On-line mercantile models from customer perspective

2. Purchase Consumption:

After identifying the product to be purchased by the buyer and the seller must interact in some way ( e-mail, on-line) to carry out the mercantile transactions. The mercantile transaction is defined as the exchange of information between the buyer and seller followed by necessary payment depending upon the payment model mutually agreed on, they may 5 IIMC interact by exchanging currently i.e. backed by the third party such as the central bank, master card, visa card etc. A single mercantile model will not be sufficient to meet the needs of everyone. In very general terms a simple mercantile protocol would require the following transaction where the basic flow remains the same .

i. Through e-mail, online the buyer contacts the vendors to purchase a product or service. This might be done online through e-mail (or) through e-catalogue etc.

ii. Vendor states the price.

iii. Buyer and vendor may or may not engage in a transaction.

iv. If satisfied buyer authorizes payment to the vendor with an encrypted transaction containing the digital signature.

v. Vendor contacts the billing service of the buyer to verify the encrypted authorization for authentication.

vi. Billing service decrypts the authorization and checks the buyer account balance and puts a hole on the amount transfer.

vii. Billing service give the vendor green signal to deliver the product.

viii. On notification of adequate funds to cover financial transaction, vendor delivers the goods to buyer or in the case of information purchase provides a crypto key to unlock the file.

ix. on receiving the goods the buyer signs and delivers receipt. Vendors then tell billing service to complete the transaction.

x. At the end of the billing cycle buyer receives a list of transactions.

The following are the two types of mercantile protocols where the payment is in the form of electronic cash and credit cards.

i. Mercantile process using digital cash: a bank mints ( prints ) electronic currency or ecash. Such a currency is simply a series of bits that the issuing bank can be verified to be valid. This currency is kept secured by the use of cryptographic techniques. After being issued some e-cash a buyer can transfer to a seller in exchange for goods upon receiving a e-cash the sellers can verify authenticity by sending it to the issuing bank for verification. E-cash issuing banks make money by charging either buyer or seller or both. A transaction fee for the use of their E-cash. E-cash is similar to paper currency and has the benefits of being anonymous ( hidden ) and easily transmitted electronically. It still entails the risk of theft or loss. However, and so requires significant security by the buyer when storing e-cash.

ii. Mercantile Transaction Using Credit Cards: two major components of credit card transaction in the mercantile process are

  • Electronic Authorization
  • Settlement

 In the authorization process in the retail transaction, the 3 rd party processor (tpp) captures the information at the point of sale and transmit the information to the credit card issue for authorization, communicated a response to the merchant and electronically stores the information for the settlement and reporting. Once the information leaves the merchants premises the entire process takes few seconds. The benefits of electronic processing include a reduction of credit card losses, lower merchant transaction costs, faster consumer checkout. Credit card authorization is processed at the point of sale terminal using dial-up phone access into the TPP networks. The credit card no is checked against the database and the transaction is either approved typically in a few seconds. A similar procedure is used for debit cards and check verification once the electronic authorization function is completed. The information is processed within the system for client reporting. The data are then transmitted for settlement to the appropriate institution processor.

 After the transaction is completed a set of activities related to account settlement are initiated. In a credit card or debit card transaction the merchant account number is credited and or either credit card issuer is notified to enter the transaction or the card holders checking account is debited automatically. A settlement institution then enter the transaction data into the settlement process. In addition to the data computer also takes cars of the settlement function through electronic transaction processing. This electronic transaction processing also provides other services such as 24 hr network, helpdesk which response to enquires from merchant location etc.

3. Post Purchase Interaction

 As long as there is payment for services there will be references, disputes, other customer service issues that need to be considered. Returns and claims are an important part of purchasing process that impact the administrative costs, scrap and transportation expenses and customers relations. To overcome these problems many companies design their mercantile process for one way i.e., returns and claims must flow upstream.

 The following are the complex customer service challenges that arise in the customized retaining which have not fully understood or resolved.

i. Inventory Issues: to serve a customer properly a company should inform a customer right from when an item is ordered to it is sold out, otherwise the company will have a disappointed customer.

ii. database Access and Compatibility Issues: unless the customer can instantly access all the computers of all the direct response vendors likely to advertise on the information super highway on a real time basis, with compatible software to have an instant access to the merchants inventory and database.

iii. Customer service issues: Customers often have questions about the product such as colour, size, shipment etc. and other things in mind can resolved only by talking to an order entry operator.



On-line mercantile models from customer perspective

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