Unit – 3

Mechanics of making payment through internet

Index
1. Online Payment Mechanics
2. Electronic payment system
3. Electronic Fund Transfer
4. Payment Gateways
5. Plastic Money
6. Debit Card
7. Credit Card
8. Smart Card
9. E-Cash
10. E-Cheque
11. Electronic Data Interchange (EDI)

Online Payment Mechanism

The process in these payments is the transfer of money from the bank account, debit card, or
credit card of a customer to the bank account of a seller. This online e-payment is handy for
purchasing the merchandise or services of sellers.
The government has implemented several actions to encourage and promote digital payments in
India. Through the “Digital India” initiative, the government seeks to create an empowered
economy that is Cashless, Faceless, and Paperless. Various formats and methods are used for
digital payments.

An online payment mechanism refers to the system and process through which financial
transactions are conducted over the internet. These mechanisms enable individuals and
businesses to make and receive payments electronically, offering convenience, speed,
and security. Here's an explanation of how online payment mechanisms work and their
benefits:

Working of Online Payment Mechanism:

1. Initiation of Payment: The process typically begins when a customer initiates a

purchase on a merchant's website or app. They select the products or services they wish
to buy and proceed to the checkout page.
2. Payment Information Input: At the checkout, the customer provides their payment
details, which may include credit/debit card information, digital wallet credentials, bank
account details, or other relevant information, depending on the chosen payment
method.
3. Encryption and Security: The payment information is encrypted to ensure secure
transmission over the internet. This encryption helps protect sensitive data from being
intercepted or compromised by unauthorized parties.
4. Authorization: The encrypted payment information is transmitted to a payment
gateway or processor, which communicates with the customer's bank or financial
institution to authorize the transaction. The bank verifies the validity of the payment
method and ensures that the customer has sufficient funds or credit available to
complete the purchase.
5. Transaction Processing: Once the payment is authorized, the transaction is processed,
and the funds are transferred from the customer's account to the merchant's account.
This transfer may involve multiple parties, including banks, payment processors, and the
merchant's financial institution.
6. Confirmation: Upon successful completion of the transaction, both the customer and
the merchant receive confirmation of the payment. The customer may receive an email
or notification confirming their purchase, while the merchant updates their records to
reflect the payment received.
7. Settlement: Finally, the funds are settled between the various parties involved in the
transaction. This process may take a few business days, during which the funds are
transferred from the customer's bank to the merchant's bank.

Benefits of Online Payment Mechanisms:

1. Convenience: Online payment mechanisms offer unparalleled convenience, allowing

customers to make purchases from anywhere with an internet connection, at any time of
day or night. This eliminates the need to visit physical stores or handle cash.
2. Speed: Transactions conducted through online payment mechanisms are processed
rapidly, enabling instant authorization and confirmation of payments. This speed is
particularly advantageous for e-commerce businesses, as it reduces checkout times and
enhances the overall shopping experience for customers.
3. Security: Online payment mechanisms employ advanced encryption and security
protocols to safeguard sensitive financial information. This helps protect customers'
personal and payment data from unauthorized access, fraud, and identity theft.
4. Global Reach: Online payment mechanisms enable businesses to reach a global
audience and accept payments from customers around the world. This expands market
opportunities and facilitates international trade and e-commerce.
5. Reduced Costs: Compared to traditional payment methods such as cash or checks,
online payment mechanisms are often more cost-effective for both customers and
merchants. They eliminate the need for manual processing, reduce administrative
overheads, and minimize the risks associated with handling physical currency.
6. Enhanced Tracking and Reporting: Online payment mechanisms provide detailed
transaction records and reporting capabilities, allowing merchants to track sales, analyze
customer behavior, and make informed business decisions. This data-driven approach
enables optimization of marketing strategies, inventory management, and customer
service.

Electronic payment system

An electronic payment system, also known as an e-payment system, is a method of making
transactions or paying for goods and services electronically, without the use of physical cash or
checks. These systems utilize electronic devices, networks, and technologies to facilitate secure
and efficient payment processing.

An electronic payment system, often abbreviated as EPS, is a digital platform that

facilitates the exchange of money between individuals, businesses, and other entities
over electronic networks such as the internet or mobile devices. These systems have
transformed the way transactions are conducted by eliminating the need for physical
cash or checks. Instead, users can make payments or transfer funds conveniently and
securely using various electronic methods such as credit/debit cards, digital wallets,
bank transfers, and cryptocurrencies.

Electronic payment systems offer numerous benefits, including increased speed of

transactions, enhanced convenience, lower transaction costs, global accessibility, and
improved security measures to safeguard sensitive financial information. They have
become integral to modern commerce, enabling online purchases, bill payments, peer-
to-peer transfers, and international transactions.

Overall, electronic payment systems play a vital role in the digital economy, providing
efficient, reliable, and versatile solutions for managing financial transactions in today's
interconnected world.

Electronic Fund Transfer

Electronic Fund Transfer (EFT) refers to the digital exchange of money between bank
accounts or financial institutions. Here's a concise breakdown in points:

1. Digital Transactions: EFT enables the transfer of funds electronically without the need
for physical cash or checks.
2. Bank-to-Bank Transfers: It allows individuals, businesses, and organizations to send
money directly from one bank account to another.
3. Online Banking: EFT is often facilitated through online banking platforms, where users
can initiate transfers, pay bills, and manage their finances electronically.
4. Direct Deposit: Employers use EFT to deposit salaries, wages, or benefits directly into
employees' bank accounts, eliminating the need for paper checks.
5. Automatic Payments: EFT facilitates recurring payments for bills, subscriptions, and
loans by automatically transferring funds from the payer's account to the recipient on
specified dates.
6. Speed and Efficiency: EFT transactions are processed swiftly, usually within hours or
even minutes, compared to traditional methods like mailing checks.
7. Security: EFT systems employ encryption and authentication measures to ensure the
security and confidentiality of transactions, reducing the risk of fraud and unauthorized
access.
8. Cost-Effective: EFT transactions often incur lower fees compared to traditional
methods, such as wire transfers or paper-based transactions, resulting in cost savings for
both senders and recipients.
9. Accessibility: EFT services are widely accessible, allowing users to initiate transfers from
anywhere with internet access, enhancing convenience and flexibility.
10. Regulatory Compliance: EFT transactions are subject to regulatory standards and
oversight to ensure compliance with financial laws and protect consumer rights.

Overall, Electronic Fund Transfer (EFT) systems provide a convenient, efficient, and
secure way to transfer funds electronically, powering modern financial transactions and
contributing to the digitalization of banking and commerce.

Electronic Fund Transfer Process

An EFT transfer is usually very straightforward. There are two parties: the sender of funds and
the receiver of funds. Once the sender initiates the transfer, the request channels through a series
of digital networks from the Internet or a payment terminal to the sender’s bank and then to the
receiver’s bank. Senders can be anyone from an employer to a business to an individual paying a
vendor for a service such as electricity. Likewise, recipients can be entities like employees,
goods suppliers, retailers, and utility companies. Most payments are cleared and completed
within a couple of days.
Payment Gateway
А payment gateway is the technology that captures and transfers payment data from the customer
to the acquirer.
A payment gateway is what keeps the payments ecosystem rolling smoothly, as it enables online
payments for consumers and businesses. If you’re an online merchant, you don’t need to be a
payment gateway expert, but it’s worth understanding the basics of how an online payment flows
from your customer to your bank account.
This article explains what is a payment gateway, how it works, why an online merchant needs
one and how to choose which payment gateway service is right for your business.
The key players in online payments
Before we delve deeper into the definition of a payment gateway, we need to identify the key
players in online payments. When a customer clicks on the “Pay” button on your website, these
are the key players involved in the payment process:
 The merchant: this is you, i.e an online business operating in any vertical (travel, retail,
eCommerce, gaming, Forex, etc), offering a product or service to customers
 The customer: the customer, also called a cardholder, who wants to access the products
or services that the merchant is selling, and initiates the transaction
 The issuing bank: the issuing bank is the customer’s bank that issues the cardholder’s
credit or debit card on behalf of the card schemes (Visa, Mastercard)
 The acquirer: also known as the acquiring bank, the acquirer is the financial institution
that maintains the merchant’s bank account (known as the merchant's account). The
acquiring bank passes the merchant's transactions to the issuing bank to receive payment
Payment gateway/processor
The definition of a payment gateway is the technology that captures and transfers payment data
from the customer to the acquirer and then transfers the payment acceptance or decline back to
the customer. A payment gateway validates the customer’s card details securely, ensures the
funds are available and eventually enables merchants to get paid. It acts as an interface between a
merchant’s website and its acquirer. It encrypts sensitive credit card details, ensuring that
information is passed securely from the customer to the acquiring bank, via the merchant.
In other words, the payment gateway works as the middleman between your customer and the
merchant, ensuring the transaction is carried out securely and promptly. An online payment
gateway can simplify how merchants integrate the necessary software. As the middleman during
the payment processing, the gateway manages the customer’s sensitive card details between the
acquirer and the merchant.
Why do we need a payment gateway?
You may be thinking, why do you need a payment gateway if it’s only a middleman? Before we
answer this question, we'll take a step back and highlight that online payment is processed as a
card-not-present transaction. The customer's card cannot be physically swiped on a POS
terminal, as you would normally do if you processed the payment in a brick-and-mortar shop.
Therefore, you can only rely on the card information that the customer is entering on the
payment page. But, how can you be sure that the card the customer is using is their card? In card-
not-present transactions, the fraud risk is significantly higher, and this is where a payment
gateway does its magic.
What would happen if you take the payment gateway out of the online payment flow? Fraudsters
would have easier access to card data you process, exposing your business to fraud and
chargebacks. On top of that, fraudsters would also find additional ways to initiate illegitimate
transactions, leaving you even more exposed to fraud and damaging your brand reputation.
A payment gateway is the gatekeeper of your customer’s payment data. For online merchants, a
payment gateway relays the information from you, the merchant, to the acquirer and the issuing
bank using data encryption to keep unwanted threats away from the sensitive card data. Aside
from fraud management, a payment gateway also protects merchants from expired cards,
insufficient funds, closed accounts or exceeding credit limits.
How does a payment gateway work
Now that you’ve understood why merchants need a payment gateway, let’s take a step further
and analyse how a payment gateway works throughout the payment journey.
1. The customer chooses the product or service they want to purchase and proceeds to the
payment page. Most payment gateways offer you different options for your payment
page. emerchantpay’s payment gateway offers you the below options for your payment page
tailor-made for your business needs:

 Hosted payment page: A hosted payment page is an out-of-the-box payment page where
customers are redirected when they are ready to checkout. The payment gateway securely
receives the transaction data before it passes it to the acquirer. A hosted payment page
reduces the PCI burden for online merchants if you don’t collect and/ or store the
cardholder data on your server.
 Server-to-server integration: A server to server integration is also known as a direct
integration as it enables communication between two servers; the merchant’s server with
the payment gateway’s server. By requesting the card details on the payment page, a
direct transaction can be initiated. Customers can finalise a card payment without being
redirected to the payment page of the payment gateway, resulting in faster checkout,
more consistent user experience and more control over the look and feel of the payment
page from the merchant’s perspective. A server-to-server integration is suitable if you
collect and/ or store the payment data before sending them to the payment gateway for
processing.
 Client-side encryption: Client-side encryption, also known as encryption-at-source refers
to encrypting sensitive on the client-side device before sending it to the merchant’s
server. This enables the merchant to simplify your PCI compliance requirements. In a
 nutshell, it enables you to accept payments on your website while encrypting card data in
your browser, using the payment gateway’s encryption library.
2. The customer enters their credit or debit card details on the payment page. These details
include the cardholder’s name, card expiration date and CVV number (Card Verification
Value). This information is securely passed onto your payment gateway, based on your
integration (hosted payment page, server-to-server integration or client-side encryption).
3. The payment gateway tokenises or encrypts the card details and performs fraud checks
before they send the card data to the acquiring bank.
4. The acquiring bank sends securely the information to the card schemes (Visa,
Mastercard).
5. The card schemes perform another layer of fraud check and then send the payment data
to the issuing bank.
6. The issuing bank, after performing fraud screening, authorises the transaction. The
approved or declined payment message is transferred back from the card schemes, then to
the acquirer.
7. The acquiring bank sends the approval or decline message back to the payment gateway
who then transmits the message to the merchant. If the payment is approved, the acquirer
collects the payment amount from the issuing bank and holds the fund into your merchant
account (more on that later on).
8. deposits the funds into the merchant's account, a process which is known as
the settlement; when the actual settlement will occur, depends on the agreement the
merchant has with their payment gateway.
9. Based on the message, the merchant may either display a payment confirmation page or
ask the customer to provide another payment method.
10. Both merchants and customers benefit from a payment gateway, although most of its
activity happens in the background of the transaction. All the steps mentioned above can
happen in near real time, or take approximately three seconds!
Plastic Money
In general, debit cards & credit cards are called as plastic money. Plastic money has provided us
with the ease of conducting transactions in our day-to-day life. It has definitely replaced cash
transactions to a great extent all over the world and has emerged as an essential form of ready
money. It has made it too easy for us to buy things we normally could not afford and in such a
scenario it is important to understand the merits and demerits of plastic money.
Merits :-
  Reduces the need to carry cash: Plastic money has not only provided us with
convenience, but it has also eliminated the inconvenience that is caused in carry cash. For
instance, when the job of a working executive involves a lot of inter-state travel he/she
has to entail numerous expenses like travel, stay, food etc. In such a case it is not only
troublesome to carry money but also there is a risk of theft.
 Reduction in crime: With credit or debit cards’ being used, one benefit is the reduction
in thefts and crimes. It is very difficult to hack the PIN of a card, for which a person
needs to know specific techniques. Thus the credit card holder can be sure about the
safety of his/her money to some extent. Also in the event the card is stolen, the credit or
debit card holder can ask the bank to block the card as soon as possible.
 Credit cards provide a credit facility: With the advent of credit cards an individual can
avail the benefits of credit facility and pay at a later date. This kind of benefit is not
available when cash is being used for making a purchase. Also credit cards dismiss the
need for go behind people to borrow money in case of emergencies and financial needs.
 International acceptability: Owning an international debit or credit card provides the
ease to make purchases with that card itself rather than worrying about running out of
cash. Also it eliminates the inconvenience caused in conversion of currency.
 Ease in making payments from home: Credit cards and debit cards can be used easily
for making online payments, transfer of funds and various other transactions. It is very
easy to make payments on online shops through plastic money. Further some online
retailers also provide discounts on making payments through credit and debit cards.
Demerits :-
 Plastic money cannot be used everywhere: There are several places where there is a
need for cash only. For instance purchasing utilities from a small retailer or for payments
to milkman, newspaper boy, etc. Further religious places like temple generally accept
cash as offerings. Thus plastic money cannot completely replace cash and thus cannot be
used everywhere.
 Plastic money is also not completely safe: When we are making an online purchase
through a form of plastic money there a certain degree of risk involved as we share our
bank details and other financial information on the internet which is not always a safe
place. There are certain malicious websites on the internet with the intention of looting
people, thus it is very important to be careful while sharing an important detail online.
 Interest liability: While it is true that credit cards give us ample time to pay for
purchases made through it, it can also not be ignored that on the lapse of that period the
card holder has to pay interest amount. This is not the case when making payment
through cash.
  Impulsive purchases: Having the ease to make payments makes a person unable to keep
a control on his/her purchases and enable the person to oversee if the purchase is cost
worthy or not.
 Damaged card: Sometimes the magnetic chip of the cards gets damaged due to wear and
tear or mishandling by the holder. In such an event it the person feels the need to carry
cash to avoid embarrassment. Although this is a rare case but it cannot be avoided.

Debit Cards
Banks will issue debit cards to their account holders as part of their online payment services.
They allow them to use their cards to make purchases online. The banks will deduct the amount
automatically from the cardholders' bank accounts. Similar to a credit card payment system, the
debit card online payment system is one of the most preferred online payment options among
people. The major ones are Visa, RuPay, and MasterCard. Visa cards are the most acceptable
cards by worldwide merchants for all online and digital transactions. Debit cards provide an easy
way for people who are seeking to make online payments.
They offer the best online payment solutions, which makes them the most sought-after payment
tool amongst global buyers. They provide immediate money access to users to perform many
online transactions comfortably. Similar to credit cards, debit cards are extensively accepted
online.

A debit card is a payment card that allows users to access funds directly from their
checking or savings account to make purchases or withdraw cash. Here's a concise
overview:

1. Linked to Bank Account: A debit card is typically linked to the holder's bank account,
enabling direct access to available funds.
2. Payment Method: It functions as a convenient payment method for in-store and online
purchases, similar to a credit card, but funds are deducted directly from the cardholder's
account.
3. PIN or Signature: Debit cards may require a Personal Identification Number (PIN) for
transactions, or in some cases, a signature may be needed for verification.
4. ATM Access: Cardholders can use debit cards to withdraw cash from Automated Teller
Machines (ATMs), making it easy to access funds 24/7.
5. No Interest Charges: Unlike credit cards, debit cards do not incur interest charges
because transactions are funded by available account balances.
6. Budgeting Tool: Debit cards help users manage their finances by providing real-time
updates on account balances, making it easier to track spending.
7. Security: Debit cards offer security features such as PIN protection, EMV chip
technology, and fraud monitoring to safeguard against unauthorized use.
8. Direct Deposits: Employers often use debit cards for direct deposit of salaries or wages,
enabling employees to access funds immediately.
9. International Use: Debit cards can be used internationally for purchases and ATM
withdrawals, usually with associated fees for currency conversion or foreign transactions.
10. Limits and Overdraft Protection: Banks may impose daily spending limits on debit
card transactions, and some offer overdraft protection to prevent declined transactions
when funds are insufficient.
Credit Cards
Credit cards are one of the payment sources in the list of payment methods online. These online
payment modes allow cardholders to buy their preferred merchandise and services. Credit cards
are one of the alternative online payment methods, offering a higher rate of cash back. They
allow users to have little to no liability for fraudulent fees. They help users get reward points that
they can redeem for several purposes.
Paying with a credit card makes it easier to avoid losses from fraud. When a thief uses your debit
card, the money is missing from your account instantly. Legitimate expenses for which you've
scheduled online payments or mailed checks may bounce, triggering insufficient funds fees and
affecting your credit.
Credit cards come in different types, such as Mastercard, Visa, Discover, and American Express.
All the handiest online payment methods in India. However, Mastercard and Visa credit cards
have global recognition, but Discover and American Express cards also have extensive coverage.
Similarly, each of these credit cards provides users with unique benefits. They will provide users
with a bounty of benefits, including travel insurance, rental car insurance, and purchase
protection. However, the benefits may count on the discretion of credit unions and banks offering
these credit cards.
E-CASH

E-cash, or electronic cash, stands as a digital incarnation of traditional currency, entirely existing
in the digital realm. Unlike physical money, e-cash resides in electronic form, typically backed by
a central authority or financial institution. Its utility spans various electronic transactions,
encompassing online purchases, payments, and remittances. Security measures such as
encryption and authentication safeguard e-cash transactions against fraud and unauthorized
access, while some systems offer anonymity to users, enhancing privacy. E-cash can take diverse
forms, including prepaid cards, digital wallets, and cryptocurrencies like Bitcoin. Its decentralized
or centralized nature varies, with some systems relying on decentralized networks of users for
verification, while others are managed by a central authority. Although e-cash facilitates cross-
border transactions and offers speed and convenience, regulatory oversight ensures compliance
with financial regulations, particularly regarding anti-money laundering and know-your-
customer requirements. Overall, e-cash represents a digital evolution of traditional currency,
providing a secure, efficient, and flexible medium for electronic transactions in the modern era.

Electronic Cheques
Electronic cheques are one of the most popular online payment processing systems. They will
deduct money from a checking account. This online payment mechanism eradicates the need for
users to prepare their cheques in written form, helping sellers deposit them into their bank
accounts. Electronic cheques have many security features compared to traditional paper checks,
including verification, digital signatures, public key cryptography, and encryption.
Owners of these checks can perform a function similar to what they can carry out through a
traditional paper check. The benefit of using these e-checks is that they need fewer steps to
process them. The processing costs of e-cheques are comparatively lower than the standard paper
checks. The direct deposit system offered by several employers is one of the more regularly used
versions of the e-cheques.
Unified Payments Interface (UPI)
A payment system called UPI combines many bank accounts into a single application to make it
simple to transfer money between any two parties. UPI is significantly more defined and
standardized across banks than NEFT, RTGS, and IMPS. You may start a bank transfer via UPI
from any location with only a few clicks.
The advantage of using UPI is that you can make payments directly from your bank account
without entering your card or bank information. In 2020, this method became one of the most
widely used digital payment methods, with more than 2 billion transactions recorded in October.
Mobile wallets
Mobile wallets are a type of wallet where you can carry cash in a digital format, as the name
implies. Customers frequently connect their bank accounts or credit cards to the wallet to enable
safe online transactions. Adding funds to a mobile wallet and then transferring funds using that
amount is another way to use wallets.
These days, numerous banks have introduced their wallets. Famous private companies have also
made their presence known in the mobile wallet market.
Online banking
Customers of a specific bank are given the option to perform transactions and engage in other
financial activities online through internet banking, sometimes referred to as e-banking or online
banking, on the bank’s website. To make or receive payments online and to access a bank’s
website, which is known as Internet Banking, you need a reliable internet connection.
The majority of Indian banks have now made their internet banking services available. In India, a
virtual banking option is available on every payment gateway. It has grown to be one of the most
widely used methods for making purchases online. Some of the most popular methods for doing
transactions via internet banking are NEFT, RTGS, or IMPS.
Bank Transfers
Transactions involved in a bank transfer are the same as debit card transactions. This transfer
method transfers money from one bank account to another, so a debit card is not required
physically. Bank transfers provide a faster and safer form of payment than other modes of
transactions, such as paying or withdrawing money from a bank account.
People can also set up online payment system on their telephones. If you are wondering how to
online payment, you need to access your online account and choose the option for making your
payments. Some banks also provide their account holders with online payment apps, allowing
them to transfer funds.
Electronic Data Interchange (EDI)
EDI, or Electronic Data Interchange, is a technology that helps trading partners and organizations
get more done, speed up logistics timelines and eliminate manual errors by automating business-
to-business (B2B) communications. EDI helps many organizations that produce, ship, purchase
and sell goods or provide care, from retailers and manufacturers to logistics firms, airlines,
healthcare providers, insurers and more.
Though it's been in use since the 1960s, EDI is finding new use today, enabling supply chain
automation, digital transformation and even as a key part of workflow and business process
automation.
“Electronic Data Interchange (EDI) is the automated, computer-to-computer exchange of
standard electronic business documents between business partners over a secure, standardized
connection.”
Let's break down this EDI definition, piece by piece, to give you a full sense of what EDI is and
means.
Computer-to-Computer
 EDI replaces manual B2B communications, such as postal mail, fax and email.
 Documents flow directly from the sender's computer application (e.g. a logistics system)
to the receiver's computer application (e.g., an order management system).
Traditional Manual Process
Business Documents
 1000s of standard business transaction documents can be sent automatically using EDI.
 Some common examples include: purchase orders, invoices, shipping statuses, customs
information, inventory documents and payment confirmations.

Standard EDI Format

 EDI documents are processed by computers and use standard, computer-friendly formats.
 Standards describe each piece of data and its format (e.g., type of document, parties
involved, actions to take, mmddyy).
 Standards eliminate company-to-company variations, allowing each business partner's
computer system to speak a common language.
  There are a variety of EDI standards for various industries, regions and use cases - each
with different versions, so EDI partners must use the same standard and version
 Popular standards include: ANSI X12 in the U.S., UN/EDIFACT globally and industry-
specific standards, such as HIPAA
Business Partners
 The exchange of EDI documents is typically between two different organizations,
referred to as business partners or trading partners.
 Example: Company A may buy goods from Company B. Company A sends Purchase
Orders to Company B, which sends Invoices and Shipment Notices to Company A.
EDI vs. Traditional Paper or Email Communications
To illustrate the meaning of EDI, or electronic data interchange, let's compare how a typical
purchasing transaction would go between two trading partners using traditional paper or email
communications vs. using EDI.
Traditional methods:
 The buyer either receives a notification in his system to place an order, or, after querying
the inventory, determines he needs to place an order.
 The buyer enters data onto the screen of a purchasing system to create the PO, prints and
mails it or emails it to the vendor.
 The vendor receives the PO, either days later or via email (along with a long list of other
communications) and manually enters it into the sales order system.
 The vendor prints an invoice and encloses it with the shipment and/or sends it separately
by mail or email.
 The buyer manually enters the invoice into the accounts payable system.
In this example, a paper system can add a week of back-and-forth shipping time to the process.
Both email and paper are susceptible to manual data entry errors, lengthening order time.
EDI process:
 The buyer's procurement system, which uses EDI, auto-generates and sends an EDI-
formatted PO when inventory reaches a pre-specified level.
 In minutes the vendor's sales order system, using EDI software, receives the EDI PO.
 The supplier's system automatically notifies their shipping department to send goods.
  Once the goods are packed and ready to ship, the shipping system generates an Advanced
Ship Notices (ASN) to send to the buyer's receiving department
 The vendor's ERP system then generates an EDI invoice to transmit to the buyer's
accounts payable system
The entire EDI process can be completed in an hour.