Electronic Commerce

E-Commerce or Electronic Commerce means buying and selling of

goods, products, or services over the internet. E-commerce is also
known as electronic commerce or internet commerce. These services
provided online over the internet network. Transaction of money, funds,
and data are also considered as E-commerce. These business
transactions can be done in four ways: Business to Business (B2B),
Business to Customer (B2C), Customer to Customer (C2C), Customer
to Business (C2B). The standard definition of E-commerce is
a commercial transaction which is happened over the internet. Online
stores like Amazon, Flipkart, Shopify, Myntra, Ebay, Quikr, Olx are
examples of E-commerce websites. By 2020, global retail e-commerce
can reach up to $27 Trillion. Let us learn in detail about what is the
advantages and disadvantages of E-commerce and its types.

E-Commerce or Electronic Commerce

E-commerce is a popular term for electronic commerce or even
internet commerce. The name is self-explanatory, it is the meeting of
buyers and sellers on the internet. This involves the transaction of goods
and services, the transfer of funds and the exchange of data.

So when you log into your Amazon and purchase a book, this is a classic
example of an e-commerce transaction. Here you interact with the
seller (Amazon), exchange data in form of pictures, text, address for
delivery etc. and then you make the payment. As of now, e-commerce
is one of the fastest growing industries in the global economy. As per
one estimate, it grows nearly 23% every year. And it is projected to be a
$27 trillion industry by the end of this decade.
Types of E-Commerce Models
Electronic commerce can be classified into four main categories. The
basis for this simple classification is the parties that are involved in the
transactions. So the four basic electronic commerce models are as
follows,

1. Business to Business

This is Business to Business transactions. Here the companies are doing

business with each other. The final consumer is not involved. So the
online transactions only involve the manufacturers, wholesalers,
retailers etc.

2. Business to Consumer

Business to Consumer. Here the company will sell their goods and/or
services directly to the consumer. The consumer can browse their
websites and look at products, pictures, read reviews. Then they place
their order and the company ships the goods directly to them. Popular
examples are Amazon, Flipkart, Jabong etc.

3. Consumer to Consumer

Consumer to consumer, where the consumers are in direct contact with

each other. No company is involved. It helps people sell their personal
goods and assets directly to an interested party. Usually, goods traded
are cars, bikes, electronics etc. OLX, Quikr etc follow this model.

4. Consumer to Business
This is the reverse of B2C, it is a consumer to business. So the
consumer provides a good or some service to the company. Say for
example an IT freelancer who demos and sells his software to a
company. This would be a C2B transaction.

What is m-Commerce?

Examples of E-Commerce

 Amazon
 Flipkart
 eBay
 Fiverr
 Upwork
 Olx
 Quikr
Advantages of E-Commerce

 E-commerce provides the sellers with a global reach. They remove

the barrier of place (geography). Now sellers and buyers can meet in
the virtual world, without the hindrance of location.
 Electronic commerce will substantially lower the transaction cost. It
eliminates many fixed costs of maintaining brick and mortar shops.
This allows the companies to enjoy a much higher margin of profit.
 It provides quick delivery of goods with very little effort on part of
the customer. Customer complaints are also addressed quickly. It
also saves time, energy and effort for both the consumers and the
company.
 One other great advantage is the convenience it offers. A customer
can shop 24×7. The website is functional at all times, it does not
have working hours like a shop.
 Electronic commerce also allows the customer and the business to
be in touch directly, without any intermediaries. This allows for
quick communication and transactions. It also gives a valuable
personal touch.
Disadvantages of E-Commerce

 The start-up costs of the e-commerce portal are very high. The setup
of the hardware and the software, the training cost of employees,
the constant maintenance and upkeep are all quite expensive.
 Although it may seem like a sure thing, the e-commerce industry has
a high risk of failure. Many companies riding the dot-com wave of
the 2000s have failed miserably. The high risk of failure remains
even today.
 At times, e-commerce can feel impersonal. So it lacks the warmth of
an interpersonal relationship which is important for many brands
and products. This lack of a personal touch can be a disadvantage for
many types of services and products like interior designing or the
jewelry business.
 Security is another area of concern. Only recently, we have
witnessed many security breaches where the information of the
customers was stolen. Credit card theft, identity theft etc. remain
big concerns with the customers.
 Then there are also fulfillment problems. Even after the order is
placed there can be problems with shipping, delivery, mix-ups etc.
This leaves the customers unhappy and dissatisfied.
Advantages and types of Electronic Payment System
Key Takeaways

 Electronic Payment System refers to making online transactions without cash or

cheques.
 The RBI regulates the electronic payment systems in India.
 Electronic Clearing services allow banks and non-banking institutions to debit or credit
money instantly.
 NEFT, IMPS, and RTGS allow cashless fund transfers between bank accounts.
 E-payment systems are safe, speedy and cost-effective alternatives to paper-based
payment systems.
The Reserve Bank of India keeps introducing modern and convenient methods of fund
transfers. Today, electronic payment systems have become extremely common in India,
paving the path for a cashless economy. This article explains the types and advantages
of electronic payment systems. Read on to know more.

What is Electronic Payment System?

Electronic Payment System (e-Payment) is a type of payment conducted via electronic

or online mediums. Online payment systems eliminate the need for cash or cheque
payments. It is a unique payment method that allows you to conduct online transactions
via digital wallets, bank cards and internet banking systems. The funds are directly
debited from your bank account.

Types of Electronic Payment System

The RBI has introduced various cost-effective payment solutions as an alternative to

cash transactions. The commonly used types of electronic payment systems include:

ECS Payments
For bulk and repetitive payments like salary credit, interest payment, dividend payments
from companies, etc., the RBI introduced the Electronic Clearing Service (ECS) credit
scheme in the 1990s. This system enables payers to credit a specific amount directly
into the payees account on a particular date. ECS enables recurring payments to banks,
Mutual Fund companies, service providers, utility companies, etc. The bank collects
payment from your account and passes it on to the relevant companies.

Electronic Fund Transfers: NEFT, RTGS, and IMPS

National Electronic Fund Transfer (NEFT), Real-Time Gross Settlement (RTGS), and
Immediate Payment Services (IMPS) are three modes of electronic fund transfers. With
NEFT, you can transfer any amount of money, while the minimum transaction limit for
RTGS is INR 2 lakhs. These transactions are cleared in half-hour batches, whereas
IMPS transactions have a daily limit of INR 5 lakhs and are instantly cleared.
Clearing Corporations
Clearing Corporations settle trades in money markets, foreign exchange markets and
government securities. Banks and other financial institutions set Clearing Corporation of
India Limited (CCIL) as an industry-wide clearing company across India.

Pre-Paid Payment Systems

These include the purchase of goods and services using bank cards. You can use
internet and mobile banking facilities, third party or bank digital and mobile wallets, and
credit and debit cards to make payments on domestic and international e-commerce
websites.

Advantages of Electronic Payment System

Having explained what is e-payment system, here are its primary advantages.

Lower costs
E-payments eliminate the costs associated with paper cheques, cash and postage.
Payments conducted via electronic payment systems like credit card or debit card
charges, processing fees, internet fees, etc., are lower.

Highly accessible
You only need an internet-enabled device like a smartphone or computer to access the
various type of types of electronic payment systems from any place, any time.

Speedy transactions
You can buy the product within seconds, transfer money, pay your loan EMIs, get salary
credits, and more with electronic payments.

Final Note

E payments have undoubtedly revolutionised the banking sector. Today, you can book
all types of services and buy almost anything without exchanging a single rupee in cash.
All transactions are quick and secure, making e payments the ideal money transaction
method.

Download the digibank by DBS app to get started and even open your savings
account with us.

What is Electronic Payment System?

An electronic payment system, often referred to as e-payment, is a
digital solution that enables customers to make payments and conduct
electronic or online transactions without the need for physical cash or
cheques. It’s the technological bridge that connects individuals and
businesses to a world of financial possibilities. Instead of reaching for
cash or writing cheques, we can now effortlessly transfer funds
electronically with just a few clicks or taps.

Besides, electronic payment systems have revolutionized the way we

handle our finances, making transactions quicker, more efficient, and
accessible to anyone with a bank account. By eliminating the need for
physical currency, e-payment systems have significantly reduced
transaction costs, eliminated paperwork, and even reduced labour costs
for businesses.

For companies into e-commerce, having an electronic payment system

is not just beneficial; but essential. It helps businesses accept payments
in their online stores and cater to more consumers who prefer the
convenience of online shopping.

Types of Electronic Payment System

Electronic payments come in various forms, each tailored to suit different
needs and preferences. Let’s take a closer look at some of the most
common types:

1. Card Payments: Credit and Debit Cards

Credit and debit cards have become ubiquitous in our daily lives. They
allow us to make purchases by simply swiping our cards at the point of
sale. These cards are linked to our bank accounts, enabling us to spend
within our financial means or borrow money (in the case of credit cards)
for a limited period.

2. Electronic Fund Transfers

Electronic fund transfers, such as National Electronic Funds Transfer
(NEFT) and Real Time Gross Settlement (RTGS), provide a quick and
secure way to transfer money between bank accounts. NEFT is typically
used for smaller transactions, while RTGS is reserved for larger, time-
sensitive transfers.
3. Online Bank Transfers
Online bank transfers allow individuals to move money directly from their
bank accounts to another party’s account. This method is often used for
bill payments and peer-to-peer transactions.

One example of online bank transfers is when you pay your monthly
utility bills directly from your bank account through the utility company’s
online payment portal. It’s a secure and convenient way to handle
regular or recurring payments.

4. Virtual Payment Cards

Virtual payment cards are digital versions of physical credit or debit
cards. They can be used for online purchases without exposing your
actual card details. Virtual cards enhance security and reduce the risk of
fraud.

Imagine using a virtual payment card to make an online purchase from a

new, unfamiliar website. By doing so, you’re safeguarding your actual
card details while enjoying the benefits of secure transactions,
minimizing the risk of unauthorized use of your card.

5. Digital Wallets
Digital wallets, such as PayPal, Apple Pay, and Google Pay, have
gained popularity for their convenience. Users can link their bank
accounts or credit cards to these wallets and make payments with a
simple tap or click on their smartphones.

How Does the Electronic Payment System Work?

Electronic payment systems are sophisticated platforms that facilitate the
transfer of funds between parties, often initiated from one bank account
to another. Here’s a step-by-step explanation of how electronic
payments typically operate:
1. Entering Payment Information
When making a purchase or initiating a transfer, users enter their
payment information into the system. This could be credit card details,
bank account numbers, or digital wallet credentials.

2. Payment Gateway
The payment information is then sent to a payment gateway, which acts as
a bridge between the user, the merchant, and the financial institution.
The payment gateway plays a crucial role in approving or denying
payment requests.
3. Validation and Security
Before processing the transaction, the system validates the payment
information to ensure it is accurate and legitimate. Stringent security
protocols and encryption techniques are employed to safeguard the data
during transmission, making electronic payments highly secure.

4. Transaction Processing
Once the payment is approved, the transaction is processed, and the
funds are transferred from the user’s account to the merchant’s account
or the recipient’s account.

Further, electronic payments can be broadly categorized into two main

types: one-time payments and recurring payments. Each serves a
unique purpose in facilitating transactions between customers and
service providers or vendors.

Categorisation of Electronic Payments

1. One-Time Payments
One-time payments refer to individual, isolated transactions where a
customer makes a single payment for a specific product, service, or any
other purchase. This payment type is prevalent in various online
transactions, such as purchasing a product from an e-commerce store,
paying for a flight ticket, or buying digital content.
Process for One-Time Payments
 The customer initiates the payment by selecting the desired product or
service and proceeding to the checkout or payment page.
 The electronic payment system processes the payment, securely collecting
the payment details and authorizing the transaction.
 The specified amount is deducted from the customer’s account and
transferred to the vendor or service provider’s account.
 A confirmation of the successful transaction is sent to both the customer
and the vendor.

2. Recurring Payments
Recurring payments involve regular, repetitive transactions where a
customer authorizes a vendor or service provider to deduct a specified
amount from their account at predefined intervals. This is common for
bills, subscriptions, memberships, or any service that requires periodic
payments.

Process for Recurring Payments

 The customer sets up a recurring payment schedule, specifying the
frequency (e.g., monthly, quarterly, yearly) and the amount to be deducted
for the service or subscription.
 The electronic payment system automates the process, deducting the
predetermined amount from the customer’s account at the agreed intervals
without requiring manual authorization for each transaction.
 The funds are transferred to the vendor or service provider’s account, and
the transaction details are provided to both parties for record-keeping.
 Recurring payments provide convenience for both customers and service
providers, ensuring timely payments and a seamless continuation of
services or subscriptions.

Advantages of Electronic Payment Systems

Electronic payment systems offer a plethora of advantages that have
transformed the way we handle financial transactions. Here are some
key benefits:
1. Faster and More Accurate Payments
Electronic payments are lightning-fast compared to traditional methods
like cheques, which require manual processing and clearing. This speed
ensures that funds are transferred quickly and accurately, reducing the
risk of payment delays or errors.

2. Reduced Costs
By eliminating the need for physical cheques and cash handling,
electronic payment systems significantly reduce transaction costs for
both individuals and businesses. There are no expenses related to
printing cheques, postage, or the labour required to process paper
payments.

3. Increased Security
Security is a top priority in electronic payment systems. Robust
encryption and authentication measures protect sensitive financial data,
reducing the risk of fraud and unauthorized transactions. Users can also
monitor their accounts in real-time, quickly spotting any suspicious
activity.

4. Convenience
The convenience of electronic payments cannot be overstated. Whether
you’re shopping online, paying bills, or splitting a restaurant bill with
friends, electronic payments offer unparalleled ease and accessibility.

5. Accessibility
Electronic payment systems are accessible 24/7, allowing users to make
transactions at any time, from anywhere with an internet connection.
This accessibility is especially valuable for international transactions, as
it eliminates geographical barriers.

Related Read: What is Secure Electronic Transaction (SET), and How It

Works
Conclusion
Electronic payment systems have revolutionized the way we handle our
finances. They offer speed, security, and convenience that traditional
payment methods simply cannot match. As technology continues to
advance, we can expect even more innovations in the world of electronic
payments.

Key Takeaways
1. Electronic payment systems enable cashless transactions, saving time and
reducing costs.
2. Different types of electronic payments cater to various needs, from card
payments to digital wallets.
3. The process involves entering payment information, validation, security,
and transaction processing.
4. Advantages include faster payments, reduced costs, increased security,
convenience, and accessibility.

The rise of electronic payment systems has had a profound impact on

the banking sector. Banks have had to adapt and invest in technology to
provide customers with secure and efficient electronic banking services.
Mobile banking apps, online account management, and instant fund
transfers are now standard offerings from banks, all made possible by
electronic payment systems. As a result, customers can enjoy greater
control over their finances and conduct transactions with unprecedented
ease.

With the continued evolution of technology, we can expect even more

convenient and secure payment options, ultimately shaping the way we
interact with our finances for years to come.

Indrajeet Deshpande

Last Updated: August 10, 2023

Customer Relationship Management (CRM) is often referred to as a

process, strategy, or software/technology that enables organizations to
manage relationships with their customers, vendors, and suppliers.
The buyer’s journey has evolved through the years and running a business
today has become more complex than ever. Business owners and salespeople
must keep in touch with their customers, follow-up with prospects,
identify upselling and cross-selling opportunities, and initiate customer
retention programs while ensuring that the company revenue continues to
increase.
CRM enables business owners and salespeople by helping them streamline
the sales process, improve interdepartmental collaboration, and maintain
business relationships.
In this article, we will look at the concept of CRM, different tools and types
of CRM software, and the basic terminology used in CRM. We will also
discuss essential CRM features, benefits, steps to create a strategy and how
to go about choosing the right CRM for your organization.

Table of Contents


o What Is Customer Relationship Management (CRM)?
o What Are the Types of CRM Software?
o The Essential CRM Glossary
o 8 Essential CRM Features
o 4 Challenges of Implementing CRM
o 3 CRM Best Practices to Consider
o 5 of the Best CRM Tools for Your Business
o Creating a CRM Strategy in 5 Steps
o 5 Benefits of a CRM
o How to Choose a CRM for Your Organization?
o Who Needs CRM Software?
o Who Uses CRM Software?
o Next Steps
What Is Customer Relationship Management (CRM)?
Customer Relationship Management (CRM) is often referred to as a process,
strategy, or software/technology that enables organizations to manage
relationships with their customers, vendors, and suppliers.
In this article, we will look at CRM as a technology that helps businesses
maintain customer data , track customer interactions, and improve
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customer relationships.
A CRM software system performs the following activities:
1. Collects customer data from multiple sources and applications and
stores it in a centralized location

2. Automates repetitive sales, marketing, and customer service

processes

3. Tracks prospects and customers through their purchase journey

4. Identifies upselling and cross-selling opportunities

5. Promotes interdepartmental collaboration