Purchase Consummation

•Buyer contacts vendor to purchase

•Vendor states price

•Buyer and Vendor may or may not engage in negotiation

•If satisfied, buyer ask the payment to the vendor

•Vendor contacts billing service

•Billing service decrypts authorization and check buyers account balance

•Billing service gives to the vendor to deliver product

•Vendor delivers the goods to buyer

•On receiving the goods, the buyer signs and delivers receipt

•At the end of the billing cycle, buyer receives a list of transactions

The figure shows this Mercantile process

Mercantile process using Digital Cash

•Buyer obtains e-cash from issuing bank

•Buyer contacts seller to purchase product

•Seller states price

•Buyer sends e-cash to seller

•Seller contacts his bank or billing service to verify the validity of the cash

•Bank gives okay signal

•Seller delivers the product to buyer

•Seller then tells bank to mark the e-cash as “used” currency

Mercantile Transactions Using Credit Cards

•Two major components compromise credit card transactions in this process: electronic authorization and settlement

•In retail transaction, a third-party processor (TPP) captures information at the point of sale, transmits the information to the credit card issuer for authorization, communicates a response to the merchant and electronically stores the information for settlement and reporting.

•The benefits of electronic processing include the reduction in credit losses, lower merchant transaction costs, & faster consumer checkout & merchant-to-bank settlement

A step-by-step account of retail transaction follows:

•Step1: A customer presents a credit card for payment at a retail location

•Step2: The point-of-sale software directs the transaction information to the local network

•Step3: System verifies the source of the transaction and routes it.

•Step4: In this, transaction count and financial totals are confirmed between the terminal and the network

•Step5: In this, the system gathers all completed batches and processes the data in preparation for settlement

Merchant clients takes one of two forms:

•Merchants are charged a flat fee per transaction for authorization and data capture services

•The other form of billing allows merchants to pay a ”bundled” price for authorization, data capture, & settlement

Cost of Electronic Purchasing:

•Cash seems to be preferable to electronic payments, such as, on-line debit, credit, and electronic check authorization

•Consumers appear to spend more when using cards then when spending cash

Postpurchase Interaction

•Returns and claims are an important part of the purchasing process

•Other complex customer service challenges arise in customized retailing are:

Inventory issues: To serve the customer properly, a company should inform a customer right away and if the item is in stock, a company must able to assign that piece to customer

Database access and compatibility issues: Customers should get kind of services by easy issues like calling an 800 number

Customer service issues: To clear the doubts of customer about product