Today’s world is the world of internet, from gathering some information to buying any product everything can be done by internet. eCommerce is one of the most important facets of the Internet to have emerged in the recent times. eCommerce, which is short for electronic commerce, is the process used to distribute, buy, sell or market goods and services, and the transfer of funds online, through electronic communications or networks. Electronic commerce is commonly referred to as online commerce, Web commerce, eBusiness, eRetail, eTailing, e-tailing, or EC. eCommerce or electronic commerce has opened up new vistas of doing business anytime, anywhere.
At any given time, there are approximately 8 million consumers worldwide that actively shop and buy through Web based stores or retailers (nearly one tenth of our world population). Online studies have claimed that online retail revenues will surpass the quarter-trillion-dollar mark by 2011.
How It Works
The three main components of eCommerce are the Merchant Account, the Gateway, and the merchant’s Shopping Cart.
– Customer logs on to Internet to shop and connects to Merchant’s site.
– Customer elects to purchase a service or goods from merchant site.
– Merchants site connects to their Transaction Server (Gateway) through the Internet.
– Transaction Server connects to the Processing Network (ACH) to determine if Customers funds are available.
– Processing Network approves or disapproves transaction.
– If approved, Processing Network tells Transaction Server to proceed with sale.
1. Processing Network authorizes transfer of funds from Customer Bank to Merchant Bank.
2. Transaction Server confirms sale to Merchant’s site
3. Merchants site confirms sale to Customer
4. Depending on setup, Merchant delivers service or goods to Customer.
– If disapproved, Processing Network tells Transaction Server to decline sale.
1. Transaction Server relays decline notice to Merchant’s site.
2. Merchant’s site declines sale to customer.
There are multiple layers of security for both the merchant and customer, both at the site level and in the transaction server/processing network, as well as at the banks. All sensitive information, especially the credit card number, is encrypted before transmission.
It is imperative that an eCommerce website offers absolute security for the transactions that are carried out using credit cards. For the success of any eCommerce website it is necessary that a proper choice of payment gateway is made. A payment gateway is a separate service and acts as an intermediary between the website’s shopping cart and all the financial networks involved with the transaction, including the customers’ credit card issuer and the eCommerce website. If the eCommerce website has already purchased a shopping cart software, it needs to ensure that the payment gateway service is compatible with that shopping cart.
The benefits of eCommerce:
– Purchases can be made 24 hours a day, 7 days a week.
– Ease of purchasing goods.
– Your marketplace is larger and can increase your sales potential.
– Payment for your goods or services can be make immediately.
– Lower Startup Costs Increase Efficiency and Profitability.
– More convenient for customers.
– Reduces your overheads.
– The direct cost-of-sale for an order taken from a website is lower than through traditional means (retail, paper-based), as there is no human interaction during the online electronic purchase order process.
– Transactions can be processed quicker.
– Selling Online allows merchants to target and reach audiences, even on a limited budget. This creates the potential for anyone to sell anything Online.
– You can quickly update prices.
– Easier to Maintain Over Time. If an eCommerce design is done correctly from the very beginning, it will make the task of design maintenance much easier over time.