Cards & Payments

Online transactions, unlike arm's length transactions in physical exchange, are prone to a number of risks. Risks refers to the probability of any mishap that can result in financial, reputational or psychological losses to the parties involved in a transaction. Because of the greater probability of such risks in the case of online transactions, security and safety issues become the most crucial concern in e-business. One may broadly discuss these issues under three headings: transaction risks, and threat to intellectual property and privacy risks.

Transaction risks:
Online transactions are vulnerable to the following types of transaction risks-

Seller denies that the customer ever placed the order or the customer denies that he ever placed the order. This may be referred to as ‘default on order taking/giving’.

The intended delivery does not take place, goods are delivered at the wrong address, or goods other than ordered may be delivered. This may be regarded as ‘default on delivery’.

Seller does not get the payment for the goods supplied whereas the customer claims that the payment was made. This may be referred to as ‘default on payment’

Thus, in e-business risk may arise for the seller or the buyer on account of default on order taking/giving, delivery as well as payment. Such situations can be averted by providing for identity and location/address verification at the time of registration, and obtaining authorisation as to the order confirmation and payment realization. These sites provide protection to the customer against default on delivery and reimburse the payments made up to some extent.

As for the payments, we have already seen that in almost 95 percent of the cases people use credit cards for their online purchases. At the time of confirming the order, the buyer is required to furnish the details such as the card number, card issuer and card validity online. These details may be processed offline; and only after satisfying himself about the availability of the credit limits, etcThe seller may go ahead with the delivery of goods. Alternatively, e-commerce technology today permits even online processing of the credit card information. For protecting the credit card details from being misused, shopping malls these days use encryption technology.

Digital Marketing
Data storage and transmission risks:
Digital Commerce

Information is power indeed. But think for a moment if the power goes into the wrong hands. Data stored in the systems an en-route is exposed to a number of risks. Vital information may be stolen or modified to pursue some selfish motives or simply for adventure.

Data may be intercepted in the course of transmission. For this, one may use cryptography. It refers to the art of protecting information by transforming the message into ‘plaintext’. This is similar to using ‘code words’ with someone so that others do not understand your conversation.

Risks of threat to intellectual property and privacy

The Internet is an open space. Once the information is available over the internet, it moves out of the private domain. It then becomes difficult to protect it from being copied. Data furnished in the course of online transactions may be supplied to others who may start dumping a host of advertising and promotional literature into your e-mail box. You are then at the receiving end, with little respite from receiving junk mails.

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