Practicing Success

Target Exam

CUET

Subject

Business Studies

Chapter

Emerging Modes of Business

Question:

Which of the following is a transaction risk in e-busines?

Options:

Default on order taking/giving

Default on order payment

Default on order delivery

All of these

Correct Answer:

All of these

Explanation:

The correct answer is option 4- All of these.

E-business risk may arise for the seller or the buyer on account of default on order taking/giving, delivery as well as payment. Such situations can be averted by providing for identity and location/address verification at the time of registration, and obtaining authorisation as to the order confirmation and payment realisation. Online transactions are vulnerable to the following types of transaction risks:

  • Seller denies that the customer ever placed the order or the customer denies that he ever placed the order. This may be referred to as ‘default on order taking/giving.’ 
  • The intended delivery does not take place, goods are delivered at wrong address, or goods other than ordered may be delivered. This may be regarded as ‘default on delivery’. 
  • Seller does not get the payment for the goods supplied whereas the customer claims that the payment was made. This may be referred to as ‘default on payment’.