Online transactions are prone to transaction risks. Discuss the various types of transaction risks. How can they be avoided?
Various types of online transaction risks are:
(a) Transaction risk: It involves the risks like default on order, default on delivery, delivery of inferior goods; on the part of the seller and default on payment by the customer when the customer refuses to pay the claims to the seller.
(b) Risk of impersonation: The possibility is impersonation is very high in the only business transaction as a person/buyer may use stolen credit/ debit card and buy the product. The seller has no means to authenticate the genuineness of such a transaction.
(c) Fraudulent practices by businessmen: There are many fake websites who attracts innocent consumers by offering them lucrative offers. Before customers came to know about the reality of these websites, the website owner might have already defrauded.
(d) Data storage and transmission Risk: Data are stored in an invisible form. Therefore stealing or manipulating data is very easy for some person who may get unauthorised access to it. Further hacking of data during data transmission creates another risk.
These risks can be avoided by ensuring following safety measures while doing online business:
(a) By ensuring non-repudiation by the seller or the buyer when the online business transaction is conducted.
(b) Data encryption should be done as it leads to protection of data even if these are stolen either during storage process or transmission process.
(c) Affirming digital signature in the electronic document will overcome problems of online transaction.