Models of e-commerce (B2B, B2C, C2C), online transactions and payment systems

Hello students, welcome to Kwickprep. When you sell your old cycle on a website, and when a factory buys steel online, are both the same kind of e-commerce? No, they are different models. Today we will learn the models of e-commerce, how an online transaction works, and the ways to pay online.

First, a new term. An e-commerce model tells us who sells to whom. The letter B stands for business, like a company or a shop. The letter C stands for consumer, which means the person who finally uses the product. The number two is read as the word to, so B2C means business to consumer.

The first model is B2B, which means business to business. Here one business sells to another business, not to an ordinary person. The orders are usually large and repeated, like hundreds of cartons every month. For example, a textile mill in Surat sells cloth online to a shirt making company. Another example is a kirana shop ordering its stock from a wholesaler through an app.

The second model is B2C, business to consumer. Here a business sells directly to you, the final user. Each order is small, but there are lakhs of customers. Buying a phone on an online shopping site is B2C. Booking a movie ticket on an app is also B2C.

The third model is C2C, consumer to consumer. Here one ordinary person sells to another ordinary person. The website does not own the goods, and it only brings the seller and buyer together. For example, you post a photo of your old cycle on a classifieds site, and a buyer contacts you. The website may earn a small fee, or it may earn from advertisements.

Here are the models side by side, which exams love to ask. In B2B, a company sells to a company, like a mill to a tailoring unit. In B2C, a company sells to a person, like buying a phone from a website. In C2C, a person sells to a person, like an old cycle sale. Some textbooks also add C2B, where a person sells to a company, like a photographer selling photos to a news site.

Pause and try this one. A school orders two hundred desks from a furniture company through its website. Which model is this? It is B2B, because the school is buying as an organisation, not as one consumer.

Now let us move to transactions. A transaction is one complete deal, where goods or services are exchanged for money. An online transaction is a deal where every step happens over the Internet. It needs a buyer, a seller, a bank and a payment gateway working together. It ends when the buyer gets a receipt and an order number.

Let us follow the money in an online payment. First, the buyer clicks the Pay button and enters the card or UPI details. Next, the payment gateway sends these details safely to the buyer's bank. The bank checks the balance and the OTP, and asks, should this be approved? If yes, the money moves to the seller's account and the order is confirmed. If no, the site shows payment failed, and no money is taken.

There are several ways to pay online. A debit card takes money straight from your bank account. You confirm it with an OTP, a one time password sent to your phone. A credit card lets you buy now and pay the bank later. Net banking means logging in to your bank's website with a user ID and a password. UPI, the Unified Payments Interface, sends money using a UPI ID, and you confirm with a secret UPI PIN. An e-wallet holds money you load in advance, like a prepaid purse on your phone.

A few more options also appear in your textbook. Cash on delivery, or COD, means you pay only when the parcel reaches you. A smart card has a small chip that stores data, and it is safer than a magnetic strip card. EFT means Electronic Funds Transfer, and in India it includes NEFT, RTGS and IMPS bank transfers. A payment gateway is the secure link that connects the shopping site to the banks.

Let us revise what we learned today. B2B is business to business, with big repeated orders. B2C is business to consumer, with small orders from many people. C2C is consumer to consumer, with a website in the middle. An online transaction moves from order to gateway to bank to confirmation. And you can pay by card, net banking, UPI, e-wallet or cash on delivery. Now make one real example of your own for each model.