In India’s journey towards E-payments, and digitization, merchants, as well as customers, are getting comfortable adopting new digital technologies.
With customers getting comfortable with online shopping, nowadays, an eCommerce site and online payment acceptance is a must to have for any business.
Customers are happy with browsing and shopping at any time from anywhere with just a few clicks and along with this rise of online shopping and eCommerce, E-payments are gaining widespread popularity.
COVID and the limitation it has imposed on people who made online payments need time. Many businesses are now offering their products and services online.
However, if you are a business and want to accept e-payments, you have to work on your electronic payment system to provide better and more secure service for your customers.
And to know the e-payment system here is everything you need to know.
What is an e-payment system?
An e-payment or Electronic Payment system allows customers to pay for services via electronic methods.
They are also known as online payment systems. Normally e-payment is done via debit, credit cards, direct bank deposits, and e-checks, other alternative e-payment methods like e-wallets, bitcoin, cryptocurrencies, and bank transfers are also gaining popularity.
Types of e-payment systems
E-payments can be done in the following ways,
Internet banking – In this case, the payment is done by digitally transferring the funds over the internet from one bank account to another.
Some popular modes of net banking are, NEFT, RTGS, and IMPS.
Card payments – Card payments are done via cards e.g. credit cards, debit cards, smart cards, stored valued cards, etc. In this mode, an electronic payment-accepting device initiates the online payment transfer via card
Credit/ Debit card – An e-payment method where the card is required for making payments through an electronic device.
Smart card – Also known as a chip card, a smart card, card with a microprocessor chip is needed to transfer payments.
Stored value card – These types of cards have some amount of money stored beforehand and are needed to make funds transfer. These are prepaid cards like gift cards, etc.
Direct debit – Direct debit transfers funds from a customer’s account with the help of a third party
E-cash – It is a form where the money is stored in the customer’s device which is used for making transfers.
E-check – This is a digital version of a paper check used to transfer funds within accounts.
Alternate payment methods – As technology is evolving, e-payment methods kept evolving with it (are still evolving..) These innovative alternate e-payment methods became widely popular very quickly thanks to their convenience.
E-wallet – Very popular among customers, an E-wallet is a form of prepaid account, where a customer’s account information like credit/ debit card information is stored allowing a quick, seamless, and smooth flow of the transaction.
Mobile wallet – An evolved form of e-wallet, mobile wallet is extensively used by lots of customers.
It is a virtual wallet, in the form of an app that sits on a mobile device. Mobile wallet stores card information on a mobile device.
The user-friendly nature of mobile wallets makes them easier to use. It offers a seamless payment experience making customers less dependent on cash.
QR payments – QR code-enabled payments have become immensely popular. QR code stands for ‘Quick Response’ code, a code that contains a pixel pattern of barcodes or squares arranged in a square grid.
Each part of the code contains information. This information can be merchant’s details, transaction details, etc. To make payments, one has to scan the QR code with a mobile device.
Contactless payments – Contactless payments are becoming popular for quite some time. These payments are done using RFID and NFC technology.
The customer needs to tap or hover the payment device or a card near the payment terminal, earning it a name, ‘tap and go.
UPI payments – NPCI (National Payment Corporation of India) has developed an instant real-time payment system to facilitate interbank transactions.
This payment system is titled UPI(Unified Payment Interface). Payments via UPI can be made via an app on a mobile device.
Biometric payments – Biometric payments are done via using/scanning various parts of the body, e.g. fingerprint scanning, eye scanning, facial recognition, etc.
These payments are replacing the need to enter the PIN for making transactions making these payments more accessible and easy to use.
Payments are done via Wearable devices – Wearable devices are rapidly becoming popular among customers.
These devices are connected to the customer’s bank account and are used to make online payments.
An example of a wearable used for making an online payment is a smartwatch.
AI-based payments – As machine learning and Artificial Intelligence is creating a revolution all around the world, AI-based solutions are becoming more popular.
Payments based on AI such as speakers, chatbots, ML tools, deep learning tools, etc are making it easier for businesses to maintain transparency.
How does the e-payment system work?
Entities involved in an online payment system
The customer / the cardholder
The issuing bank
Working of e-payments can be explained in the following three steps,
Payment initiation – Customer finalizes the product/service and chooses the payment method to initiate the transaction.
Depending on the payment method, the customer enters the required information like card number, CVV, personal details, expiration date, PIN, etc.
The chosen payment method either redirects the customer to an external payment page or a bank’s payment page to continue the payment process.
Payment authentication – The information submitted by the customer along with other details like payment information, and the customer’s account information is authenticated by the operator.
The operator can be a payment gateway or any other solution involved. If everything gets authenticated positively, the operator reports a successful transaction.
VPN stands for “Virtual Private Network” and describes the opportunity to establish a protected network connection when using public networks. VPNs encrypt your internet traffic and disguise your online identity. This makes it more difficult for third parties to track your activities online and steal data. The encryption takes place in real-time.
How does a VPN work?
A VPN hides your IP address by letting the network redirect it through a specially configured remote server run by a VPN host. This means that if you surf online with a VPN, the VPN server becomes the source of your data. This means your Internet Service Provider (ISP) and other third parties cannot see which websites you visit or what data you send and receive online. A VPN works like a filter that turns all your data into “gibberish”. Even if someone were to get their hands on your data, it would be useless.
What are the benefits of a VPN connection?
A VPN connection disguises your data traffic online and protects it from external access. Unencrypted data can be viewed by anyone who has network access and wants to see it. With a VPN, hackers and cyber criminals can’t decipher this data.
Secure encryption: To read the data, you need an encryption key. Without one, it would take millions of years for a computer to decipher the code in the event of a brute-force attack. With the help of a VPN, your online activities are hidden even on public networks.
Disguising your whereabouts: VPN servers essentially act as your proxies on the internet. Because the demographic location data comes from a server in another country, your actual location cannot be determined. In addition, most VPN services do not store logs of your activities. Some providers, on the other hand, record your behavior, but do not pass this information on to third parties. This means that any potential record of your user behavior remains permanently hidden.
Access to regional content: Regional web content is not always accessible from everywhere. Services and websites often contain content that can only be accessed from certain parts of the world. Standard connections use local servers in the country to determine your location. This means that you cannot access the content at home while traveling, and you cannot access international content from home. With VPN location spoofing, you can switch to a server in another country and effectively “change” your location.
Secure data transfer: If you work remotely, you may need to access important files on your company’s network. For security reasons, this kind of information requires a secure connection. To gain access to the network, a VPN connection is often required. VPN services connect to private servers and use encryption methods to reduce the risk of data leakage.
Why should you use a VPN connection?
Your ISP usually sets up your connection when you connect to the internet. It tracks you via an IP address. Your network traffic is routed through your ISP’s servers, which can log and display everything you do online.
Your ISP may seem trustworthy, but it may share your browsing history with advertisers, the police or government, and/or other third parties. ISPs can also fall victim to attacks by cyber criminals: If they are hacked, your personal and private data can be compromised.
This is especially important if you regularly connect to public Wi-Fi networks. You never know who might be monitoring your internet traffic and what they might steal from you, including passwords, personal data, payment information, or even your entire identity.
What should a good VPN do?
You should rely on your VPN to perform one or more tasks. The VPN itself should also be protected against compromise. These are the features you should expect from a comprehensive VPN solution:
- Encryption of your IP address: The primary job of a VPN is to hide your IP address from your ISP and other third parties. This allows you to send and receive information online without the risk of anyone but you and the VPN provider seeing it.
- Encryption of protocols: A VPN should also prevent you from leaving traces, for example, in the form of your internet history, search history, and cookies. The encryption of cookies is especially important because it prevents third parties from gaining access to confidential information such as personal data, financial information, and other content on websites.
- Kill switch: If your VPN connection is suddenly interrupted, your secure connection will also be interrupted. A good VPN can detect this sudden downtime and terminate preselected programs, reducing the likelihood that data is compromised.
- Two-factor authentication: By using a variety of authentication methods, a strong VPN checks everyone who tries to log in. For example, you might be prompted to enter a password, after which a code is sent to your mobile device. This makes it difficult for uninvited third parties to access your secure connection.
The history of VPNs
Since humans have been using the internet, there has been a movement to protect and encrypt internet browser data. The US Department of Defense already got involved in projects working on the encryption of internet communication data back in the 1960s.
The predecessors of the VPN
Their efforts led to the creation of ARPANET (Advanced Research Projects Agency Network), a packet-switching network, which in turn led to the development of the Transfer Control Protocol/Internet Protocol (TCP/IP).
The TCP/IP had four levels: Link, internet, transport, and application. At the internet level, local networks and devices could be connected to the universal network – and this is where the risk of exposure became clear. In 1993, a team from Columbia University and AT&T Bell Labs finally succeeded in creating a kind of the first version of the modern VPN, known as swIPe: Software IP encryption protocol.
In the following year, Wei Xu developed the IPSec network, an internet security protocol that authenticates and encrypts information packets shared online. In 1996, a Microsoft employee named Gurdeep Singh-Pall created a Peer-to-Peer Tunneling Protocol (PPTP).
Contiguous to Singh-Pall developing PPTP, the internet was growing in popularity and the need for consumer-ready, sophisticated security systems emerged. At that time, anti-virus programs were already effective in preventing malware and spyware from infecting a computer system. However, people and companies also started demanding encryption software that could hide their browsing history on the internet.
The first VPNs, therefore, started in the early 2000s but were almost exclusively used by companies. However, after a flood of security breaches, especially in the early 2010s, the consumer market for VPNs started to pick up.
VPNs and their current use
According to GlobalWebIndex, the number of VPN users worldwide increased more than fourfold between 2016 and 2018. In countries such as Thailand, Indonesia, and China, where internet use is restricted and censored, one in five internet users uses a VPN. In the USA, Great Britain, and Germany, the proportion of VPN users is lower around 5% but is growing.
One of the biggest drivers for VPN adoption in recent years has been the increasing demand for content with geographical access restrictions. For example, video streaming services such as Netflix or YouTube make certain videos available only in certain countries. With contemporary VPNs, you can encrypt your IP address so that you appear to be surfing from another country, enabling you to access this content from anywhere.
Here’s how to surf securely with a VPN
A VPN encrypts your surfing behavior, which can only be decoded with the help of a key. Only your computer and the VPN know this key, so your ISP cannot recognize where you are surfing. Different VPNs use different encryption processes, but generally function in three steps:
- Once you are online, start your VPN. The VPN acts as a secure tunnel between you and the internet. Your ISP and other third parties cannot detect this tunnel.
- Your device is now on the local network of the VPN, and your IP address can be changed to an IP address provided by the VPN server.
- You can now surf the internet at will, as the VPN protects all your personal data.
What kind of VPNs are there?
There are many different types of VPNs, but you should definitely be familiar with the three main types:
Often not all employees of a company have access to a company laptop they can use to work from home. During the corona crisis in the Spring of 2020, many companies faced the problem of not having enough equipment for their employees. In such cases, the use of a private device (PC, laptop, tablet, mobile phone) is often resorted to. In this case, companies fall back on an SSL-VPN solution, which is usually implemented via a corresponding hardware box.
The prerequisite is usually an HTML-5-capable browser, which is used to call up the company’s login page. HTML-5-capable browsers are available for virtually any operating system. Access is guarded with a username and password.
A site-to-site VPN is essentially a private network designed to hide private intranets and allow users of these secure networks to access each other’s resources.
A site-to-site VPN is useful if you have multiple locations in your company, each with its own local area network (LAN) connected to the WAN (Wide Area Network). Site-to-site VPNs are also useful if you have two separate intranets between which you want to send files without users from one intranet explicitly accessing the other.
Site-to-site VPNs are mainly used in large companies. They are complex to implement and do not offer the same flexibility as SSL VPNs. However, they are the most effective way to ensure communication within and between large departments.
Connecting via a VPN client can be imagined as if you were connecting your home PC to the company with an extension cable. Employees can dial into the company network from their home office via a secure connection and act as if they were sitting in the office. However, a VPN client must first be installed and configured on the computer.
This involves the user not being connected to the internet via his own ISP but establishing a direct connection through his/her VPN provider. This essentially shortens the tunnel phase of the VPN journey. Instead of using the VPN to create an encryption tunnel to disguise the existing internet connection, the VPN can automatically encrypt the data before it is made available to the user.
This is an increasingly common form of VPN, which is particularly useful for providers of insecure public WLAN. It prevents third parties from accessing and compromising the network connection and encrypts data all the way to the provider. It also prevents ISPs from accessing data that, for whatever reason, remains unencrypted and bypasses any restrictions on the user’s internet access (for instance, if the government of that country restricts internet access).
The advantage of this type of VPN access is greater efficiency and universal access to company resources. Provided an appropriate telephone system is available, the employee can, for example, connect to the system with a headset and act as if he/she were at their company workplace. For example, customers of the company cannot even tell whether the employee is at work in the company or in their home office.
How do I install a VPN on my computer?
Before installing a VPN, it is important to be familiar with the different implementation methods:
Software must be installed for standalone VPN clients. This software is configured to meet the requirements of the endpoint. When setting up the VPN, the endpoint executes the VPN link and connects to the other endpoint, creating the encryption tunnel. In companies, this step usually requires the entry of a password issued by the company or the installation of an appropriate certificate. By using a password or certificate, the firewall can recognize that this is an authorized connection. The employee then identifies him/herself by means of credentials known to him/her.
VPN extensions can be added to most web browsers such as Google Chrome and Firefox. Some browsers, including Opera, even have their own integrated VPN extensions. Extensions make it easier for users to quickly switch and configure their VPN while surfing the internet. However, the VPN connection is only valid for information that is shared in this browser. Using other browsers and other internet uses outside the browser (e.g. online games) cannot be encrypted by the VPN.
While browser extensions are not quite as comprehensive as VPN clients, they may be an appropriate option for occasional internet users who want an extra layer of internet security. However, they have proven to be more susceptible to breaches. Users are also advised to choose a reputable extension, as data harvesters may attempt to use fake VPN extensions. Data harvesting is the collection of personal data, such as what marketing strategists do to create a personal profile of you. Advertising content is then personally tailored to you.
If multiple devices are connected to the same internet connection, it may be easier to implement the VPN directly on the router than to install a separate VPN on each device. A router VPN is especially useful if you want to protect devices with an internet connection that are not easy to configure, such as smart TVs. They can even help you access geographically restricted content through your home entertainment systems.
A router VPN is easy to install, always provides security and privacy, and prevents your network from being compromised when insecure devices log on. However, it may be more difficult to manage if your router does not have its own user interface. This can lead to incoming connections being blocked.
A company VPN is a custom solution that requires personalized setup and technical support. The VPN is usually created for you by the company’s IT team. As a user, you have no administrative influence from the VPN itself, and your activities and data transfers are logged by your company. This allows the company to minimize the potential risk of data leakage. The main advantage of a corporate VPN is a fully secure connection to the company’s intranet and server, even for employees who work outside the company using their own internet connection.
Can I also use a VPN on my smartphone or other devices?
Yes, there are a number of VPN options for smartphones and other internet-connected devices. A VPN can be essential for your mobile device if you use it to store payment information or other personal data or even just to surf the internet. Many VPN providers also offer mobile solutions – many of which can be downloaded directly from Google Play or the Apple App Store, such as Kaspersky VPN Secure Connection.
Is a VPN really so secure?
It is important to note that VPNs do not function like comprehensive anti-virus software. While they protect your IP and encrypt your internet history, a VPN connection does not protect your computer from outside intrusion. To do this, you should definitely use anti-virus software such as Kaspersky Internet Security. Because using a VPN on its own does not protect you from Trojans, viruses, bots, or other malware.
Once the malware has found its way onto your device, it can steal or damage your data, whether you are running a VPN or not. It is therefore important that you use a VPN together with a comprehensive anti-virus program to ensure maximum security.
Selecting a secure VPN provider
It is also important that you choose a VPN provider that you can trust. While your ISP cannot see your internet traffic, your VPN provider can. If your VPN provider is compromised, so are you. For this reason, it is crucial that you choose a trusted VPN provider to ensure both the concealment of your internet activities and ensure the highest level of security.
How to install a VPN connection on your smartphone
As already mentioned, there are also VPN connections for Android smartphones and iPhones. Fortunately, smartphone VPN services are easy to use and generally include the following:
- The installation process usually only downloads one app from the iOS App Store or Google Play Store. Although free VPN providers exist, it’s wise to choose a professional provider when it comes to security.
- The setup is extremely user-friendly, as the default settings are already mostly designed for the average smartphone user. Simply log in with your account. Most apps will then guide you through the key functions of the VPN services.
- Switching on the VPN literally works like a light switch for many VPN apps. You will probably find the option directly on the home screen.
- Server switching is usually done manually if you want to fake your location. Simply select the desired country from the offer.
- Advanced setup is available for users requiring a higher degree of data protection. Depending on your VPN, you can also select other protocols for your encryption method. Diagnostics and other functions may also be available in your app. Before you subscribe, learn about these features to find the right VPN for your needs.
- In order to surf the internet safely from now on, all you have to do is first activate the VPN connection through the app.
But keep the following in mind: A VPN is only as secure as the data usage and storage policies of its provider. Remember that the VPN service transfers your data to their servers and these servers connect over the internet on your behalf. If they store data logs, make sure that it is clear for what purpose these logs are stored. Serious VPN providers usually put your privacy first and foremost. You should therefore choose a trusted provider such as Kaspersky Secure Connection.
Remember that only internet data is encrypted. Anything that does not use a cellular or Wi-Fi connection will not be transmitted over the internet. As a result, your VPN will not encrypt your standard voice calls or texts.
A VPN connection establishes a secure connection between you and the internet. Via the VPN, all your data traffic is routed through an encrypted virtual tunnel. This disguises your IP address when you use the internet, making its location invisible to everyone. A VPN connection is also secure against external attacks. That’s because only you can access the data in the encrypted tunnel – and nobody else can because they don’t have the key. A VPN allows you to access regionally restricted content from anywhere in the world. Many streaming platforms are not available in every country. You can still access them using the VPN. VPN solutions from Kaspersky are available for both Windows PCs and Apple Macs.
There are now also many providers of VPN connections for smartphones which keep mobile data traffic anonymous. You can find certified providers in the Google Play Store or the iOS App Store. However, remember that only your data traffic on the internet is anonymized and protected by using a VPN. The VPN connection does not protect you from hacker attacks, Trojans, viruses, or other malware. You should therefore rely on additional trusted anti-virus software.
Symmetric Key Encryption: Encryption is a process to change the form of any message in order to protect it from reading by anyone. In Symmetric-key encryption the message is encrypted by using a key and the same key is used to decrypt the message which makes it easy to use but less secure. It also requires a safe method to transfer the key from one party to another.
Asymmetric Key Encryption: Asymmetric Key Encryption is based on public and private key encryption techniques. It uses two different keys to encrypt and decrypt the message. It is more secure than the symmetric key encryption technique but is much slower.
|Symmetric Key Encryption||Asymmetric Key Encryption|
|It only requires a single key for both encryption and decryption.||It requires two keys, a public key and a private key, one to encrypt and the other one to decrypt.|
|The size of the cipher text is the same or smaller than the original plain text.||The size of the cipher text is the same or larger than the original plain text.|
|The encryption process is very fast.||The encryption process is slow.|
|It is used when a large amount of data is required to transfer.||It is used to transfer small amounts of data.|
|It only provides confidentiality.||It provides confidentiality, authenticity, and non-repudiation.|
|The length of the key used is 128 or 256 bits||The length of the key used is 2048 or higher|
|In symmetric key encryption, resource utilization is low as compared to asymmetric key encryption.||In asymmetric key encryption, resource utilization is high.|
|It is efficient as it is used for handling a large amount of data.||It is comparatively less efficient as it can handle a small amount of data.|
|Security is less as only one key is used for both encryption and decryption purposes.||It is more secure as two keys are used here- one for encryption and the other for decryption.|
|The Mathematical Representation is as follows-|
P = D (K, E(P))where K –> encryption and decryption key
P –> plain text
D –> Decryption
E(P) –> Encryption of plain text
|The Mathematical Representation is as follows-|
P = D(Kd, E (Ke,P))
where Ke –> encryption keyKd –> decryption key
D –> Decryption
E(Ke, P) –> Encryption of plain text using encryption key Ke . P –> plain text
|Examples: 3DES, AES, DES and RC4||Examples: Diffie-Hellman, ECC, El Gamal, DSA, and RSA|
A client-server network is a medium through which clients access resources and services from a central computer, via either a local area network (LAN) or a wide-area network (WAN), such as the Internet. A unique server called a daemon may be employed for the sole purpose of awaiting client requests, at which point the network connection is initiated until the client request has been fulfilled.
Network traffic is categorized as client-to-server (north-south traffic) or server-to-server (east-west traffic). Popular network services include e-mail, file sharing, printing, and the World Wide Web. A major advantage of the client-server network is the central management of applications and data.
Benefits of Client-Server Computing
There are numerous advantages of the client-server architecture model:
- A single server hosting all the required data in a single place facilitates easy protection of data and management of user authorization and authentication.
- Resources such as network segments, servers, and computers can be added to a client-server network without any significant interruptions.
- Data can be accessed efficiently without requiring clients and the server to be in close proximity.
- All nodes in the client-server system are independent, requesting data only from the server, which facilitates easy upgrades, replacements, and relocation of the nodes.
- Data that is transferred through client-server protocols are platform-agnostic.
Difference Between Client and Server
Clients, also known as service requesters, are pieces of computer hardware or server software that request resources and services made available by a server. Client computing is classified as Thick, Thin, or Hybrid.
- Thick Client: a client that provides rich functionality, performs the majority of the data processing itself, and relies very lightly upon the server.
- Thin Client: a thin-client server is a lightweight computer that relies heavily on the resources of the host computer — an application server performs the majority of any required data processing.
- Hybrid Client: possessing a combination of thin client and thick client characteristics, a hybrid client relies on the server to store persistent data, but is capable of local processing.
A server is a device or computer program that provides functionality for other devices or programs. Any computerized process that can be used or called upon by a client to share resources and distribute work is a server. Some common examples of servers include:
- Application Server: hosts web applications that users in the network can use without needing their own copy.
- Computing Server: shares an enormous amount of computer resources with networked computers that require more CPU power and RAM than is typically available for a personal computer.
- Database Server: maintains and shares databases for any computer program that ingests well-organized data, such as accounting software and spreadsheets.
- Web Server: hosts web pages and facilitates the existence of the World Wide Web.
Difference Between Server-Side Programming and Client-Side Programming
Server-side programming refers to a program that runs on the server and focuses on the generation of dynamic content. Server-side programming is used for querying and interacting with the database, accessing files on a server, interacting with other servers, processing user input, and structuring web applications. Popular programming languages for server-side programming include C++, Java and JSP, PHP, Python, and Ruby on Rails.
Server-Side Rendering vs Client-Side Rendering
Server-side rendering refers to an application’s ability to convert HTML files on the server into a fully rendered page for the client. The web browser makes a request for information from the server, which response, typically in milliseconds, with a fully rendered HTML display. Search engines are able to index and crawl content before it is delivered, making server-side rendering very beneficial for SEO.
Client-Server vs Peer-to-Peer
Peer-to-peer (P2P) is a decentralized communications model in which all nodes in the network have equivalent capabilities and can function as both a client and server. Nodes in peer-to-peer computing collectively use their resources and communicate with each other directly on demand.
An algorithm in the peer-to-peer communications protocol balances the load, making other peers available to compensate for any resource downtime, and rerouting requests as the load capacity and availability of peers changes. A major advantage of peer-to-peer networking is the ability to expand the network to manage a large number of clients.
In client-server computing, a centralized communications model, the server is the central node that communicates with other client nodes. A major advantage that the client-server relationship has over the peer-to-peer relationship is the ability to manage data and applications in one, centralized server.
Traditional commerce is part of a business that has all activities that facilitate exchange. Trade and auxiliaries of trade are kinds of traditional commerce whereas e-commerce refers to the exchange of goods & services, funds/information between customer and business by means of an electronic network
The major differences between Electronic commerce (E-commerce) and traditional commerce are as follows −
|It is cost-effective.||It is less cost-effective than E-commerce.|
|No role for middlemen.||Middlemen have a role to play in traditional commerce.|
|Less overhead cost.||High overhead cost than E-commerce|
|Takes less time.||Takes more time.|
|Better connectivity.||No better connectivity.|
|The size of the business is easily expandable.||The size of the business is not easily expandable.|
|The new product is easily introduced.||The introduction of new products is not easy.|
|Immediate analysis of customer feedback can be done.||Takes more time in analysing customer feedback.|
|Increase profits by cost-cutting and streamlining operating expenses.|
No physical inspection.
|24*7 accessibility.||Limited time of accessibility.|
|Not suitable for perishable and high-value products/items.||Suitable for perishable and high products/items.|
|High-qualified staff is required.||High-qualified staff is not required.|
|Screen-to-face customer interaction.||Face-to-face customer interaction.|
|Automated process of business.||Manual processing of business.|
|End-to-end business relationship.||Vertical/linear business relationship.|
|The chances of fraud are very high.||The chances of fraud are less compared to E-commerce.|
What is an Ecommerce Business Model?
An eCommerce business model refers to how a business operates to sell goods and services online. There are 6 main types of eCommerce business models, namely Business-to-Government (B2G), Business-to-Business (B2B), Business-to-Consumer (B2C), Consumer-to-Consumer (C2C), Consumer-to-Business (C2B), and Business-to-Business-to-Consumer (B2B2C).
In order to find the right eCommerce model for your business, you need to define two things. Firstly, you will have to define who you will sell to, and then define how you will position what you have to sell. Then, figure out your eCommerce business plan. This will define how you will attract customers and how they will engage with your product. Lastly, figure out your delivery framework, by assessing what will work best for your eCommerce business.
What do You Want to Sell?
The beauty of online commerce is that you can sell pretty much anything. However, it is always a good idea to start with a small range of products. Your store can sell physical products (clothing or shoes), digital products (ebooks are a good place to start), or services such as babysitting.
Let’s see what types of products are currently being sold online and how you can tap their market.
This is the most commonly sold commodity in eCommerce stores. Physical products (pretty much anything that requires packing, shipping, and delivery) often achieve the highest sales.
But, how do you decide which products to sell?
Discover what you are passionate about. Do you love cars? How about selling car parts and accessories then? Do you love books? Why not start an online bookstore? Online commerce gives you the perfect opportunity for converting your passion into a viable business.
Analyze your chosen niche and find the opportunity gaps. This covers all the aspects of the industry that are underserved. Similarly, try to analyze the pain points of the target customers.
Next, conduct keyword research on the product you wish to sell. This way, you can pinpoint the demand for your product which will help you plan your inventory and order placements.
There are many products that can be delivered to a customer online. Are you a web designer, content writer, or drawing artist? You can create an eCommerce store around digital products. Piracy and Copyright infringements are a serious challenge for such stores. Another important requirement is the FAQ and Legal sections that cover the mechanism of product delivery and the copyright status of your offerings.
If you have a crew of skilled carpenters or house cleaners, or you are an expert hair stylist who offers to visit the customer’s residence, why not create a website to sell these services online? You can significantly increase the demand for your services by creating a comprehensive FAQ section and a Legal section detailing exactly what you are offering and what the customers can expect.
6 Types of Ecommerce Business Models
Ecommerce is a global phenomenon and as such support several models. The good thing about eCommerce is that you could choose one or more models for your venture.
1. Business-to-Business (B2B)
If the nature of your products or services is geared towards meeting the needs of businesses, setting up a B2B strategy is your best bet. Networking and reaching out is a bigger part of this strategy. A big advertising budget is not of much help. The most important challenge you would face is convincing established businesses that your products/services are a great fit for their processes.
The advantage of this business model is that order sizes are usually large, and repeat orders are very common if you maintain the quality of your products and services. An example of a great B2B model is Media Lounge.
2. Business-to-Consumer (B2C)
This is the model you should adopt if your products/services are targeted primarily toward individuals. The potential customer finds your website and determines whether your product could address their pain points.
After browsing the store, the customer may decide to place an order. An example of a successful B2C business is Portugal Footwear.
3. Consumer-to-Consumer (C2C)
While B2B and B2B business concepts are familiar, Customer-to-Customer (C2C) is a concept unique to eCommerce. This is mainly due to the sheer demand for the platforms such as Craigslist, OLX, and eBay.
These platforms allow their users to trade, buy, sell, and rent products and services. In all transactions, the platforms receive a small commission. This business model is complex and requires careful planning to operate. Many platforms have failed, generally due to legal issues.
4. Consumer-to-Business (C2B)
Customer-to-Business (C2B) business model is another great concept that is popular mainly due to platforms that cater to freelancers. In C2B, freelance workers work on tasks provided by clients. Most of these clients are commercial entities and freelancers are often individuals. In simpler terms, consider C2B is a sole proprietorship serving larger businesses.
Reverse auction websites, freelance marketplaces, and affiliate marketing all form part of this business model. Again, this model requires planning due to the legal complexities involved.
5. Business to Government (B2G)
Business to Government (B2G) is an eCommerce business model where a business markets its products to government agencies. If you want to choose this eCommerce business model, you will have to bid on government contracts. Governments usually put up requests for proposals and eCommerce businesses then have to bid on government projects. In most cases, a government agency would not come to place an order on your eCommerce website. However, some local government agencies are exceptions to the rule, depending on their needs.
6. Business to Business to Consumer (B2B2C)
When a business sells products to another business, and then that business sells to the consumers online, this is what is defined as B2B2C eCommerce.
There are three parties involved in this type of eCommerce business model. For example, if you choose to go with it, you will have to partner with another business, and only then can you sell its products and offer the partner a commission for each sale.
Ecommerce store owners choose this business model mainly for new customer acquisition. This happens because even though customers are already familiar with the partner’s products, they can’t order from them online, due to obstacles such as geographical location, hefty shipping costs, and others.
Hence, this eCommerce business model is most suitable for new eCommerce store owners who want to expand their customer base.
Digital tokens are either intrinsic or created by software and assigned a certain utility. Examples of intrinsic digital tokens are Bitcoin and Ether. The other type of digital token is asset-backed, which is issued to represent a claim on a redeemable asset, such as legal tender or precious metals.
You may have encountered several people or businesses who offer to pay or accept payments in the form of digital tokens. Digital tokens also go by the name “cryptocurrencies” as they are a type of crypto asset. They function as a medium of exchange, albeit on limited platforms, since not all online businesses accept cryptocurrencies.
What Can You Buy Using Digital Tokens?
Although cryptocurrency has become the rage as of late, it still can’t be used to buy everything. So what, exactly, can you buy using a digital token? Here are some examples:
- Domain names: Domain name registrars, such as Namecheap, accept cryptocurrency payments, specifically Bitcoins.
- University tuition: A private school in Cyprus was the first university to accept payments in Bitcoin.
- Hotel accommodation: Expedia, one of the largest travel booking sites, allows its users to pay for their hotel accommodations using digital currency.
- Electronic gadgets: Some e-commerce stores that specialize in selling electronic devices now accept Bitcoin payments. Newegg is an example.
- Jewelry: You may now buy watches, earrings, and jewels using digital tokens. Reeds Jewelers is among the merchants that accept such a payment method.
- Donations: You can also donate to nonprofit organizations, such as Wikimedia, the foundation behind Wikipedia, and Save the Children in the form of cryptocurrency.
These are just some of the items that you can pay for using digital currencies. However, you can buy almost anything using Bitcoins or any cryptocurrency since some retail stores, such as Overstock, accept this method of payment. Shopify has also given its merchants a choice to accept digital currencies.
3 Types of Digital Tokens
Notice that our list above mentions Bitcoins repeatedly. Bitcoin is only one among thousands of cryptocurrencies in the market. This fact could be overwhelming for anyone, even those who are well-versed in the industry. Digital tokens though can be categorized into three major types:
- Currency tokens: Bitcoin is a type of currency token meant to pay for goods and services. Bitcoin was, in fact, created to replace fiat (paper) money.
- Utility tokens: Utility tokens are more than a means of payment. Specifically, they give users the power to trade cryptocurrencies at lower fees since utility tokens provide them access to the developers’ platforms. An example of a utility token is Ethereum, although it can also fall under the currency token category. Ethereum, an example of a utility token, was intended for use on a single platform.
- Asset or investment tokens: By the name itself, these tokens refer to assets that can give investors a positive return on their investment. An example is The DAO, a blockchain company backed by a smart contract.
How Do Digital Tokens Work?
Think of digital tokens as casino chips that you can use as substitutes for cash when playing games. Like casino chips, digital tokens are unregulated but valuable, as they have particular values when converted to paper money.
A digital token facilitates real-world transactions via a decentralized technology—blockchain. Users can make payments and keep money without going through third-party providers, so the deals they enter into are more direct. This transaction method is often preferred because it doesn’t require an intermediary, making it faster and more affordable for both parties.
How Can I Get a Digital Token?
Those interested in getting a digital token can participate in an initial coin offering (ICO). From there, you can buy digital tokens from the organizing company following this process:
- Register for an ICO via the company’s website.
- Choose the digital token of your choice (i.e., Bitcoin or Ether).
- Move the digital tokens you purchased to your wallet.
- Buy ICO tokens by sending your tokens to the company’s wallet address.
- Receive your ICO digital tokens in your wallet.
- Store your ICO digital tokens in your preferred wallet.
If you miss an ICO, you can still buy digital tokens once these are listed on coin exchanges. Often, digital tokens are traded against Ether and Bitcoin, so their price points are higher.
Is Digital Token Use Safe?
Digital tokens are often passed around from one person to another. So the concern about their overall safety and security is understandable. In general, digital token use is safe because each transaction gets recorded on a blockchain, which is tamper-proof. The decentralized ledger gives full transparency of a token’s ownership via the owner’s wallet address.
The digital record also strengthens security because the logs can’t be altered. If there is one thing that you should be wary of, it is the growing number of malicious people scamming others by offering illegitimate ICOs.
What Is a Digital Token Offering?
A digital token offering is a means for people to visit websites and buy digital tokens using paper money (e.g., U.S. or Canadian dollars) or another cryptocurrency like Bitcoin or Ether.
You can liken it to a foreign exchange (forex) platform or a bank that lets people buy foreign currency for their travels, for example. A person from the U.S. who’s going off on a vacation in Greece can go to his bank to buy euros using U.S. dollars.
Digital token offerings, however, exchange the cryptocurrency of your choice for either money or other kinds of coins. They are also known as “initial coin offerings.” Investors typically go to them to “invest” in new cryptocurrencies in hopes that they’ll earn from these in the future.
Example of a Digital Token
Cyber Cosmos is an example of a set of digital tokens in the form of NFT characters created to encourage people, especially women, to join the InfoSec industry. Each token is an investment artwork and represents the author’s ethos of strength, fairness, and equal opportunities for women. In the future, these tokens will also allow users to connect in the Metaverse, the virtual reality intended to supplant the Internet.
Website plays an important role in today’s life. Since everyone wants to show their presence online because of too much competition around. The best website designing company in Lucknow It has been essential for everyone to be a part of technology if not you lack behind. It is obvious you cannot do yourself everything. However, in each field experts shows their presence for that you can take advantage.
Talking about website making we have gathered some important information that will be helpful to you to build your website and help you to grow your business.
Below are the best 5 companies who are providing services in this field for a long with fully satisfactory results.
- SoftMaji InfoTech
SOFTMAJI INFOTECH | WEBSITE FOR EVERYONE is one of the best and trusted website designing company in Lucknow and Lucknow. The company provides satisfactory results to its clients. It has worked for big companies small, and individuals. Professionals handling the project always take care to deliver services on time without delay. They believe making a website for their clients is very important for their business growth.
The company provides various services related to fields such as website designing, web development, CRM development, online marketing, e-commerce designing, logo designing, and many more.Css.founder.com has a mission website for everyone with affordable prices also to boost client’s business with the help of the website.
- Sigma Softwares
Sigma IT software is an IT development company based in Lucknow which works in a Flexible Environment for the best IT Development Services.
We focus on providing IT services to organizations that are looking for new business opportunities.
We here in SIGMA IT believe in “TO GROW AND HELP GROW “. We are an ISO-certified company and are ranked as the top IT Company in Lucknow.
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The company specialized in website development and web design. They make SEO-friendly websites. They believe today 85% of people are active on mobile so they build websites mobile friendly. The company offers the best services using the latest technologies. According to the company, your website must be mobile-friendly.
The company provides services in web designing, mobile-friendly web designing, dynamic/Cms web designing, landing page designing, YouTube promotion, SEO, SMO, and many more. Awadh web solutions Pvt. ltd is the best SEO Company that provides services at affordable prices.
- Zebra Technosys
Zebra Technosys is a top-notch company in Lucknow that provide various services related to the field of website designing, social media marketing, e-commerce, and See the company goal is to provide 100% result to the client.
The best part of the company they first provide complete consultation related to your queries once you are satisfied then they start working on your project and provide you with the best satisfactory result for their clients. it also provides online Salesforce job support that helps collaborate with customers and companies together.
- Web Sofy
Web soft provides services in websites, software, SEO, mobile application, graphic designing, domain hosting, enterprise networking, networking security, audio visual solution, cloud solution, security, Sevillian, etc. Ways they provide services first planning, analyzing, developing, testing, deploying, and lastly most crucial Support.
The company provides services in the government as well as the private sector. They have a wide range of election duty management requirements which help in booth duty, law and order duty, report and printing duty, etc. As per the company with the help of the software you can control all activities easily. Companies always make sure to provide services with the help of the latest technology. Company standard is based on quality products that give complete assurance.
M-commerce (mobile commerce) is the buying and selling of goods and services through wireless handheld devices such as smartphones and tablets. M-commerce is a form of e-commerce that enables users to access online shopping platforms without the use of a desktop computer.
Over time, content delivery through wireless devices has become faster, more secure, and more scalable. As a result, mobile commerce has grown rapidly.
Examples of m-commerce use in specific industries include the following:
- Financial Services. Mobile banking and brokerage transactions are done from mobile devices.
- Telecommunications. Handheld devices are used to make service changes and bill payments and to do account reviews.
- Service and retail. Consumers place and pay for orders on-the-fly through online stores.
- Information services. Financial, sports, traffic, weather, and many other news updates are accessed through mobile devices.
Types of m-commerce
M-commerce is categorized based on the following three basic functions:
- Mobile shopping enables customers to buy a product using a mobile device with an application such as Amazon or a web app. A subcategory of mobile shopping is app commerce, which is a transaction that takes place over a native app.
- Mobile banking is online banking designed for handheld technology. It enables customers to access accounts and brokerage services, conduct financial transactions, pay bills and make stock trades. This is typically done through a secure, dedicated app provided by the banking institution. Mobile banking services may use SMS or chatbots and other conversational app platforms to send out alerts and track account activities. For example, the WhatsApp chatbot lets customers view their account balance, transfer funds, review loans, and conduct other transactions in real-time through WhatsApp.
- Mobile payments are an alternative to traditional payment methods, such as cash, check, credit, and debit cards. They enable users to buy products in person using a mobile device. Digital wallets, such as Apple Pay, let customers buy products without swiping a card or paying with cash. Mobile payment apps, such as PayPal, Venmo, and Xoom serve the same purpose and are popular options. Mobile consumers also use QR codes to pay for things on their mobile phones. With mobile payments, users send money directly to the recipient’s cell phone number or bank account.