TRANSACTION MODELS

Steps before you develop a transaction model

Evaluate business model > Define e business model > E business entity model > Define transaction
model

Earlier internet businesses were content centric, but later they became based on transactions. Business
models were either based on real world activities being imitated on internet or those which naturally
involve the internet environment.

Different Types of transaction models

There are four types of transaction models:

1. Native, Non-Monetary Model: One example of web-based model is Wikipedia. - Information
exchange and freeware (Redhat), no physical delivery of goods and services, only content)
Example Youtube, Facebook, gaana.com
2. Native, Monetary Model: Web hosting, internet services, digital products merchant, internet
access, Metered service model (pay per use).
3. Transplant (Brick and mortar stores), Non-Monetary- Ex: E-Newspapers, Saregama, Justdial
(Ad model and affiliate products).
4. Transplant (Brick and mortar stores),Monetary- Subscription, advertisement, affiliate
(information content model but there is a transaction through subscription etc.)

Transplanted Content based models

Traditional businesses which generate revenues on the internet landscape. These providers have
moved their content on the internet. Example, Journals, research databases and directories (IRCTC)

 Affiliate – Security software with the laptop, windows with laptops

 Subscription – subscribe and you get updates daily, yearly etc.
 Info-mediary model – These models address the information demand of customer and makes
them take informed decision. Example - Test mart (conducts tests on devices to check
whether they are compliant, used by auto industry, agriculture industry)
 Advertising Model – Generate revenues out of ads. Youtube, Google etc. They set out as
native non-monetary businesses but later they started generating revenues through
advertisements

Transplanted Transaction based models

Storeowners, catalogue-based sellers, manufacturers and brokers of financial services,

insurance agents, travel services agents adapted the traditional business model to increase
their reach and reduce the friction.

 Electronic store – web-based order and delivery and payments. Everything electronically.
 Brokerage model – websites posting simple online classified ads, online stock and real estate
brokers. Examples include
 Manufacturer Model - Model is similar to the electronic store model, except here the seller
happens to be the manufacture himself. Example – Nykaa manufactures its own range of
cosmetics, they generally begin as market places but eventually they start their own home
brands in order to get a larger profit share. Other examples include Amazon Basics,

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 TRANSACTION MODELS

Native Content based models

These were set up due to the efforts of some individuals who wanted to facilitate information search
without any financial returns.

 Information Content model – These are websites displaying research work, scientific
content, tourism information and other scholarly works. They just tend to share information
free in order to facilitate research. The best example is Wikipedia. Many scientific journals
which were initially just content based have changes their models to ones based on
advertisement and subscription
 Freeware model – Free Software available on Linux, Apache and other open source
websites. They have always been in the model of sharing content and do not monetize their
offerings, as they just seek improvement in the current versions. It is an information sharing
model.
 Information Exchange Model – Exchange of information on the internet, like registration
forms on Amazon, Gmail and other. This is just a facilitator to generate insights based on user
data and use that data for actual business transactions.

Native transaction-based models

Emerged due to efforts of amateurs who set up informational websites expecting no financial returns.
This also includes the software which are available for download free of cost. The various models
based on native transactions are -

 Meta-mediary Model (PolicyBazar) – Middlemen which facilitate the online trading

activities. These provide information support as well as transaction support like advice and
financing
 Digital product merchandising – native transaction (Antivirus, Medicare, Legal Profession),
The product information in a digital goods market may include samples, trial versions and
demos, in addition to the usual product attributes and pricing
 Internet access provision – America online, VSNL, MTNL (dial up access to the network
for voice and data communication)
 Providing s/w and services for creating and maintaining websites
 Metered service – Pay per use, any product sold electronically, payment based on rate of
utilization

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