E-Business and E-Commerce: Models, Benefits, Limitations and E-Payment Basics Questions

Question 1

Define e-business.

Accepted Answer

**E-business** means using internet and digital technologies to carry out and manage business processes (marketing, procurement, service, HR, etc.).

Question 2

Define e-commerce.

Accepted Answer

**E-commerce** is the buying and selling of goods and services over electronic networks, mainly the internet.

Question 3

What is B2C?

Accepted Answer

**B2C (Business to Consumer)** is a model where businesses sell directly to final customers online (e.g., online retail).

Question 4

What is a payment gateway?

Accepted Answer

A **payment gateway** is a service that securely processes online payments by connecting the merchant system with banks/card networks/UPI systems.

Question 5

Write one benefit of e-commerce.

Accepted Answer

Benefit: **24×7 convenience**—customers can shop anytime from anywhere.

Question 6

Write one limitation of e-commerce.

Accepted Answer

Limitation: **security and privacy risks** such as fraud, hacking and data leakage.

Question 7

Differentiate between e-business and e-commerce (any three points).

Accepted Answer

Difference between **e-business** and **e-commerce**:
- **Scope**: e-business is broader (all digital business processes); e-commerce is narrower (online buying/selling).
- **Activities**: e-business includes **SCM, CRM, HR, service**; e-commerce focuses on **transactions**, ordering and payment.
- **Objective**: e-business improves overall efficiency and coordination; e-commerce mainly supports online sales and purchases.

Thus, **e-commerce is a part (subset) of e-business**.

Question 8

Explain B2B and B2C models with examples.

Accepted Answer

**B2B (Business to Business)**:
- Transactions between two businesses.
- Example: manufacturer ordering raw material from a supplier through an online portal.

**B2C (Business to Consumer)**:
- Businesses sell directly to final consumers online.
- Example: customers buying clothes/electronics on an online shopping app.

Hence, B2B deals are usually bulk and relationship-based, while B2C focuses on customer experience and marketing.

Question 9

Explain C2C and C2B models with suitable examples.

Accepted Answer

**C2C (Consumer to Consumer)**:
- Consumers sell to other consumers using a platform.
- Example: selling a used phone/furniture through a resale marketplace.

**C2B (Consumer to Business)**:
- Individuals offer value/services to businesses.
- Examples: freelancers providing design/coding services; influencers promoting a brand for payment.

Thus, C2C is peer-to-peer selling, while C2B is individuals providing services/products to companies.

Question 10

Explain benefits of e-commerce (any five).

Accepted Answer

Benefits of e-commerce (any five):
- **24×7 availability** and convenience for customers
- **wider market reach** (national/international customers)
- lower operating costs (less physical store dependency)
- faster ordering and payment process
- easy product **comparison** and better customer information
- data-driven marketing and personalization

Therefore, e-commerce improves convenience and expands business opportunities.

Question 11

Explain limitations/challenges of e-commerce (any five).

Accepted Answer

Limitations/challenges of e-commerce (any five):
- **security** threats (fraud, hacking, phishing)
- **privacy** issues and misuse of customer data
- inability to physically examine goods; trust issues
- delivery delays, return management and logistics costs
- dependence on internet/technology; downtime risk
- legal and regulatory compliance challenges

Hence, security, trust and logistics are major challenges for e-commerce success.

Question 12

Explain e-payment process and the role of payment gateway (basics).

Accepted Answer

**E-payment** is an electronic method of paying for goods/services using cards, UPI, net banking or wallets.

Basic process:
- Customer selects product and chooses payment method.
- Details go to the **payment gateway**.
- Gateway securely sends authorization request to bank/network.
- Bank approves/declines and sends response.
- Confirmation is shown to customer and merchant; order is processed.

Thus, a **payment gateway** acts as a secure bridge between customer, merchant and bank.

Question 13

Differentiate between major e-commerce models (B2B, B2C, C2C, C2B) with a table and examples.

Accepted Answer

### **Major E-Commerce Models (Comparison)**

| Model | Full form | Who sells to whom? | Example |
|---|---|---|---|
| **B2B** | Business to Business | business ↔ business | supplier portal, wholesale ordering |
| **B2C** | Business to Consumer | business → customer | online retail shopping |
| **C2C** | Consumer to Consumer | customer → customer | resale marketplace |
| **C2B** | Consumer to Business | individual → company | freelancing, influencer marketing |

**Conclusion**: Models differ mainly by who participates. Understanding the model helps choose the right platform, pricing and marketing strategy.

Question 14

Explain benefits and limitations of e-commerce in exam-writing style with a table.

Accepted Answer

### **Benefits and Limitations of E-Commerce**

E-commerce offers convenience and wider reach, but it also creates security and operational challenges.

| **Benefits** | **Limitations/Challenges** |
|---|---|
| **24×7 availability** and convenience | **security risks** (fraud, phishing, hacking) |
| wider market reach | privacy and data misuse concerns |
| lower operating costs | delivery/returns and logistics issues |
| faster ordering and payment | tech dependence (internet, downtime) |
| data-driven marketing and personalization | trust issues; no physical inspection |

**Conclusion**: If security controls and logistics management are strong, e-commerce can deliver significant value to both customers and businesses.

Question 15

Explain e-payment methods and security controls with a flowchart (basics).

Accepted Answer

### **E-Payment Methods and Security Controls (Basics)**

**Common e-payment methods**:
- **Card payments** (debit/credit)
- **Net banking**
- **UPI/instant transfer**
- **Mobile wallets**

**Key security controls**:
- **Authentication** (password/biometric)
- **OTP / 2FA** for second-level verification
- **Encryption** and **HTTPS (SSL/TLS)** to protect data in transit
- fraud monitoring, transaction limits, alerts

```text
Customer selects product
   ↓
Choose payment method (Card/UPI/Netbanking/Wallet)
   ↓
Payment Gateway (encrypts + routes request)
   ↓
Bank/Network Authorization
   ↓
OTP/2FA Verification
   ↓
Success/Failure response
   ↓
Confirmation + Order processed
```

Thus, e-payment becomes safe and reliable when strong **authentication** and **encryption** controls are used along with monitoring.

E-Business and E-Commerce: Models, Benefits, Limitations and E-Payment Basics

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