafter, he can place the order for the items put by him in his virtual shopping cart, an online record of what has been picked up while browsing the online store.

3. Payment

The normal way for paying online purchases is by the credit card. The customer enters the credit card numbers, expiry date and billing address on the order form, and the vendor can verify the details. Debit cards, or store’s value cards can also be used for the purpose. Alternatively, payments can be made by cheques sent by post.

4. Delivery

Once the payment is made or is assured, the vendor arranges for delivery of goods as per instructions of the buyer.

5. After Sales Service

In any transaction, there can be problems like damaged or faulty goods. For items such as machinery or consumer durables, there can be a provision of warranty or maintenance. The e-Vendors have to make the necessary arrangements for attending to such complaints and services.

Payment Mechanism of Online Transactions

1. Finding the Seller

Buyer will go through the website of the seller. Online shopping buyer has to register with online seller by filling up a registration form. Registration means buyer will create an ‘account’ with online seller by providing a ‘password’.

2. Selection of Products

Buyer selects the products after comparing prices and quality offered by other sellers.

3. Placing an Order

While browsing the website, the buyer drop the items selected in his shopping cart. Shopping cart is an online record of the items picked up by the buyer while browsing the website.

4. Payment Mechanism

Payment for the purchases through online shopping may be done in any of the following ways:

  1. Cash on Delivery (COD): The payment for goods ordered online may be made in cash at the time of physical delivery of goods.

  2. Cheque: The buyer may send a cheque to the online vendor. The delivery of goods are made upon the realisation of cheque.

  3. Net-banking transfer: Buyer may transfer the amount for the agreed price of the transaction to the account of the online vendor.

  4. Credit or Debit Card: In case of Credit Card, the buyer can make purchases on credit. Issuing bank transfers the amount involved in the transaction to the credit of the seller and debit the buyer’s account. The debit card allows purchases up to the specified amount that is Buying in his account. (available balance)

  5. Digital Cash: This is a form of electronic currency that exists in cyber space. In favour of the customer the bank issues digital cash for the amount he paid. Bank will supply a special software that will allow the customer to draw digital cash from his account. Digital cash is used for purchases over the web.

5. Delivery

The product is given to the buyer after receiving the payment.