Electronic Commerce : Transactions

When a customer buys an item from a business he makes a transaction. In a traditional business most stages of a transaction are carried out by a human. E-commerce transactions reduce the need for human intervention to a minimum. This means that an e-commerce purchase can be carried out much more cheaply than a traditional one. As a result goods can be sold more cheaply and companies can make greater profits.

The important steps in an e-commerce transaction are :

1.  The customer browses the web site to decide what he wants to buy.
2.  The customer selects the items that he wants to purchase and identifies how many of each item he wants. This list of items if often known as a "shopping basket".
3.  The customer enters his credit or debit card details to pay for the goods.
4.  The company's computer connects to the computer at the customer's bank to check that the card number is valid, that the card has not been lost or stolen, and that the customer has enough money available to pay for the goods.
5.  The value of the goods is transferred from the cutomer's bank account to the company's bank account.
6.  The customer enters delivery information such as his address so that the goods can be despatched to him.
7.  All of the information about the purchase is placed in a database of orders.
8.  The items purchased are collected together and packed.
9.  The postal service is used to deliver the goods to the customer.

The first seven steps in this transaction process can be carried out without any need to involve an employee of the company.

Sometimes the payment is not taken from the customer's bank account until the goods are despatched. This is particularly likely to be the case if there is a long delay between the order being placed and the goods being despatched.

Often a confirmation email is sent to the customer before goods are depatched. This enables the company to double check that the purchase is a genuine one and provides the customer with a record of the transaction in case the delivered goods differ from those that were ordered.

GCSE ICT Companion 04 - (C) P Meakin 2004