E-commerce website- what is it?
E-commerce website or e-commerce is the process of buying and selling virtual and physical products and services over the internet. The actual products can be delivered virtually or they can be sent via the traditional postal service so they arrive at the customer’s door through an e-commerce website.
E-commerce website-the process how does it work?
The e-commerce website process can be described from the perspectives of the buyer and of the seller. The buyer first goes through the process of selection of the goods and adds them to the basket, then the buyer would click checkout and would be presented with a secure page to enter personal details including address , name etc. for the e-commerce website transaction Then the buyer is presented with a secure webpage where they can type their credit card details or the buyer can use a service like PayPal that automatically takes care of this step. The merchant or the seller receives the credit card details of the buyer and it delivers the product or service through the e-commerce website process.
A merchant can accept credit cards only if the merchant is authorised and it has paid for a gateway service. The gateway service encrypts the credit card information as it travels over the internet from the buyer’s computer to the seller’s server. E-commerce website is integrated at the back-end to a stock management and control system as well as a Customer Relationship Management system(CRM) to capture the customer demographics and psychographics.
Payment system involved in an e-commerce website
A payment system allows buyers and sellers to transfer funds and/or property. In the context of the e-commerce website, we are talking about a payment system that allows buyers to buy products and seller to receive the payment for their products and services that they have sold.
Most people see only partially what a payment system is and what it can do in e-commerce. Let’s say that you have two banks. One of the banks hosts the account of the buyer who wants to send money to the seller. And the other bank hosts the bank account of the merchant who’s going to receive the money.
When the buyer buys something, two things happen.
Firstly, the amount of funds is subtracted from buyer’s bank account and the merchant’s bank account is credited with the same amount of money. There are also certain bank and credit card fees involved in the transaction and they are paid by one of the parties or by both parties. The transaction can easily be verified by checking out the bank account statements of both parties. All transaction are secure in an e-commerce website.
Secondly, there’s an electronic transfer of information and not of money that takes places over the internet in an e-commerce website. The banks communicate between each other electronically. Plus, there’s also a communication that takes place between the banks and the merchant in e-commerce. They communicate back and forth through process of verification, to make sure that the exact transaction took place at all the endpoints for an e-commerce website.
Popularity of e-commerce website in the market today
The e-commerce website is increasingly popular all around the world. It enables a person to shop at their leisure and outside normal banking and normal shopping hours too. E-commerce website is extremely convenient in today’s lifestyle where people are juggling various roles at the same juncture and provides them more time, to interact socially. People buy on the internet not just virtual goods like eBooks and online training through an e-commerce website. They can also purchase movie tickets, gym memberships, food, toys, cars, laptops, HDTVs, shoes and almost anything that one can find in a physical store, through an e-commerce website today.
Most people use an e-commerce website because of its inconvenience. You can make the purchases from any location in an e-commerce website. E-commerce website shrinks the world and makes more goods available to the consumer, which were possibly not available in the local area. You can compare and procure goods that are cheaper elsewhere, even from abroad. However you do need to keep in mind the UK VAT payable as well as the handling and postage charges in an e-commerce website too. The goods can still turnout to be cheaper through an e-commerce website. You no longer have to allocate a couple of hours each week to do your shopping. You can simply purchase most of the things you need when you are at the office. This will save you time, energy and leave you more time to for leisure and work life balance, if you choose to, through an e-commerce website.
In 2011, it was estimated that more than $961 billion worth of products and services were sold online in the entire world. This was a yearly increase of more than 20%.
Statistics indicate that an e-commerce website is popular in the UK.
UK is the leading developed country in the world when it comes to its share of the internet economy or an e-commerce website. 8.3% of the entire UK economy takes place online. Its size was about £121 billion in 2010 which translates into £2,000 per person. This e-commerce website data was researched by the Boston Consulting Group or BCG.
In addition to this, 13.5% of the retail purchases in UK took place online through an e-commerce website. The e-commerce website economy in the UK is growing at a faster rate than China’s economy. It is expected that it will continue to grow at a rate of 11% per year and it will reach a value of £221 billion in 2016.
Payment gateways and their usage in an e-commerce website.
A payment gateway is an electronic process that makes it easy for merchants to accept credit cards in an e-commerce website. The process works automatically and it’s seamless both from the perspective of the buyer and from the perspective of the merchant, in an e-commerce website.
This piece of software is in the middle between the banks and the merchants in an e-commerce website that enables these transactions. The payment gateways make the payment system work by transferring the funds from the buyer’s bank account to the merchant’s bank account in an e-commerce website. The payment system is the overall big picture system and the payment gateway does most of the leg work when it comes to the communication between the involved parties which are the banks and the merchant in an e-commerce website.
First, the buyer is directed to a secure order form where it can type its credit card details, in an e-commerce website. Then the buyer is redirected back to the online store. In the meantime and behind the scenes, the credit card information is submitted by the secure online form and it arrives at the server of the merchant, in an e-commerce website.
Then the information is taken and used by the Merchant Side API that communicates via the payment gateway with the software of the banks, in an e-commerce website. This piece of software can accept or reject an online transaction and then it can ask the involved banks to transfer funds between each other, in an e-commerce website. Usually, the money arrives in the merchant’s bank account after a couple of days especially if the banks of the buyer and merchant are from different countries, in an e-commerce website.
The e-commerce website sector has not gone through a recession and it’s most likely to grow at a fast pace for the next decades. That’s because the rate of internet penetration all around the world is still low.
Plus, an e-commerce website has the upper hand compared with the traditional ways to do your shopping. It takes less time and you can easily compare different prices of the same product. Even more, you don’t have to wait and you can buy from home.