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Write a note on Transaction Risks .

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Transaction risks: Online

transactions are vulnerable to the

following types of transaction risks:

• Seller denies that the customer

ever placed the order or the

customer denies that he ever

placed the order. This may be

referred to as ‘default on order

taking/giving.’

• The intended delivery does not

take place, goods are delivered at

wrong address, or goods other

than ordered may be delivered.

This may be regarded as ‘default

on delivery’.

• Seller does not get the payment for

the goods supplied whereas the

customer claims that the payment

was made. This may be referred

to as ‘default on payment’.

Thus, in e-business risk may arise

for the seller or the buyer on account

of default on order taking/giving,

delivery as well as payment. Such

situations can be averted by providing

for identity and location/address

verification at the time of registration,

and obtaining authorisation as to the

order confirmation and payment

realisation. For example, in order to

confirm that the customer has correctly

entered his details in the registration

form, the seller may verify the same

from the ‘cookies’. Cookies are very

similar to the caller ID in telephones

that provide telemarketers with such

relevant information as: the consumer’s

name, address and previous purchase

payment record. As for customer’s

protection from anonymous sellers, it

is always advisable to shop from well-

established shopping sites. While

allowing advertisers to sell their

products online, these sites assure

customers of the sellers’ identities,

locations and service records. Sites

such as eBay even provide for rating of

the sellers. These sites provide

protection to the customers against

default on delivery and reimburse the

payments made up to some extent.

As for the payments, we have

already seen that in almost 95 per cent

of the cases people use credit cards for

their online purchases. At the time of

confirming the order, the buyer is

required to furnish the details such as

the card number, card issuer and card

validity online. These details may be

processed offline; and only after

satisfying himself or herself about the

availability of the credit limits, etc., the

seller may go ahead with the delivery

of goods. Alternatively, e-commerce

technology today permits even online

processing of the credit card

information. For protecting the credit

card details from being misused,

shopping malls these days use the

encryption technology such as

Netscape’s Secure Sockets Layer (SSL).

You can gain some information about

SSL from box on history of e-commerce.

In the succeeding section, we will

familiarise you with the encryption or

cryptography — an important tool

used for safeguarding against data

transmission risks in online transactions.