article on online transaction
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Explanation:
ONLINE TRANSACTIONS
Online transactions take many forms. In business-to-business (B2B) transactions, businesses conduct transactions with one another. For example, if Microsoft Corp. purchases office supplies from Office Depot online, both firms are engaged in a B2B transaction. Business-to-consumer transactions (B2C) take place when businesses and consumers conduct business online, such as when individuals buy tickets from Ticketmaster.com. Person-to-person transactions (P2P) are online interactions between two individuals, like those conducted on online auction site eBay. Although these three types of transactions are the most common, other forms do exist. For example, when individuals submit their taxes electronically, they are completing an online transaction.
Not all online transactions involve payment, but the majority do. In a B2C transaction, the most common method of payment is by credit card, which involves a series of smaller transactions. Similar to traditional credit card payments, online credit-card payments make use of a merchant bank that processes and complete transactions. After an online purchase order is submitted, sellers use real-time online processing software to transmit the customer's credit-card information to its merchant bank. Upon receipt of the information, the merchant bank sends a request for approval to an acquiring processor, which transmits the request to the bank that issued the credit card to the customer. The card-issuing bank then transmits an approval or denial code that makes its way back to the seller who initiated the process.
Online B2C payment transactions quite often also make use of check cards, which withdraw money directly from a client's checking account. Customers using check cards on the Internet simply enter their check-card number as they would a credit-card number. Accepting check cards is very similar to accepting credit cards; in fact, the transaction processing methods for both are nearly the same. Despite the complexity involved in these types of transactions, they are usually completed instantaneously.
The payment process for a B2B transaction can differ from that of a B2C transaction, particularly if the business making the sale uses an invoicing system to bill its business clients. In this case, the payment transaction might make use of electronic bill presentment and payment (EBPP) technology, which allows businesses to bill clients and secure payment online. Such an online transaction typically begins when a business e-mails an invoice, which includes a link to an online payment service provider's Web page, to a client. The client can then visit the Web site to view more detailed billing information and submit an electronic payment by clicking a button that automatically debits their checking account. This type of automated payment transaction can only take place, of course, if clients have previously agreed to allow the online payment processor to withdraw funds from their bank accounts.