E-commerce

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the

transmitting of funds or data, over an electronic network, primarily the Internet. These business

transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or

consumer-to-business. The terms e-commerce and e-business are often used interchangeably.

The term e-tail is also sometimes used in reference to transactional processes around online

retail.

History of ecommerce

One of the most popular activities on the Web is shopping. It has much allure in it — you can

shop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built to

display their specific goods and services.

History of ecommerce dates back to the invention of the very old notion of "sell and buy",

electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991

when the Internet was opened to commercial use. Since that date thousands of businesses have

taken up residence at web sites.

At first, the term ecommerce meant the process of execution of commercial transactions

electronically with the help of the leading technologies such as Electronic Data Interchange

(EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange

business information and do electronic transactions. The ability to use these technologies

appeared in the late 1970s and allowed business companies and organizations to send

commercial documentation electronically.

Although the Internet began to advance in popularity among the general public in 1994, it took

approximately four years to develop the security protocols (for example, HTTP) and DSL which

allowed rapid access and a persistent connection to the Internet. In 2000 a great number of

business companies in the United States and Western Europe represented their services in the

World Wide Web. At this time the meaning of the word ecommerce was changed. People began

to define the term ecommerce as the process of purchasing of available goods and services over

the Internet using secure connections and electronic payment services. Although the dot-com

collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the

"brick and mortar" retailers recognized the advantages of electronic commerce and began to add

such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two

supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers

to buy groceries online). By the end of 2001, the largest form of ecommerce, Business-to-

Business (B2B) model, had around $700 billion in transactions.

According to all available data, ecommerce sales continued to grow in the next few years and, by

the end of 2007, ecommerce sales accounted for 3.4 percent of total sales.

Ecommerce has a great deal of advantages over "brick and mortar" stores and mail order

catalogs. Consumers can easily search through a large database of products and services. They

can see actual prices, build an order over several days and email it as a "wish list" hoping that

someone will pay for their selected goods. Customers can compare prices with a click of the

mouse and buy the selected product at best prices.

Online vendors, in their turn, also get distinct advantages. The web and its search engines

provide a way to be found by customers without expensive advertising campaign. Even small

online shops can reach global markets. Web technology also allows to track customer

preferences and to deliver individually-tailored marketing.

History of ecommerce is unthinkable without Amazon and Ebay which were among the first

Internet companies to allow electronic transactions. Thanks to their founders we now have a

handsome ecommerce sector and enjoy the buying and selling advantages of the Internet.

Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell,

Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories

of products sold in the World Wide Web are music, books, computers, office supplies and other

consumer electronics.

Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle,

Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American

ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost

its position as a successful business model, however, in 2003 the company made its first annual

profit which was the first step to the further development.

At the outset Amazon.com was considered as an online bookstore, but in time it extended a

variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s,

apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but

shortly after it become popular in the Internet Bezos decided to rename his business "Amazon"

after the world's most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the

Year by Time Magazine in recognition of the company's success. Although the company's main

headquarters is located in the USA, WA, Amazon has set up separate websites in other

economically developed countries such as the United Kingdom, Canada, France, Germany,

Japan, and China. The company supports and operates retail web sites for many famous

businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.

Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and

nowadays the company gets about 40% of its sales from affiliates and third party sellers who list

and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently

sponsoring the film "The Stolen Child" with 20th Century Fox.

According to the research conducted in 2008, the domain Amazon.com attracted about 615

million customers every year. The most popular feature of the web site is the review system, i.e.

the ability for visitors to submit their reviews and rate any product on a rating scale from one to

five stars. Amazon.com is also well-known for its clear and user-friendly advanced search

facility which enables visitors to search for keywords in the full text of many books in the

database.

One more company which has contributed much to the process of ecommerce development is

Dell Inc., an American company located in Texas, which stands third in computer sales within

the industry behind Hewlett-Packard and Acer.

Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was

the first company to record a million dollars in online sales. The company's unique strategy of

selling goods over the World Wide Web with no retail outlets and no middlemen has been

admired by a lot of customers and imitated by a great number of ecommerce businesses. The key

factor of Dell's success is that Dell.com enables customers to choose and to control, i.e. visitors

can browse the site and assemble PCs piece by piece choosing each single component based on

their budget and requirements. According to statistics, approximately half of the company's

profit comes from the web site.

In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and

8th on its annual Top 20 list of the most successful and admired companies in the USA in

recognition of the company's business model.

History of ecommerce is a history of a new, virtual world which is evolving according to the

customer advantage. It is a world which we are all building together brick by brick, laying a

secure foundation for the future generations.

APPLICATIONS OF E-COMMERCE:

The applications of E-commerce are used in various business areas such as retail and wholesale

and manufacturing. The most common E-commerce applications are as follows:

Retail and wholesale:

E-commerce has a number of applications in retail and wholesale. E-retailing or on-line retailing

is the selling of goods from Business-to-Consumer through electronic stores that are designed

using the electronic catalog and shopping cart model. Cybermall is a single Website that offers

different products and services at one Internet location. It attracts the customer and the seller into

one virtual space through a Web browser.

Marketing:

Data collection about customer behavior, preferences, needs and buying patterns is possible

through Web and E-commerce. This helps marketing activities such as price fixation,

negotiation, product feature enhancement and relationship with the customer.

Finance:

Financial companies are using E-commerce to a large extent. Customers can check the balances

of their savings and loan accounts, transfer money to their other account and pay their bill

through on-line banking or E-banking. Another application of E-commerce is on-line stock

trading. Many Websites provide access to news, charts, information about company profile and

analyst rating on the stocks.

Manufacturing:

E-commerce is also used in the supply chain operations of a company. Some companies form an

electronic exchange by providing together buy and sell goods, trade market information and run

back office information such as inventory control. This speeds up the flow of raw material and

finished goods among the members of the business community. Various issues related to the

strategic and competitive issues limit the implementation of the business models. Companies

may not trust their competitors and may fear that they will lose trade secrets if they participate in

mass electronic exchanges.

Auctions:

Customer-to-Customer E-commerce is direct selling of goods and services among customers. It

also includes electronic auctions that involve bidding. Bidding is a special type of auction that

allows prospective buyers to bid for an item. For example, airline companies give the customer

an opportunity to quote the price for a seat on a specific route on the specified date and time.

Types of e-commerce:

There are 6 basic types of e-commerce:

Business-to-Business (B2B)

Business-to-Consumer (B2C)

Consumer-to-Consumer (C2C)

Consumer-to-Business (C2B).

Business-to-Administration (B2A)

Consumer-to-Administration (C2A)

1. Business-to-Business (B2B)

Business-to-Business (B2B) e-commerce encompasses all electronic transactions of goods or

services conducted between companies. Producers and traditional commerce wholesalers

typically operate with this type of electronic commerce.

2. Business-to-Consumer (B2C)

The Business-to-Consumer type of e-commerce is distinguished by the establishment of

electronic business relationships between businesses and final consumers. It corresponds to the

retail section of e-commerce, where traditional retail trade normally operates.

These types of relationships can be easier and more dynamic, but also more sporadic or

discontinued. This type of commerce has developed greatly, due to the advent of the web, and

there are already many virtual stores and malls on the Internet, which sell all kinds of consumer

goods, such as computers, software, books, shoes, cars, food, financial products, digital

publications, etc.

When compared to buying retail in traditional commerce, the consumer usually has more

information available in terms of informative content and there is also a widespread idea that

you’ll be buying cheaper, without jeopardizing an equally personalized customer service, as well

as ensuring quick processing and delivery of your order.

3. Consumer-to-Consumer (C2C)

Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions of

goods or services conducted between consumers. Generally, these transactions are conducted

through a third party, which provides the online platform where the transactions are actually

carried out.

4. Consumer-to-Business (C2B)

In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of e-

commerce is very common in crowdsourcing based projects. A large number of individuals make

their services or products available for purchase for companies seeking precisely these types of

services or products.

Examples of such practices are the sites where designers present several proposals for a company

logo and where only one of them is selected and effectively purchased. Another platform that is

very common in this type of commerce are the markets that sell royalty-free photographs,

images, media and design elements, such as iStockphoto.

5. Business-to-Administration (B2A)

This part of e-commerce encompasses all transactions conducted online between companies and

public administration. This is an area that involves a large amount and a variety of services,

particularly in areas such as fiscal, social security, employment, legal documents and registers,

etc. These types of services have increased considerably in recent years with investments made

in e-government.

6. Consumer-to-Administration (C2A)

The Consumer-to-Administration model encompasses all electronic transactions conducted

between individuals and public administration.

Examples of applications include:

Education – disseminating information, distance learning, etc.

Social Security – through the distribution of information, making payments, etc.

Taxes – filing tax returns, payments, etc.

Health – appointments, information about illnesses, payment of health services, etc.

Both models involving Public Administration (B2A and C2A) are strongly associated to the idea

of efficiency and easy usability of the services provided to citizens by the government, with the

support of information and communication technologies.

World Wide Web

World Wide Web (WWW or W3), collection of globally distributed text and multimedia

documents and files and other network services linked in such a way as to create an immense

electronic library from which information can be retrieved quickly by intuitive searches. The

Web represents the application of hypertext technology and a graphical interface to the Internet

to retrieve information that is contained in specially formatted documents that may reside in the

same computer or be distributed across many computers around the world. It consists of three

main elements. The Hypertext Markup Language (HTML) comprises the programming codes, or

tags, that define fonts, layouts, embedded graphics, and links (hyperlinks) to other documents

accessible via the Web. The HyperText Transfer Protocol (HTTP) defines a set of standards for

transmitting Web pages across the Internet. The Uniform Resource Locator (URL) is a

standardized naming convention for identifying a Web document, image, or other file by its

location, in a sense the address of a file. The result is called the Web because it is made up of

many sites, all linked together, with users traveling from one site to the next by clicking a

computer's pointing device on a hyperlink.

Web sites, also called Web pages, are really Internet sites that all use the same techniques and

HTML tags to create multimedia documents with hypertext links. Each Web page can contain

many screens or printed pages of text, graphics, audio, and even video, and the starting point for

any Web site is called its home page. Although each page is an Internet site, it must be accessed

via a special program called a Web browser, which can translate the HTML into the graphical

images, text, and hypertext links intended by the creator of the page.

Interactive television is a generic term that encompasses a variety of Web-related television

technologies and products. Typically, a home television receiver and a telephone line are

connected through a small appliance that accesses the Internet through the telephone line and

converts the downloaded Web pages into a form that can be displayed on the receiver. A remote

control interface allows the user to navigate through the Web and select the information to be

displayed.

Ted Nelson, an American computer consultant, had promoted the idea of linking documents via

hypertext during the 1960s, but the technology required was not to be available for another 20

years. The foundation of what we now think of as the Web originated with work done on the

retrieval of information from distributed systems by Tim Berners-Lee at CERN during the 1980s.

This culminated in the introduction of a text-only interface, or browser, to the scientific

community in 1990 and to the public in 1991. Because of the difficulty of using this version,

acceptance outside the scientific and academic communities was slow. Marc Andreessen, an

undergraduate student working at the National Center for Supercomputing Applications (NCSA),

developed a graphical browser for the Web, introducing a UNIX version in 1993. Versions for

the Windows and Macintosh operating systems followed in 1994, and acceptance of the World

Wide Web blossomed quickly. In the late 1990s the development of improved browsers with

greater multimedia functionality, security, and privacy, as well as more powerful search engines

capable of indexing the ever greater information on the Web, led to the commercialization of the

Internet (see e-commerce).

Threat

In computer security a threat is a possible danger that might exploit a vulnerability to breach

security and therefore cause possible harm.

A threat can be either "intentional" (i.e. hacking: an individual cracker or a criminal

organization) or "accidental" (e.g. the possibility of a computer malfunctioning, or the possibility

of a natural disaster such as an earthquake, a fire, or a tornado) or otherwise a circumstance,

capability, action, or event.

hreats can be classified according to their type and origin:[2]

Type of threat

Physical damage

fire

water

pollution

natural events

climatic

seismic

volcanic

loss of essential services

electrical power

air conditioning

telecommunication

compromise of information

eavesdropping,

theft of media

retrieval of discarded materials

technical failures

equipment

software

capacity saturation

compromise of functions

error in use

abuse of rights

denial of actions

Origin

Deliberate: aiming at information asset

spying

illegal processing of data

accidental

equipment failure

software failure

environmental

natural event

loss of power supply

Negligence: Known but neglected factors, compromising the network safety and

sustainability.

E-commerce payment system

An e-commerce payment system facilitates the acceptance of electronic payment for online

transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce

payment systems have become increasingly popular due to the widespread use of the internet-

based shopping and banking.

Over the years, credit cards have become one of the most common forms of payment for e-

commerce transactions. In North America almost 90% of online retail transactions were made

with this payment type. Turban et al. goes on to explain that it would be difficult for an online

retailer to operate without supporting credit and debit cards due to their widespread use.

Increased security measures include use of the card verification number (CVN) which detects

fraud by comparing the verification number printed on the signature strip on the back of the card

with the information on file with the cardholder's issuing bank. Also online merchants have to

comply with stringent rules stipulated by the credit and debit card issuers (Visa and MasterCard)

this means that merchants must have security protocol and procedures in place to ensure

transactions are more secure. This can also include having a certificate from an authorized

certification authority (CA) who provides PKI (Public-Key infrastructure) for securing credit and

debit card transactions.

Despite widespread use in North America, there are still a large number of countries such as

China, India and Pakistan that have some problems to overcome in regard to credit card security.

In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to

a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash

which transfers from the consumers’ card to the sellers’ device. A popular smartcard initiative is

the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card

from your bank account, and you can then use your card at various retailers and on the internet.

There are companies that enable financial transactions to transpire over the internet, such as

PayPal. Many of the mediaries permit consumers to establish an account quickly, and to transfer

funds into their on-line accounts from a traditional bank account (typically via ACH

transactions), and vice versa, after verification of the consumer's identity and authority to access

such bank accounts. Also, the larger mediaries further allow transactions to and from credit card

accounts, although such credit card transactions are usually assessed a fee (either to the recipient

or the sender) to recoup the transaction fees charged to the mediary.

The speed and simplicity with which cyber-mediary accounts can be established and used have

contributed to their widespread use, although the risk of abuse, theft and other problems—with

disgruntled users frequently accusing the mediaries themselves of wrongful behavior—is

associated with them.

Contents

1 Methods of Online Payment

1.1 Net banking

1.2 PayPal

1.3 Google Wallet

1.4 Mobile Money Wallets

1.5 Bitcoin

2 See also

3 Further reading

4 References