ACADEMIC YEAR 2023/2024

CAT 1 FOR DIPLOMA IN INFORMATION TECHNOLOGY

DIT 502: E-COMMERCE
FULLTIME
DATE:13TH OCTOBER. 2023 TIME: 1 HOUR

QUESTION ONE
Explain the differences between the following pairs of terms and give case scenarios you would
use them [4 marks]
e-business and e-commerce
 E-business transactions are not limited while e-commerce transactions are limited
 E-business covers internal and external business activities while e-commerce covers
external business activities

needs and wants

 Needs are limited while wants are unlimited
 Needs are necessity while wants are desires

QUESTION TWO
Describe how PayPal transaction happens and mention all the parties involved in the transaction
including their roles
[4 marks]
When a customer initiates a transaction, PayPal sends a request to the issuing bank to verify that
the customer has sufficient funds to complete the transaction. If approved . PayPal then sends
the funds to the acquiring bank, which deposits them into the merchant’s account. The merchant
can then withdraw the funds from their account
Parties involved:
1. The customer – person who initiates the transaction by sending money to another party.
2. The merchant – the business or individual who receives the payment from the customer.
3. PayPal- the payment processor that facilitates the transaction between the customer and
the merchant.
4. The issuing bank – the bank that issued the credit or debit card used by the customer to
make the payment
5. The acquiring bank – the bank that processes the payment on behalf of the merchant.

QUESTION THREE
With the aid of a flowchart outline the FIVE major activities, in the correct order, involved in a
B2C E-Commerce Cycle. [5 marks]

Product research

ordering

Payment

Post-sale support Order fulfilment

QUESTION FOUR
Mention a major security problem facing e-commerce websites and how it can be solved [2
marks]
Phishing – a type of cyber attack where an attacker attempts to lure their target into providing
sensitive information .
To prevent phishing attacks , ecommerce websites can implement HTTPS and SSL certificates.