Business Studies · Ch 5 — Emerging Modes of Business
Online Transactions
Online Transactions
An online transaction can be visualised in three stages:
- Pre-purchase / sale stage — advertising and information-seeking.
- Purchase / sale stage — price negotiation, closing the deal and payment.
- Delivery stage.
Except for delivery, every stage involves a flow of information. Information is exchanged in traditional business too, but under severe time and cost constraints — face-to-face contact needs travel, effort, time and cost; the telephone needs both parties present at once for a verbal exchange; and post is slow and expensive. The internet is a fourth channel, largely free of these problems, and for information-intensive products and services such as software and music, even delivery can happen online.
Despite limitations, e-commerce is the way forward. Most limitations of e-business are being overcome: websites are becoming more interactive to counter the 'low touch' problem; communication technology keeps improving speed and quality; and efforts to bridge the digital divide include setting up community telecentres in villages and rural areas in India with the involvement of government agencies, NGOs and international institutions — India has undertaken about 150 such projects. e-business is clearly here to stay and is poised to reshape businesses, governance and economies.
The Information Technology Act, 2000 paves the way for a paperless society. Key enabling provisions include:
- Legal recognition of electronic records (Section 4) — where a law requires information to be in writing/printed form, that requirement is met if the information is available in electronic form usable for later reference.
- Legal recognition of digital signatures (Section 5) — where a law requires a signature, that requirement is met by a digital signature affixed as prescribed by the Central Government.
- Use of electronic records and digital signatures by Government and its agencies (Section 6-1) — filing of forms/documents, grant of licences/permits/approvals, and receipt or payment of money may be done in the prescribed electronic form. …