E-commerce is the buying and selling of goods and services electronically, including consumer-based and business-to-business transactions. It has no barriers of time or space and can involve the transfer of funds. An example is buying a book from an online bookstore, which involves payment and shipping. Businesses can also conduct electronic transactions with each other.
Electronic commerce, sometimes called e-commerce, is the buying and selling of goods and services electronically. It also includes additional forms of commerce performed over the Internet, such as the transfer of funds. Electronic commerce includes consumer-based business and business-to-business transactions. It has no barriers of time or space. For example, a consumer in one country is immediately able to complete a transaction with a business in another country.
An e-commerce transaction can be as simple as buying a book from an Internet company, for example. The consumer purchases the book he wishes to purchase and places it in an electronic shopping cart. The online bookstore completes the transaction with the consumer by asking for payment and delivery information. The consumer then provides this information to the online bookstore.
In this example, if the customer’s payment information is valid, the online bookstore receives payment from the consumer by charging a credit card or assuming some other form of payment. The consumer receives an indication of the completion of such a transaction and possibly separate shipping information. The online bookstore then ships the book to the consumer. This online bookstore might have a physical store where consumers can buy books, or it might just be a virtual store.
Another form of e-commerce is the transfer of funds between bank accounts. If the consumer used a credit card to pay the online bookstore for the book purchased, the credit card company will need to transfer funds to pay the online bookstore for the transaction. When the consumer’s credit card payment is due, rather than sending a payment by mail, the consumer can transfer funds from their account to the online credit card company to pay for the book and any other charges made with the card.
The online bookstore can complete another form of electronic commerce when it ships the consumer’s book. The online bookstore may schedule shipping of the book with a shipping company. After the shipping company receives notification from the online bookstore that an item is ready to ship, the shipping company will pick up the shipment from the online bookstore. The online bookstore may send the consumer a shipping notice and information to track the book’s location during the shipping process. At some point, the online bookstore will need to wire funds to the shipping company to pay for shipping the book.
Businesses can also conduct electronic business transactions directly with each other. The online bookstore will place an order from a book publisher for a certain number of books to have in its inventory. The book publisher will receive payment via a funds transfer arranged by the online bookstore. The book publisher will arrange for the books to be shipped to the online bookstore storage facility. Then the book publisher will also need to transfer funds to the shipping company to finalize the transaction.
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