We cannot stick to the conventional means of payments in modern time where we are meeting a new technology advancement every other day in our life. Right from the very beginning of our day we starts confronting the technology based gadgets in our life. The branches of this advancement is penetrating every corner of life. Businesses are not left out in this revolution of technology as well. For example purpose of online business transaction is not hidden from us. It is almost impossible to imagine a business running smoothly without showing advancement in such things. The internet and globalisation have redefined how we purchase and sell goods and services. It has impacted every aspect of our lives, and a lot of the things that require a lengthy list of resources can today be taken care of using just a laptop and internet connection. These include anything from publishing news to selling merchandise and making payments to someone sitting on the other end of the country or world.
Never before in human history have we experienced convenience at such a level. As technology progress, we will only witness more advancements happening all over the world.
One of the spectacles of the 21st century is the ability to send and receive money from anywhere in the world within minutes via online transaction processing, something that was unimaginable just a few centuries ago. If you are not able to send and receive money online in modern time you are going to linger in many places. For instance nowadays educational institutes, health places and even grocery stores are preferring online transactions only. The purpose of online transaction is very clear in the mind of people that it reduce the efforts and resources used to manage cash. That is why they ask their customers to pay in online mode only.
What are Online Transactions and Their Purpose?
The best online payment method allows a person to transfer funds digitally using online transaction processing (OLTP). OLTP is a system that handles transaction-oriented applications for data entry and retrieval transaction processing. Nowadays there are multiple mediums by which we can send and receive money online like UPI platform is blooming rapidly in the market. If we tend to explain the purpose of online transaction they are really getting significant for the society today. People are not frightened about the things like their money is not safe in modern scenario like they used to do earlier. All the share goes to the secure system created for online payments.
The entire process is secure, convenient, and almost instantaneous, where transactions take place at a rapid pace allowing businesses and individuals to make and receive payments without delay.
Different Stages of Online Transaction
It is very important to take into account that online transaction is not just a simple one step process. The reason for transacting online is very clear to us by now but we are going to understand the steps of online transaction also. It is completed mainly in three parts. An online transaction happens over three stages. Let’s have a brief look at them.
- Pre-purchase/Sale: This is the pre-transaction stage where a product or service is advertised with the intent of selling it to a consumer.
- Purchase/Sale: This is when the sale happens, and the customer initiates an online payment to purchase the advertised goods or services.
- Delivery Stage: This is the last stage where the ordered goods or services are delivered to the customer, and the online transaction is deemed as completed.
By these steps you can make an online payment successful easily. Make this very sure that you are careful about every step. A little lack of knowledge about online transactions can also put you in an unwanted situation of losing your money as well. That is why you should be ready to act like a well aware person making an online transaction.
Setting up an Online Payment Processing System
If you aim to set up an online payment gateway for your business, firstly, you will need to set up an account with your bank and get the necessary software to integrate the system with your website. This is the primary step towards initiating online transactions from your account. So if you are well aware of what is the purpose of online transaction then it is the high time to take next step towards doing the same in practicality. There are multiple choices that you will have in order to sift out a medium of online payment and getting the credentials for the same.
You may also choose to partner with a third-party payment gateway provider to help you take care of the online payment process.
No matter which one you go for, it’s crucial to have an online payment option if you are in the business of selling goods or services online.
Now that you are aware of what an online transaction is, the purpose it solves and the various stages within it, let’s have a look at a few of the advantages and disadvantages of an online transaction processing system. It is very important to have a complete information regarding online transactions so that you can sail smoothly while making the one.
Modes of Payments Available to Customers and Businesses
- Net Banking Transfer – This method involves the buyer making a payment using their bank account to transfer funds electronically from his bank account to that of the seller.
- Credit or debit card – The buyer shares their credit or debit card information on the payment processing system to initiate a transaction. The amount is debited once the buyer authenticates his identity through a uniquely generated OTP.
- Digital Wallets – A customer can also use a digital wallet such as Paytm, GPay, or Phonepay to make the payment if they so choose to.
- Prepaid Cards – This is a prevalent option among customers who don’t want to share financial data such as credit or debit card information.
Advantages of an Online transaction Processing System
The purpose transaction is very clear to all of us but now we are going to learn the pros and cons of online transactions as well. Have a gaze at the benefits and drawbacks of making online transactions below so that you can decide whether to sail this path or not.
- It’s the perfect solution for online shopping and day-to-day transactions between businesses and customers. Since we all have a great hand in online shopping it is very important to know how to make online payments for this need. In case you are making payment post-delivery of your order the site will cost you few extra bucks for this and thus by making online transaction you can save few bucks from your wallet easily.
- It’s a robust and efficient system with excellent response.
- Simple to use as the customer only needs to enter the required information, and everything else gets taken care of by the online payment gateways. In a nutshell we can say that these online are very much secure and your money is not ruined to the bad hands like hackers. Make sure that you are well aware about the little things like not sharing your details related to the online account to anyone and what is online transaction class 10.
- Choice of multiple payment modes, including credit, debit, net banking, digital wallets, and even prepaid cards. So you can also get some sort of instant loan with the help of online transactions which is not possible in case of offline mode of payments.
Although it is the most efficient way of making transactions in a global world, everything comes with its set of disadvantages, even something as groundbreaking as online transactions processing.
Disadvantages of an Online Transaction Processing System
Every system have some pros and cons and similar is the case with online transactions also where we can see the positive and negative outputs of the payments. So far we have discussed the pros or the same and here are few drawbacks that you need to take care of in terms of online transactions.
- The risk of financial data getting leaked is of concern. However, partnering with top payment gateway providers like plural payment gateway minimises the risks and instances of fraud. This is something we all are very much concerned as our hard earned money can be taken away in few clicks by the insecure payment gateways.
- A large number of online transactions can get affected even if the server hangs for a few seconds. Top payment gateway providers also offer solutions that direct the customer to the available gateway as per the requirements. This is again a big cause of problem and sometimes our money get stuck for days which cause inconvenience in case we are running out of money. It is the biggest reason why people avoid online payments.
Online transactions are quickly becoming the most preferred mode of payment across goods and services that we buy. We all are dependent on these kinds of payment mode as they are not very hectic and we need not to arrange money by standing in ATM queue. It is a time of technology revolution and we all are touched by it which is a fact that cannot be denied at all. It’s safe, convenient, and allows us to conduct business with customers and vendors on a global scale. Make sure that you are also taking dive in this new revolution to match your step with world.