E-commerce
What is e-commerce?
E-commerce, short for electronic commerce, is the buying and selling of goods and services over the internet instead of in a physical store. It covers online retail, digital subscriptions, marketplaces, and in-app purchases, together with the payment infrastructure that moves money from the buyer's bank to the seller's account.
Every e-commerce sale is a : the seller never handles the card or meets the person using it. That shapes the entire stack around it. An online business needs a storefront or checkout page, a to transmit card data securely, and a or to route the transaction to the card networks for .
Key facts
- Also known as: electronic commerce, online commerce, e-tail (retail only)
- Transaction type: card-not-present transaction, since the card is never physically read
- Core components: an online storefront, a or hosted checkout page, a , and a or PSP behind it
- Common payment methods: cards, , bank transfers, and
- Sales channels: web checkout, , marketplaces, and social commerce; an connects these to offline sales under one reporting layer
Types of e-commerce
E-commerce models are usually grouped by who sells to whom:
- B2C (business to consumer): a company sells directly to individual shoppers, such as an online clothing store or a streaming subscription. This is the highest-volume model and the one most card-scheme rules are written around.
- B2B (business to business): a company sells to other companies, typically at higher ticket sizes with invoicing, purchase orders, or bank transfers alongside cards.
- C2C (consumer to consumer): individuals sell to each other through a platform that handles listings and payments, as on classifieds and resale marketplaces.
- D2C (direct to consumer): a manufacturer or brand sells through its own site rather than through retailers, keeping the customer relationship and the payment data.
Billing model is a separate axis that overlays all four: any of these can charge one-off or through , and a single business often runs several models at once.
Why it matters
The card-not-present nature of e-commerce changes the economics and the risk profile of every sale:
- Fraud liability sits with the by default on card-not-present sales. Authenticating the through triggers a , moving responsibility for fraud-related disputes to the .
- Issuers assess card-not-present transactions with less information than a chip-and-PIN sale, so approval rates depend on the quality of the data sent with the authorization request, including , device signals, and authentication results.
- Cards can't be stored in raw form, so repeat purchases run on , which is what makes and subscription renewals possible without holding the card number.
- Every accepted sale carries exposure for months after , which is why e-commerce merchants track dispute rates as an operating metric rather than a support issue.
