An Introduction
Online transaction is when we buy any goods online and we pay for those goods online. Everything is safe and secure in online transactions. In this, It happens via confirmation of the OTP sent to your phone, which is very well secured. There is no need to do any kind of paperwork in online transactions.
There are three stages of online transaction i.e. first - registration, second - placing the order, and third - online payment. This online transaction is completed by combining all three stages. Online transactions are used to buy or sell any item on an online platform such as Flipkart, Amazon, or eBay etc.
Stages of Online Transactions:
There are three stages of online transactions-
Pre-purchase/Sale- The company advertises the product in this stage, it tells about some important things through the advertisement so that the customer can get to know about that product. These advertisements are made in such a way that the customer who is attracted to the advertisement is ready to buy the product.
Purchase / Sale - In this stage, when the customer is attracted to buy goods, he likes the goods, then he buys the goods and he pays online for those goods.
Delivery Stage - In this stage the customer buys the final goods and gets the delivery to the themself.
Steps Involved in Online Shopping (Online Transaction):
The following steps involved in online shopping (online transaction)
Registration: The first step is registration in online transactions. In this step, the customer has to register himself on a website such as Flipkart, Amazon. To register, he has to provide his email id, name, address and all other similar details, which the website saves and Always keep these details secure and only. After registering on the website, an account is created and he has a shopping cart, both these things are password-protected.
Placing an Order: In this, the customer puts whatever items he likes from his registered shopping website in the shopping cart. This shopping cart then keeps the details of all the items saved, such as how much money it is in, how much is in the amount, it saves all the things with the shopping cart. Then whenever the customer has to order those things, by paying online, he can get all those things.
Payment: The buyer gets a lot of options for placing orders, which are safe and secure, the payment options that are available here are very secure, they have high-level encryption so that the financial details of the buyer cannot be leaked like his/her card number, his/her bank account number, his/her password, all these things could not be leaked. Below are some payment methods in which the buyer can choose how to pay.
Cash on Delivery: In cash on delivery, the customer pays wherever he wants his product to be delivered. He can make the payment from any method, whether it is through card or cash.
Cheque: In this step, after selecting the cheque option in the payment method, the payment is made in the cheque. First, the customer has to send the cheque to the seller and when the seller withdraws the cash from the cheque then he sends the goods to the customer whatever he ordered.
Net Banking Transfer: Payment in this step is from the buyer's account. First, the buyer transfers money through electronic methods to the seller's account. When that money comes from the seller's account, then the seller dispatches the product to the buyer's address.
Credit or Debit Card: In this step, the buyer has to share the details of his credit or debit card with the seller. When the buyer shares his details with the seller, the seller extracts the specific amount of money from the buyer's account. The confirmation message for the transaction goes through the OTP to the buyer and then when the buyer enters that OTP, the specific amount is deducted from the buyer’s account.
Security and Safety of E- Business:
1. Transactional Risks: The common transactions risks of online dealings are:-
Default an Order- Suppose you bought something online from a site and paid for it, but the seller can deny that you have placed the order or paid for the order. The seller can also refuse to deliver the goods in this way.
Default on Delivery - It often happens that you have placed an order and the product sent to the address of someone else instead of your address (that you have inserted).
Defaulter Payment - It happens very often that the seller does not get the same payment, but the customer who claims that he paid. To avoid this problem, the website provides cookies which are like a personal ID or caller ID which extracts the name, address, and previous purchase records of the customer.
2. Data Storage and Transaction Risk: Upon registering on a site, we share some personal information on it, such as our name, our address, email ID, phone number. All this information is saved and kept in its data. Due to this, the probability increases that our personal information can be stolen by anyone and can put us at high risk.
The risk involved in data storage is- Virus (Vital information under siege)- A lot of computer viruses are deadly, which can enter your computer in any way such as through a pen drive, through an email ID, or through a disk, which can enter your computer. All the data present in it, all the important information can be deleted. Because of which you may have a lot of problems and there may be too much time wasted.
Hacking – Hackers are unauthorised people. They can destroy all your data and can also steal it, due to which there is a lot of damage to the website.
3. The Risk of Threat Intellectual Property and Privacy: The information you provide to the website may get copied by any other online vendors, who may start sending you promotional messages and even hackers may pretend to be customers themselves. A fake website may be developed instead of the original website and they take away advance money from customers and not supply any product to the customers.
Risks Related to Online Shopping
Besides the risks related to data storage, transactions, and threat to privacy, there are some other risks involved with online shopping too. These are as follows:
Customer disputes
Online security issues
Credit card fraud
The problems related to the return of goods and their warrant
Logistic issues
Warehousing issues
FAQs on Online Transactions: Understanding E-Transactions
1. What exactly is an online transaction?
An online transaction, or e-transaction, is any business or financial exchange that happens over the internet. Instead of using physical cash or cheques, you use electronic methods to buy goods, pay for services, or transfer money. Examples include shopping on Amazon, paying a utility bill through a website, or sending money using a banking app.
2. What are the basic steps to buy something from an e-commerce website?
To buy something online, you generally follow these three simple steps:
- Registration: You first create an account on the website by providing basic details like your name, email, and address. This creates your personal, password-protected 'shopping account'.
- Placing an Order: You browse for items you want and add them to a virtual 'shopping cart'. Once you are done, you proceed to checkout.
- Payment: You choose a payment method, like a card or UPI, and enter the required details to complete the purchase.
3. What are the most common ways to pay for things online?
There are several popular methods for online payments:
- Credit or Debit Cards: Using your card number, expiry date, and CVV.
- Net Banking: Directly transferring funds from your bank account.
- Digital Wallets: Using pre-loaded money in wallets like Paytm or Amazon Pay.
- Unified Payments Interface (UPI): Making instant payments using a UPI ID or by scanning a QR code.
4. What does the term 'E-com transaction' mean on a bank statement?
When you see 'E-com transaction' or 'E-commerce transaction' on your bank or card statement, it simply means the payment was made to an online business or a website. It helps you identify your online shopping expenses separately from purchases made at physical stores.
5. Why are e-transactions becoming so popular?
E-transactions are popular mainly because they are convenient and efficient. They save time as you don't need to visit a bank or store physically. They also reduce the risk of carrying cash and provide a digital record of all your spending, which makes managing money easier.
6. What is the main difference between NEFT, RTGS, and IMPS for transferring money?
While all three are used to transfer money electronically, they differ mainly in speed and timing:
- IMPS (Immediate Payment Service): This is instant and works 24/7, even on holidays. It's best for urgent, small-to-medium transfers.
- RTGS (Real-Time Gross Settlement): This is also a real-time system, but it's typically used for high-value transactions (usually above ₹2 lakh) and operates during banking hours.
- NEFT (National Electronic Funds Transfer): This processes transactions in batches every half hour during banking hours. It's suitable for non-urgent transfers with no minimum value.
7. Why is using a credit card often considered safer than a debit card for online shopping?
Using a credit card is often seen as safer for two key reasons. First, a debit card is directly linked to your bank account, so any fraud could empty your savings. A credit card has a pre-set credit limit, which caps the maximum loss. Second, credit card companies often offer stronger fraud protection and make it easier to dispute and reverse unauthorised charges while they investigate.
8. What happens behind the scenes when you pay online with a card?
When you enter your card details and click 'pay', a secure process begins. Your information is encrypted and sent to a payment gateway. This gateway securely communicates with your bank to verify if you have enough funds or credit. If approved, the bank authorises the payment, the gateway informs the seller's website, and your order is confirmed—all in just a few seconds.
9. What are some simple but important safety tips for any online transaction?
To stay safe while transacting online, always remember to:
- Use a secure and private Wi-Fi connection, not public Wi-Fi.
- Only shop from well-known and reputable websites. Look for 'https://' in the site address.
- Never share your password, PIN, or OTP with anyone.
- Regularly check your bank statements for any unrecognised transactions.
