Visitor places the order on the website and it is sent to the merchant's web server in encrypted format. This is usually done via SSL (Secure Socket Layer) encryption.The transactions details are then forwarded to the concerned Payment Gateway.The transaction information is then passed on to the merchants acquiring bank by the Payment Gateway.Merchants acquiring bank then forwards the transaction information to the issuing bank (one that issued the credit card to the customer).Then the card issuing bank sends a response back to the Payment Gateway. The response includes information that whether the payment has been approved or declined. In case of declination the reason is also sent in the response.The response is then forwarded by the Payment Gateway to the merchant's server.At merchants server the response is encrypted again and is relayed back to the customer. This allows the customer to know that whether the order has been placed successfully or not.The entire process typically takes less than 5 seconds. At the end of the bank day (or settlement period), the acquiring bank (or card issuing bank) deposits the total of the approved funds in to the merchant's nominated account.
Advantages & Limitations
Online shopping or e-shopping is a form of electronic
commerce which allows consumers to directly buy goods
or services from a seller over the Internet using a web
Alternative names are: e-web-store, e-shop, e-store,
Internet shop, web-shop, web-store, online store, online
storefront and virtual store.
Traditional shopping is a term used
to refer to the way of doing shopping
where you visit stores and buy goods.
In traditional shopping one has to
leave home, either walk or take a
ride to the store or shopping center
in order to buy what one wants.
Traditional versus Online shopping:
One of the major difference between these two ways of
transaction is time saving.
Convenience is also an important feature. People can go
shopping online whenever they want or can.
But an advantage of shopping in traditional way is that
people can check out their goods with their own eyes and
You are able to browse
and search for items, as
you would in a regular
store; there is a wider
range of products,
sizes, and colors of
products, as you would
find in a warehouse;
and most online stores
contain reviews of
products by people who
have already purchased
and tried out the
Process of online shopping:
A consumer uses Web browser to connect to the home
page of a merchant's Web site on the Internet.
Methods of Payment:
Checks and Money Orders
Credit Card: The most popular payment method. The
advantage is the ease for the customer to pay.
Debit Card: Debit card, alternately called a bank card
or check card. Most online merchants will accept debit
Payment Websites: Websites like PayPal and Google
Checkout offer a means of instant payment if both
parties have an account with them.
PayPal: PayPal is an e-commerce payment processing
company owned by eBay.
Wire Transfer: A wire transfer is a bank account to
bank account transfer of money.
Electronic Check: The electronic check is a method of
payment which draws cash from a checking account,
eliminating the paper check
Checks and Money Orders : Customers who don't
have credit cards, or are paying from a company or
municipality may want to pay by check or money order.
Purchase Order: A purchase order, or P.O., is a
request or agreement to be paid at a later date for an
Bank Transfer: The bank transfer is similar to the
debit card method – it's a method of transferring cash
from one bank account to another account.
Mobile Payments: The mobile payment option is
relatively new and gaining popularity in foreign
Advantages of Online Shopping:
Convenience: One of the biggest benefits of online
shopping is that you can buy almost anything you could
imagine without ever leaving your house.
Selection: Online stores are able to carry more
selection than traditional brick-and-mortar stores.
Information: Online shops tend to provide more
information about items for sale than you would get in a
physical store(unless you asked a sales associate).
Price: Because online stores don’t have to pay rent for a
storefront in a nice part of town and tend to sell much
larger quantities of goods, they can offer to sell products
for a much lower price.
Availability: Online retailers accept orders twenty four
hours a day while consumers who wish to shop at
traditional stores have to be available to visit the store
during normal business hours.
Disadvantages of Online Shopping:
Hands-On Inspection: One thing that online stores
can’t replace is the experience of actually seeing and
touching the item you are considering buying.
Shipping: Some major online retailers now offer free
shipping for their products, but many require you to
meet a minimum order cost to qualify.
Wait Time: waiting for your item to arrive is another
downside of online shopping. One of the great pleasures
of shopping at a store is the instant gratification.
Privacy: when you shop online, you waive certain
privacy rights to the online retailer.
Many people have fear to disclose personal and private
information for security.
Limitations of Online Shopping
Risky credit card purchase: It is pertinent to do
online shopping from a reliable and a trusted web portal.
A number of these web portals ask for payment through
a credit/debit card.
A never-ending wait for the product to arrive:
You enter a shop. Choose an item of your choice. Pay the
bills at the counter and the item is yours. After all of it,
you walk into your house with gaiety with your
possession in hand
No bargaining: Online shopping does not offer us that
liberty to bargain and we are bound to buy the item in
the quoted price.
Deceptive pictures: What may appear to have a matte
texture in the picture may actually turn out to be quite
glossy and shiny in reality.
Lack of options: In online shopping, you do not get
the same item spread out in varied forms and shape,
vying for your attention.
Makes you lazy: With the advent of a new
phenomenon called online shopping, people who have
an access to the internet, hardly show an inclination to
venture out of their house into the open.
Deprives you of tangibility: Online shopping makes
it extremely difficult to exchange items as well, in case of
Shipping costs: Shipping costs in most cases raise the
price of an article and you may end up buying it at a rate
higher than the market price.
Internet does not come free of cost: every time you
open a page on an online shopping portal to choose a
specific item, you get charged for it.
The Internet is a great resource and can be a powerful
tool for finding information, shopping, and
communicating. But, just like everything else in life, you
need to be careful using it. There are some bad people
who will try to steal your information online, but if you
take the proper precautions, identity theft will be
unlikely to happen to you.
Here are some ways to protect yourself when
Check out sellers: Conduct independent research
before you buy from a seller you have never done
business with. Some attackers try to trick you by creating
malicious websites that appear legitimate, so you should
verify the site before supplying any information.
Make sure the site is legitimate: Before you enter
your personal and financial information to make an
online transaction, look for signs that the site is secure.
Protect your personal information: Before
providing personal or financial information, check the
your information will be stored and used.
Keep a paper trail: Read your credit card statements
as soon as you get them to make sure there aren’t any
unauthorized charges. If there is a discrepancy, call your
bank and report it immediately.
Use safe payment options: Credit cards are
generally the safest option because they allow buyers to
seek a credit from the issuer if the product isn’t delivered
or isn’t what was ordered.
Turn your computer off when you’re finished
shopping: Many people leave their computers running
and connected to the Internet all day and night. This
gives scammers 24/7 access to your computer to install
malware and commit cyber-crimes.