Question

Attempt the following.

Explain process of online transactions.

Answer 1

Online transaction refers to the process of buying and selling that takes place through the internet. It can be done only with the help of a proper internet connection. Here, a consumer purchases a product/service online and makes the payment through online transaction. There are three main stages in online transactions, namely, pre-purchase/sale, actual purchase/sale and delivery stage. It involves following steps.

1. Registration:

Registration is the first step in the process which is required for any online transaction. A person who wants to perform such transaction has to register with the online vendor by filling up a registration form. It has basic details like customers email-id, name, address and other details. These details are saved and are safe with the website. Once registered, the customer can login to the website to buy a product/ service from that site. The buyer’s ‘account’ and his ‘shopping cart’ provide online record of what has been selected while browsing the site.

2. Placing an order:

It is the second step whereby a customer selects the product/service he wants to buy and adds it in the shopping cart. The shopping cart gives a list of all the items the buyer has selected to purchase, the quantity to be purchased and the price for the each item. After selection of all products to be purchased, the buyer proceeds to make the payment.

3. Payment:

Making the payment is the last step in the process. The buyer has to select the payment option (i.e., the way in which he is going to pay). These payment systems are secured with very high level encryptions to make all financial information completely secure.

The ways available for a customer to make payment are as follows:

1. Cash on delivery: The customer makes the payment after he receives the product. It is made at the doorstep either in cash or by debit or credit card.
2. Cheque: The payment is made through cheque. The buyer sends a cheque to the seller and the seller delivers the product after the realization of the cheque.
3. Net Banking transfer: The payment is transferred electronically (through internet) from the buyer’s account to the seller’s account. After the receipt of the payment, the seller dispatches the goods.
4. Credit or debit card: The buyer makes payment using the debit or credit card. Debit cards or credit cards are popularly known as ‘Plastic Money’. It is used most of the times to make online payments.
5. Digital cash: Digital cash is a form of electronic currency. It exists only in cyberspace and has no real physical properties. It offers the ability to use real currency in an electronic format.