E-Commerce Concepts Interview Questions & Answers

Question 1. How E-commerce Works?

Answer :

When a consumer wants to buy a certain product, he go to the website and selects the product he wants to buy. Once the product is selected, the consumer transaction is moved to the online transaction server where he places an order.

The information is exchanged over a secure channel through a private gateway to a processing network. The networked banks accept or reject the transaction.

All this happens in just a matter of seconds.

eCommerce is a very secure due to the SSL (Secure Socket Layer) technology.

The basic steps involved in becoming Commerce Enabled are:

• Getting an Internet Merchant Bank Account
• Web Hosting
• Obtaining a Digital Certificate
• Finding a Provider of Online Transactions
• Creating or Purchasing a Shopping Cart Software

Question 2. List The Major Benefits Of E-commerce?

Answer :

The major benefits of Ecommerce are:

• secure - more secure than a cheque.
• fast - the transactions take not more than a few seconds
• always on - the purchases can be made 24/7
• convenient - ease of purchasing
• reduced cost price - Reduction of Marketing and Advertising Costs

Question 3. What Are The Various Applications Of E-commerce?

Answer :

Following are a few products where Ecommerce can be used:

• Computer products (hardware, software, accessories)
• Books
• Music
• Financial Services
• Entertainment
• Home Electronics
• Apparel
• Gifts and flowers
• Travel services
• Toys
• Tickets
• Information

Question 4. Explain The Term "web Hosting"?

Answer :

Web hosting is a way to gain a presence on the internet. The web hosting company should be capable of providing you with the level of service that you need to maintain your Web Store.

Question 5. Explain In Brief B2b, B2c, C2b And C2c?

Answer :

B2B (Business-to-Business)
In B2B, companies transact with each other. This includes the companies selling their product to wholesalers, distributors, etc

B2C (Business-to-Consumer)
This is usually when average businesses transact with the customer. This is done through the shopping cart softwares and the amount involved in the transactions is usually low.

C2B (Consumer-to-Business)
In this, a consumer places the product on the net. The companies willing to buy this product bid for it. The consumer can then decide, depending upon the bid, which company to sell it to.

C2C (Consumer-to-Consumer)
These kind of transactions are usually done at an individual level. Payments can be done with the help of online systems like PayPal.

Question 6. Explain Electronic Payment Procedure?

Answer :

• The merchant submits a credit card transaction to the Payment Gateway on behalf of a customer via secure connection from a Web site, at retail, from a MOTO center or a wireless device.
• Payment Gateway receives the secure transaction information and passes it via a secure connection to the Merchant Bank Processor.
• The Merchant Bank’s Processor submits the transaction to the Credit Card Interchange (a network of financial entities that communicate to manage the processing, clearing, and settlement of credit card transactions).
• The Credit Card Interchange routes the transaction to the customer’s Credit Card Issuer.
• The Credit Card Issuer approves or declines the transaction based on the customer’s available funds and passes the transaction results, and if approved, the appropriate funds, back through the Credit Card Interchange.
• The Credit Card Interchange relays the transaction results to the Merchant Bank’s Processor.
• The Merchant Bank’s Processor relays the transaction results to Payment Gateway.
• Payment Gateway stores the transaction results and sends them to the customer and/or the merchant. This communication process averages three seconds or less.
• The Credit Card Interchange passes the appropriate funds for the transaction to the Merchant’s Bank, which then deposits funds into the merchant’s bank account. The funds are typically deposited into your primary bank account within two to four business days.

Question 7. What Is Web Portal And Give Some Examples?

Answer :

Web portal is a business gateway ex: online shopping portals, http://www.wisdomjobs.com/ like job portals

Question 8. What Are The Types Of Ecommerce Applications Available In The It Industry?

Answer :

Business to Business (B2B)
Business to Customers (B2C)
Customers to Customers (C2C)
Customers to Business (C2B)
Etc...

Question 9. What Are Two Advantages Of Electronic Commerce Over Traditional Commerce?

Answer :

Advantages of electronic commerce over traditional commerce are as follows:

1. Instant worldwide availability. 
2. A streamlined buyer-to-seller relationship.
3. Reduced paperwork.
4. Reduced errors. 
5. Time and overhead costs.
6. Reduced time to complete transactions.
7. Easier entry into new markets.
8. New business opportunities. 
9. Improved market analysis.
10. Wider access to assistance and advice.
11. Improved product analysis.
12. The ability to streamline and automate purchasing.

Question 10. How Testing Is Crucial In Ecommerce?

Answer :

Testing is crucial to e-commerce because e-commerce sites are both business critical and highly visible to their users; any failure can be immediately expensive in terms of lost revenue and even more expensive in the longer term if disaffected users seek alternative sites. Yet the time pressures in the e-commerce world militate against the thorough testing usually associated with business criticality, so a new approach is needed to enable testing to be integrated into the development process and to ensure that testing does not present a significant time burden.

Question 11. How To Test Payment Gateways In Web Portals?

Answer :

Using dummy card ids, we can test Payment Gateways.

Question 12. What Is Online Shopping Application And Give Some Examples?

Answer :

Online Shopping Application provides business gateway between Product vendors and Customers.
Ex: Walmart, amazon etc...

Question 13. What Is The Difference Between Business-to-business And Business-to-consumer Electronic Commerce?

Answer :

Difference between business-to-business and business-to-consumer e-commerce:
Business-to-business electronic commerce is conducted between two separate businesses, such as a large company needing office supplies and an office supply company. Business-to-consumer electronic commerce is between one individual and a company selling goods or services.

Question 14. What Are The Possible Drawbacks Of Electronic Commerce?

Answer :

Increased vulnerability to fraud;
difficulty protecting intellectual property;
risks to confidentiality; problems over taxation;
customs requirements;
regulations; credit card fraud;
security;
trust problems, and constant availability.

Question 15. What Are The Payment Models For Electronic Commerce?

Answer :

The e-cash model, the check model, and the credit model.

Question 16. How Does Web Marketing Create A More Personalized Approach Than Radio Or Television Advertising?

Answer :

By allowing users to select the ads they would like to pursue; in radio and television advertising, the viewer or listener is more of a passive recipient of the information.

Question 17. How To Set Up An Ecommerce System?

Answer :

• E-commerce Web sites are not easy to set up. With a plethora of e-commerce solutions in the market, entrepreneurs have to make a few key decisions:
• The entrepreneur has to decide on the initial amount of investment required for an e-commerce Web site, as well as the volume of business of an e-commerce Web site over the Internet. Investment factors and business objectives dictate the type of software, database, or other applications that are required to set up the e-commerce Web site.
• There are specific elements involved in an e-commerce system. These elements range from domain name for the site to the merchant account for e-commerce transactions. Each of these elements requires a certain amount of scrutiny before setting up an e-commerce Web site.
• Before launching the e-commerce Web site on the Internet, it requires rigorous testing. Some of the important and common types of testing include security testing, software and hardware reliability, and compatibility between all the elements of the system.

Question 18. What Is Software Reliability In Ecommerce?

Answer :

E-commerce requires software that performs critical tasks, such as creating storefront and a shopping cart, collecting customer data, and providing the payment gateway. This software needs to function correctly.
Testing assures the organization of the quality and integrity of the e-commerce solution.

Question 19. What Is System Assurance In Ecommerce?

Answer :

The main purpose of system assurance is to deliver a quality product. Conformance to requirements increases the organization’s confidence in the system.
An e-commerce system deals with three parties: the bank, the transaction clearinghouse, and the customer. The interdependency of these three parties makes the process of buying and selling over the Internet more critical than in real life. If the faith of any of these parties dwindles in the e-commerce site, the entrepreneurs can lose a lot of money, as well as their reputation.
For example, in the case of a faulty e-commerce system, the credit card of the customer may be billed immediately for the complete order, when only a partial order has been filled. Testing must assure that partial order fulfillment and billing are done correctly.

Question 20. The Basic Steps Involved In Becoming Commerce Enabled Are:

Answer :

1. Getting an Internet Merchant Bank Account
2. Web Hosting
3. Obtaining a Digital Certificate
4. Finding a Provider of Online Transactions
5. Creating or Purchasing a Shopping Cart Software