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UNIT-1

1. E-COMMERCE
2. Characteristics of e – commerce:-
3. Advantage of e – commerce:-
4. Limitations of e-commerce-
5. E-COMMERCE APPLICATIONS:
6. TRADITIONAL COMMERCE & E-COMMERCE
7. HTML –HYPERTEXT MARK UP LANGUAGE
8. INTRODUCTION- CONCEPT & EVOLUTION OF INTERNET
9. INTERNET AND ITS USE
10. INTERNET – IMPORTANT TERMS/FACTS :-
11. USES OF INTERNET
12. HYPERTEXT
13. HTTP
14. HTTPD

E-COMMERCE
The term commerce is define as trading of good & services or if ‘e’ for ‘electronic’ is added to this,
the definition of e – commerce is defined as trading of goods, services, information or anything else
of value between two entities over the internet.

Following are some definitions of e – commerce:-

1. It is the ability to conduct business electronically over the internet.

2. It means managing transactions using networking and electronic means.

3. It is a platform for selling products & services via internet.

Characteristics of e – commerce:-

1.Establishment of B to B relationship.

2. Electronic payment.

3. e – distribution of products & services.

4. Exchange of information.

5. Pre and post – sales support.

6. Customer relationship management.

Advantage of e – commerce:-
1. Facilitates the globalization of business:-e – commerce facilitates the globalization of business
by providing some economical access to distant markets and by supporting new opportunities for
firms to increase economies by distributing their products internationally.

2. Provides increased purchasing opportunities for the buyer:-As e – commerce increases sales
opportunities for the seller, it also increases purchasing opportunities for buyer.

3. Lowering staffing cost:- As in e – commerce, the selling & purchasing process is outline, the
amount of interaction with staff is minimized.

4. Market based expansion:- An e – commerce is open to entirely new group of users, which
include employees, customers, suppliers & business partners.

5. Increased profits:-With e – commerce, companies reach more & more customers where physical
commerce cannot reached, thus increasing profits.

6. Increased customer service & loyality:- e – commerce enables a company to be open for
business wherever a customer needs it.

7. Increase speed & accuracy:- E – commerce see the speed and accuracy with which business can
exchange information, which reduces cost on both sides of transactions. It is available 24 hours a
day & 7 days a weak.

8. Reduction of paper storage.

9. Increased response times:- In e – commerce, the interaction with the system take place in real
time & therefore allows customer or bidder to respond more quickly & thus reduces the time of
discussion between then as in traditional commerce.

Limitations of e-commerce-

1. Security:- the security risk in e – commerce can be-


• Client / server risk
• Data transfer and transaction risk
• Virus risk
2. High start up cost:- The various components of cost involved with e – commerce are:-
• Connection:- connection cost to the internet.
• Hardware / software:- this includes cost of sophisticated computer, moduer, routers, etc.
• Maintenance:- this include cost invole in traning of employees and maintenance of web-
pages.

3. Legal issues:- these issues arises when the customer data is fall in the hands of strangers.
4. Lack of skilled personnel:- there is difficulty in finding skilled www developers and
knowledgeable professionals to manage and a maintain customer on line.
5. Loss of contact with customers:-Sometimes customers feels that they doesnot have
received sufficient personal attention.
6. Uncertainty and lack of information:- most of the companies has never used any
electronic means of communication with its customers as the internet is an unknown mode
for them.
7. Some business process may never be available to e – commerce:-Some items such as
foods, high cost items such as jewelry may be impossible to be available on the internet.

E-COMMERCE APPLICATIONS:
Globally E-Commerce is applied in the following fields.

1. E Marketing 2. E-Advertising 3. E-Banking 4. Mobile Commerce 5. E-Learning 6. E-


Shopping 7. Online training 8. Search Engines 9. Entertainment

1)E-MARKETING :

 E-Marketing also known as Internet marketing, Online marketing, Web marketing. It


is the marketing of products or services over the internet.
 It is consider to be broad in scope because not refers to marketing on the internet
but also done in Email and wireless media.
 E-Marketing ties together the creative and technical aspects of the internet,
including design development, advertising and sales.
 Internet marketing is associated with several business models ie., B2C, B2B, C2C.
 Internet marketing is inexpensive when examine the ratio of cost to the reach of the
target.

2)E-ADVERTISING:

 It is also known as online advertising it is a form of promotion that uses internet


and world wide web to deliver marketing messages to attracts customers.
Example: Banner ads, Social network advertising, online classified advertising
etc.,
 The growth of these particular media attracts the attention of advertisers as a
more productive source to bring in consumers.
 An online advertisement also offers various forms of animation.
 The term online advertisement comprises all sorts of banner advertisement,
email advertising, in game advertising and key soon.

3) E-BANKING OR INTERNET BANKING:

Means any user with a personal computer and browser can get connected to his banks,
website to perform any of the banking functions. In internet banking system the bank
has a centralized data base i.e., web-enabled.
Best example for E-Banking is ATM.

An ATM is an electronic fund transfer terminal capable of handling cash deposits,


transfer between ALCS, Balance enquiries, cash withdrawals, and pay bills.

SERVICES THROUGH E-BANKING:

• Bill payment service.

• Fund Transfer

• Investing through internet Banking

• Shopping

Customers should never share personal information’s like pin nos., passwords, etc.,
with any one. Through internet banking, you can check your transactions at any time of
the day, and as many times as you want.

4) MOBILE-COMMERCE:

Mobile Commerce also known as M-Commerce, is the ability to conduct, commerce as a


mobile device, such as mobile phone.

SERVICES ARE:

1. Mobile ticketing

2. Mobile Vouchers, Coupons and

3. Mobile contract purchase and delivery mainly consumes of the sale of ring tones,
wallpapers and games of mobile phones.

4. Local base services Local discount offers Local weather

5. Information services News Sports, Scores

6.MOBILE BANKING: Banks and other financial institutions used mobile commerce to
allow their customers to assess account information and make transactions, such as
purchasing, withdrawals etc.,

7. MOBILE BROWSING: Using a mobile browser- A www browser on mobile device


customers can shop online without having to be at their personal computer.

5) E-LEARNING: E-Learning is essentially the computer and network-enabled transfer


of skills and knowledge.
E-Learning comprises all forms of electronically supported learning and teaching.

E-Learning applications and processes include web-based learning, computer-based


learning. Content is delivered via. The internet, intranet/extranet, audio, or video tape,
satellite TV, and ED-ROM.

Computer-Based Learning, sometimes abbreviated to CBL, refers to the use of


computers as a key component of the education environment.

E-Learning is naturally suited to distance and flexible learning, but can also be used
conjunction with face-to-face teaching.

E-Learning can also refer to the educational website such as those offering learning
scenarios worst and interactive exercises for children.

Communication technologies are used in E-Learning.

A learning management system (LMS) is software used for delivering, tracking, and
managing training /education.

6) ONLINE SHOPPING:-

Online shopping is the process where by consumer directly buy goods or services from
a sell in real time, without an intermediary services over the internet .it is a form of
Ecommerce .

 An online shop, e-shop, e-store, internet shop web shop, web store, online store,
or virtual shop evokes the physical analogy of buying products or services in a
shopping center.
 The process is called business-to-consumer (B2C) online shopping. When a
business buys from another business it is called business-to-business (B2B)
online shopping.
 In order to shop online, one must be able to have access to a computer, a bank
account and debit card. Online shopping widened the target audience to men and
women of the middle class.
 Online shoppers commonly use credit card to make payments , however some
systems enable users to create accounts and pay by alternative means ,such as
1. Billing to mobile phones and landline.
2. Cheque.
3. Debit cards.
4. Gift cards
5. Postal money order.
 Online stores are usually available 24 hours a day, and many consumers have
internet access both at work and at home.
 Online stores must describe products for sale with text, phones, and multimedia
files.
 One advantage of shopping online is being able to quickly seek out deals for
items or services with many different vendors.
 Another major advantage for retailers is the ability to rapidly switch suppliers
and vendors without disrupting users shopping experience.

7) SEARCH ENGINE:-

A web search engine is designed to search for information on the WWW and FTP
servers.

 The search results are generally presented in list of result and are often called
hits.
 The information may consist of web pages, images, information, and other types
of files.
 Some search engines also mine data available in database or open directories.
 Search engines work by storing information about many web pages, which they
retrieve from the HTML itself.
 When a user enters a query into a search engine (typically by using keywords),
the engine examines its index and provides a listing of best matching according
to its criteria.
 Most search engines support the use of Boolean operator AND, OR, and NOT.
 Some search engines, such as GOOGLE, store all or part of the source page as well
as information about the web pages.

8) ONLINE TRADING:-

An online trading community provides participants with a structured method for


trading bantering (exchanging goods with goods) or selling goods and services.

 These communities often have forums and chat rooms, designed to facilitate
communication between the members.
 A formal trading community consists of a website or network of websites that
facilitates and track made transactions.
 While trading any used items online, be sure to include the condition and quality
of the product so as the receiver can determine its overall value.
 A trading circle is a form of online trading design to facilitate viewing of
television series and episode media.
9) ENTERTAINMENT:- The conventional media that have been used for entertainment
are

1. Books/magazines.

2. Radio.

3. Television/films.

4. Video games.

The internet as an entertainment media is not a elastic by itself, but rather a unique
interactions of all of the above media.

 Computer based systems have been used as an entertainment medium in the


form of video games , CD , ROMs , etc..
 Online books /newspapers, online radio, online television, online firms, and
online games are common place in internet where we can entertain.
 Online social networking websites are one of the biggest sources of E-
entertainment for today’s tech-savvy (who have knowledge interest in)
generation.

TRADITIONAL COMMERCE & E-COMMERCE

1. Customer can easily identify & authenticate a merchant by seeing directly to him. 2. Customers
can directly talk

2. Customer can only see to merchant. Communication the representation & can only see the web
pages is not in the hands of a third party.

3. Customers can interact with other customers and gain feedback about

4. It is not available all the time.

5. It is slow method.

Whereas in e-commerce

1. It is not easy in this case.

2. Customer can only see to merchant. Communication the representation & can only see the web
pages is not in the hands of a third party.

3. Customer cannot interact merchant from other customers. with other customers.

4. It is always available 24* 7*365 hours.


5. It is fast method.

6. Customer have to give their merchant & there is no need to personal information to give their
name or address. Purchase the product. So there is no worry about personal information.

HTML –HYPERTEXT MARK UP LANGUAGE


Introduction - Hypertext Markup Language (HTML) is a syntax used to format a text
document on the web. These documents are interpreted by web browsers such as Internet
Explorer and Netscape Navigator. HTML can be created as standard ASCII text with "tags"
included to pass on extra information about character formatting and page layout to a web
browser. The fact that HTML is, in essence, ASCII text is what makes it so universally
compatible. This fact also makes it easy to edit: almost all computers are equipped with a
text editor that can be used to edit HTML

HTML – CREATION OF PAGE(S) …-HTML pages can be created in a number of ways. An


HTML page is essentially a text document. You can create one in the simplest of text editors
such as Microsoft Notepad in Windows, SimpleText in Mac OS, or Pico in Unix. Using these
tools, you will need to edit the HTML code and insert HTML tags where necessary. You can
also create pages using WYSIWYG (What You See Is What You Get) editors which do most
of the work of coding for you. With WYSIWYG editors, such as Macromedia Dreamweaver
and Adobe GoLive, you can type in a page as you would in a word processor, and the
software adds formatting tags where necessary. You can then look into the code for fine-
tuning.

To save a file as HTML, open the text you wish to edit or type it into Notepad, and choose
"File...Save As..." from the menu bar. Under "File name" give your file a name and change its
extension from ".txt" to ".html." Under "Save as type" switch to "All Files" then click "OK."
Notepad will save your file as ASCII text, and the ".html" or ".htm" extension will allow your
browser to recognize it as an HTML file. (Hint - When naming an HTML file, it is a good idea
to use a name without any spaces or uppercase letters. So, if you wanted to name a file Test
page, some options would be testpage or test_page.)
To open your file in Netscape, choose "File...Open Page..." from Netscape's menu bar, and
click "Choose File." Navigate to the drive and directory in which you saved your HTML, and
double click on the file.
To edit your HTML, go back to Notepad, make your changes, and choose "File...Save" from
the menu bar. Then go back to Netscape, and click the "Reload" button to bring in your
latest changes
HTML- TAGS - Tags are what we use to structure an HTML page. Tags start with a '<', then
the command, and end with a '>'. For example, the center tag is <center>. To stop centering
something, we need an ending, or closing tag. Closing tags look exactly like opening tags,
except after the first '<' there is a '/'. In other words, the closing tag for center is
'</center>’.
INTRODUCTION- CONCEPT & EVOLUTION OF INTERNET
The vast, global internet of today had rather humble origins when it initiated. In 1969, the
Department of Defense Advanced Research Projects Agency (ARPA) developed an
experimental network called ARPAnet to link together four supercomputing centers for
military research. This network had the many and difficult design requirements that it had
to be fast, reliable, and capable of withstanding a nuclear bomb destroying any one
computer center on the network. From those original four computers, this network evolved
into the sprawling network of millions of computers we know today as the internet.

The internet itself is really a massive "network of networks." There is no central "Internet,
Inc," to which you can connect. Essentially, it is a collection of Internet service providers
(ISPs) who each operate their own networks, with their own clients, and agree to
interconnect with each other and exchange packets. Many of the large ISPs sell connections
to their network to smaller ISPs, some of whom again sell connections to other ISPs.

Ultimately, these ISPs at all levels sell connections to individuals and corporations, who
then merge their networks (or individual computers) into this larger network called the
internet.

While there is no exact governance of the Internet, communication standards and


coordination of ISP actions are overseen by a nonprofit organization called the Internet
Society.

An affiliated organization, the Internet Engineering Task Force (IETF) coordinates the work
of numerous committees that define Internet communication standards and research
methods of explaining and improving Internet communication. The actual communication
standards are referred to as RFCs (Requests for Comments) and are voluntarily adhered to
by all ISPs.

Internet uses can be simply categorized as publishing and getting information on various
subjects like marketing, management, science, new technologies, training materials, jobs,
higher education, mathematics, music, games, software, etc. and E-Commerce and the kind
of information available in the internet can also be listed as text documents, graphic files,
sound and video files, downloadable games and software, demo games and software, etc.

At the speed the internet has been evolving, many predictions can be made about the
internet in the future, like main communication method coming with functions of being
translated automatically into the language preferred by the receiver, finding a tune through
humming into the microphone, virtual tours of a house, car, etc. could become common
thing.
This is what the Internet has become today, starting from its modest birth in 1969, to
become an indispensable service for the human race at present and will remain the same in
the future.

INTERNET AND ITS USE

Internet has become a necessity to a large portion of the world population today, with no
disparity between age, race, color, religion, nationality or gender; but what really they are
all using it for are for different requirements based on their needs, area of study and work.

The internet has become a God sent blessing to many to do research work and find general
information about a subject instantly without much effort or expense. The internet has
become the best largest and most useful encyclopedia of information. In fact the web is far
better then a encyclopedia which gives only one perspective on a subject while the internet
is sure to have different perspectives on a single topic giving a individual the opportunity to
be well read on the particular topic.

Have you ever had to pay tons of money or go through lots of trouble to find information
about very rare topics? Well that was in the good old days. The internet will have
information on even the rarest topic you could think of.

The internet is vastly used for communication. Whether at home or at work, emails, chats,
video conferencing, voice calls, etc. have become the most convenient, cost effective and
fastest methods to communicate with your friends, family, colleagues and even strangers.
In fact the internet has become a great source to meet new people, and build new
friendships and relationships.

Discussion forums available on the internet are useful to users to find individuals with the
same interest and discuss as much as you like about the topic. You will never feel like you
have no one to talk to on a particular topic, if you are lucky enough to find a discussion
forum which gives you a forum for it. It has become a whole lot easier to shop with the
internet, sitting in your seat and being able to select the best cost at its best bargain.

If you ask many people what their hobbies are, some may reply as to 'browsing the
internet'. In fact the internet is the best device for fun. Whether it is games, songs, movies,
community groups, etc. There is plenty to keep you occupied in your spare time. Many use
the internet to download free versions of softwares and cracks, to read news and learn.

And so continues the many uses of the internet to all human beings, young and old.

INTERNET – IMPORTANT TERMS/FACTS :-

Internet Based Services:


Some of the basic services available to Internet users are:

Email: A fast, easy, and inexpensive way to communicate with other Internet users around
the world. Telnet: Allows a user to log into a remote computer as though it were a local
system.

FTP: Allows a user to transfer virtually every kind of file that can be stored on a computer
from one Internet-connected computer to another.

World Wide Web (WWW): A hypertext interface to Internet information resources.

WWW- This stands for World Wide Web. A technical definition of the World Wide Web is :
all the resources and users on the Internet that are using the Hypertext Transfer Protocol
(HTTP).A broader definition comes from the organization that Web inventor Tim Berners-
Lee helped found, the World Wide Web Consortium (W3C):

The World Wide Web is the universe of network-accessible information, an embodiment of


human knowledge.In simple terms, The World Wide Web is a way of exchanging
information between computers on the Internet, tying them together into a vast collection
of interactive multimedia resources.

2.HTTP - This stands for HyperText Transfer Protocol. This is the protocol being used to
transfer hypertext documents thats makes the World World Wide possible.A standard web
address such as http://www.yahoo.com/ is called a URL and here the prefix http indicates
its protocol

3. URL- URL stands for Uniform Resource Locator, and is used to specify addresses on the
World Wide Web. A URL is the fundamental network identification for any resource
connected to the web (e.g., hypertext pages, images, and sound files).

A URL will have the following format: protocol://hostname/other_information The


protocol specifies how information from the link is transferred. The protocol used for web
resources is Hypertext Transfer Protocol (HTTP). Other protocols compatible with most
web browsers include FTP, telnet, newsgroups, and Gopher. The protocol is followed by a
colon, two slashes, and then the domain name. The domain name is the computer on which
the resource is located. Links to particular files or subdirectories may be further specified
after the domain name. The directory names are separated by single forward slashes.

4.WEBSITE -Currently you are on our website http://www.tutorialspoint.com which is a


collection of various pages written in HTML markup language. This is a location on the web
where people can find tutorials on latest technologies. Similar way there are millions of
websites available on the web. Each page available on the Website is called a web page and
first page of any web site is called home page for that site.
5. WEB SERVER - Every Web site sits on a computer known as a Web server. This server is
always connected to the internet. Every Web server that is connected to the Internet is
given a unique address made up of a series of four numbers between 0 and 256 separated
by periods.for example, 68.178.157.132 to 68.122.35.127.

When you register a Web address, also known as a domain name, such as
tutorialspoint.com you have to specify the IP address of the Web server that will host the
site.

6.WEB BROWSER - Web Browsers are software installed on your PC. To access the Web
you need a web browsers, such as Netscape Navigator, Microsoft Internet Explorer or
Mozilla Firefox.

Currently you must be using any sort of Web browser while you are naviating through my
site tutorialspoint.com. On the Web, when you navigate through pages of information this is
commonly known as browsing or surfing.

7.SMTP SERVER - This stands for Simple Mail Transfer Protocol Server. This server takes
care of delivering emails from one server to another server. When you send an email to an
email address, it is delivered to its recipient by a SMTP Server.

8.ISP - This stands for Internet Service Provider. They are the companies who provide you
service in terms of internet connection to connect to the internet.You will buy space on a
Web Server from any Internet Service Provider. This space will be used to host your Web
site.

9.HTML - This stands for HyperText Markup Language. This is the language in which we
write web pages for any Website. Even the page you are reading right now is written in
HTML.This is a subset of Standard Generalized Mark-Up Language (SGML) for electronic
publishing, the specific standard used for the World Wide Web.

10. HYPERLINK - A hyperlink or simply a link is a selectable element in an electronic


document that serves as an access point to other electronic resources. Typically, you click
the hyperlink to access the linked resource. Familiar hyperlinks include buttons, icons,
image maps, and clickable text links.

11.DNS - DNS stands for Domain Name System. When someone types in your domain
name, www.example.com, your browser will ask the Domain Name System to find the IP
that hosts your site. When you register your domain name, your IP address should be put in
a DNS along with your domain name. Without doing it your domain name will not be
functioning properly.
12.W3C - This stands for World Wide Web Consortium which is an international
consortium of companies involved with the Internet and the Web.The W3C was founded in
1994 by Tim Berners-Lee, the original architect of the World Wide Web. The organization's
purpose is to develop open standards so that the Web evolves in a single direction rather
than being splintered among competing factions. The W3C is the chief standards body for
HTTP and HTML

USES OF INTERNET
Internet is today one of the most important part of our daily life. There are large numbers
of things that can be done using the internet and so it is very important. You can say that
with the progress in the internet we are progressing in every sphere of life as it not only
makes our tasks easier but also saves a lot of time. Today internet is used for different
purposes depending upon the requirement. Here in this very article we have mentioned
then ten best uses of the internet. Here goes the list.

1. Communication - Communication is the most important gift that the internet has given
to the common man. Email, social networking sites are some of the prime example of it.
This is one such gift of the internet which is cherished by everyone and has made our life
easier to much extent.

2. Research - Now the point that has been placed next is research. In order to do research
you need to go through hundreds of books as well as the references and that was one of the
most difficult jobs to do earlier. Since the internet came into life, everything is available just
a click away. And since internet is here to make your research public, you can then benefit a
large amount of people from the research work that you have done.

3. Education - The next point that we have in this list is education. Yes you read it right.
Education is one of the best things that the internet can provide. There are a number of
books, reference books, online help centres, expert’s views and other study oriented
material on the internet that can make the learning process very easier as well as a fun
learning experience. There are lots and lots of websites which are related to different topic.

4. Financial Transaction - Now you don’t need to stand in the queue at the branch of your
particular bank rather you can just log in on to the bank website with the credential that
has been provided to you by the bank and then can do any transaction related to finance at
your will.

5. Real Time Updates - Real time updates have been placed at the number fifth position
here.. There are various websites on the internet which provides you with the real time
updates in every field be it in business, sports, finance, politics, entertainment and others.
6. Leisure -Leisure is the option that we have next in the list. Yes you heard it right. Right
from watching your favorite videos to listening songs, watching movies, playing games,
chatting with the loved ones has been possible due to internet..

7. Online Booking - Not only the online booking process is easier as well as less tedious
but is also reliable. There is no need to visit the booking counters to book tickets or to
contact the agents that might ask for more money in order to process your request. You can
do all these things sitting at home, using internet.

8. Job Search - Job search is one such thing which required updates from every corner as
well the patience from the person searching for it. Using internet, this has become an easier
task. Job search has been placed at the number eighth place. There are endless amount of
websites on the internet that provided with the news about the vacancy in various
companies.

9. Blogging - There are many people who are very much interested in writing blogs and for
them internet is the best place. There is huge number of websites over the internet which
allows you to write blogs. You just need to get yourself registered as per their procedure
and then start writing.

10. Shopping - Shopping has now become one of the most pleasing things to do using the
internet. Whenever you find time, just visit the concerned websites and order the items
that you need from there.Those items will be delivered to you in best possible time.

HYPERTEXT
Hypertext is text displayed on a computer display or other electronic devices with
references (hyperlinks) to other text which the reader can immediately access, or where
text can be revealed progressively at multiple levels of detail (also calledStretchText).

Hypertext documents are interconnected by hyperlinks, which are typically activated by


a mouse click, keypress sequence or by touching the screen.

Apart from text, the term "hypertext" is also sometimes used to describe tables, images,
and other presentational content forms with integrated hyperlinks.

Hypertext is one of the key underlying concepts of the World Wide Web where Web pages
are often written in the Hypertext Markup Language (HTML).

As implemented on the Web, hypertext enables the easy-to-use publication of information


over the Internet.
HTTP
The Hypertext Transfer Protocol (HTTP) is an application-level protocol for distributed,
collaborative, hypermedia information systems. This is the foundation for data
communication for the World Wide Web (i.e. internet) since 1990. HTTP is a generic and
stateless protocol which can be used for other purposes as well using extensions of its
request methods, error codes, and headers.

Basically, HTTP is a TCP/IP based communication protocol, that is used to deliver data
(HTML files, image files, query results, etc.) on the World Wide Web. The default port is
TCP 80, but other ports can be used as well. It provides a standardized way for computers
to communicate with each other. HTTP specification specifies how clients' request data
will be constructed and sent to the server, and how the servers respond to these requests.

Basic Features
There are three basic features that make HTTP a simple but powerful protocol:

 HTTP is connectionless: The HTTP client, i.e., a browser initiates an HTTP request and after a
request is made, the client disconnects from the server and waits for a response. The server
processes the request and re-establishes the connection with the client to send a response
back.

 HTTP is media independent: It means, any type of data can be sent by HTTP as long as both
the client and the server know how to handle the data content. It is required for the client as
well as the server to specify the content type using appropriate MIME-type.

 HTTP is stateless: As mentioned above, HTTP is connectionless and it is a direct result of HTTP
being a stateless protocol. The server and client are aware of each other only during a current
request. Afterwards, both of them forget about each other. Due to this nature of the protocol,
neither the client nor the browser can retain information between different requests across the
web pages.

HTTP/1.0 uses a new connection for each request/response exchange, where as HTTP/1.1 connection
may be used for one or more request/response exchanges.

Basic Architecture
The following diagram shows a very basic architecture of a web application and depicts
where HTTP sits:
The HTTP protocol is a request/response protocol based on the client/server based
architecture where web browsers, robots and search engines, etc. act like HTTP clients,
and the Web server acts as a server.

Client
The HTTP client sends a request to the server in the form of a request method, URI, and
protocol version, followed by a MIME-like message containing request modifiers, client
information, and possible body content over a TCP/IP connection.

Server
The HTTP server responds with a status line, including the message's protocol version and
a success or error code, followed by a MIME-like message containing server information,
entity meta information, and possible entity-body content.
Request Method
The request method indicates the method to be performed on the resource identified by
the given Request-URI. The method is case-sensitive and should always be mentioned in
uppercase. The following table lists all the supported methods in HTTP/1.1.

S.N. Method and Description

1 GET

The GET method is used to retrieve information from the given server using a given URI.
Requests using GET should only retrieve data and should have no other effect on the data.

2 HEAD

Same as GET, but it transfers the status line and the header section only.

3 POST

A POST request is used to send data to the server, for example, customer information, file
upload, etc. using HTML forms.

4 PUT

Replaces all the current representations of the target resource with the uploaded content.

5 DELETE

Removes all the current representations of the target resource given by URI.

6 CONNECT

Establishes a tunnel to the server identified by a given URI.

7 OPTIONS
Describe the communication options for the target resource.

8 TRACE

Performs a message loop back test along with the path to the target resource.

HTTPD

HTTP Daemon is a software program that runs in the background of a web server and
waits for the incoming server requests. The daemon answers the request automatically and
serves the hypertext and multimedia documents over the internet using HTTP.
httpd stands for Hypertext Transfer Protocol Daemon (i.e. web server).
UNIT-2
 ROLE OF WEB – SITE IN B2C E-COMMERCE
 Web-site design principles
 Push and pull strategies
 Types of e-commerce to communicate with customers
 Multi – Media & E-commerce

ROLE OF WEB – SITE IN B2C E-COMMERCE

B2C is a shortened term for business to consumer marketing where consumer is


buyer of products which are not related to business like goods and services like
food, clothes, cars, house, phone services and credit repair services etc.This
ecommerce marketing strategy includes purchasing and selling of products and
services that take place on website. Generally we can say that B2C ecommerce
solution is somewhat similar with B2B ecommerce solution because of some same
functionality that both hold.
B2C ecommerce solution has intended to make customers shopping experience safe-
secure and hassle free. By obtaining this marketing strategy a single business
owners can reach their business on high-level of success. This solutions comes with
amazing feature called ‘live chat option’ through customers can talk directly to store
owners to negotiate at some level to place an order of their desired things. Even this
solutions increase the trust value of store which is most important to make store a
‘Brand’.
This solution is design to save customers time and money, in the sense of they don’t
have to travel anywhere else and don’t need to pay for traveling. As well as through
this solution, customers will also get online purchased products at their doorstep.
B2C ecommerce solution has made shopping procedure and check-out procedure
easier than before.It is important for business owners to analyze how they can carry
out their ecommerce store that meets the customer’s requirements.
Business owners should follow to run a successful ecommerce store online
with B2C ecommerce solutions:
 Make online purchasing experience hassle free.
 Update your store day by day and put some attractive offer on your store.
 Use tested and trusted payment method.
 Create mobile and tablet compatible e-store.

Advantages to E-commerce Websites

– Catalog flexibility and Online fast updating - Shrinks the Competition Gap
- Unlimited Market Place and Business Access Which Extend Customer Base
- A 24 Hour Store Reduced Sale Cycle
- Lower Cost of Doing Business
- Eliminate Middlemen
- Easier Business Administration
- Frees Your Staff
- Customers will love it
- More Efficient Business Relationships
- Secure Payment Systems

WEBSITE DESIGN PRINCIPLES FOR E-COMMERCE WEBSITES


 The design of the site will determine its organizational framework.
 The fundamental organizing principle in website design is meeting user’s needs.
 In e-commerce sites the crucial design parameters are efficient navigation, search,
along with speed and technically simple and basics e.g. Amazon, Yahoo!, and eBay.
 Fast loading web site designs.
 Neat and Easy Navigation.
 Minimize the use of images.
 Cross Browser Compatible.
 Ensure Web site scalability.
 Clean Layout Design.
 Readable and professional looking fonts.
 Program using pure CSS.
 Maintain a consistent look and feel throughout your site.
 Don’t load your website with a lot of high tech clutter.
 Don’t use unnecessary words or phrases on your site.
 Don’t make the mistake that everyone will totally understand your website
message.
 Don’t write your strongest point or benefit only once.
 Don’t push all your words together on your website.
 Don’t use site content your target audience isn’t interested in.
 Don’t use 50 different content formats all over your website.
 Don’t use words your website visitors might not understood.
 Don’t let selling words and phrases go unnoticed.
 Don’t forget to use words that create emotion.
PUSH AND PULL APPROACHES
Let’s begin by defining both: Push Marketing is when you actively push your product toward a
targeted audience. In some cases, you literally create a market for your product. For example, you
have launched a website featuring your own custom made and designed baby clothes….then you
advertise this clothing and your website with PPC, display ads, etc. In this case, you are creating a
market for your product and pushing consumers toward it.

Push marketing is usually geared directly to the buyer. Pull marketing involves creating a demand
for your product. A good example of this would be the infamous Tickle Me Elmo a few years ago, or
the Zhu Zhu pets this past holiday season. Kids saw these toys on TV and wanted them. Usually, you
sink a considerable sum of money in pull marketing because you must actively build a demand a
desire for the product, which generally takes a lot of advertising!

Pull: You create an online community associated with your online business. As more members join
and participate in the forum, they become involved with your website and your product/s. In this
way, interest is translated into buying, and buying into customer loyalty.

Pull: Start a blog for your business and consistently post good quality, well written and informative
articles relevant to your industry in some way. By delivering information that is of value to readers,
you attract attention to your business and products through people who read your blog.

Push: e Mail marketing is a prime example of push marketing. Sending out email newsletters and
emails telling subscribers about sales, specials, promotions, contests or other noteworthy
happenings on your website that might benefit the reader is a great way to use push marketing
without spending much money.

Push: Paid advertising such as pay Per Click and banner display ads is an example of push
marketing, although not inexpensive. You can use push and pull marketing to build and grow your
online business!

E-COMMERCE BUSINESS MODELS TO COMMUNICATE CUSTOMERS


A business model is a set of planned activities (business process) designed to result in a
profit in a marketplace.

A business plan is a document that describes a firm’s business model.

An e-commerce business model aims to use and leverage the unique qualities of the
Internet and web.

EIGHT KEY ELEMENTS OF A E-Commerce BUSINESS MODEL

If you hope to develop a successful business model in any arena, not just e-commerce, you
must make sure that the model effectively addresses the eight elements.
1. Customer Value Proposition

2. Revenue Model

3. Market Opportunity

4. Competitive Environment

5. Competitive Advantage

6. Market Strategy

7. Organizational Development

8. Management Team

1. CUSTOMER VALUE PROPOSITION(Why should customer buy from you?) A value


proposition defines how a company’s product or service fulfills the needs of customers. To
develop and analyze a firm’s a firm’s value proposition, you need to understand why
customers will choose to business with the firm instead of another company and what the
firm provides that other firms do not and cannot. From the consumer point of view,
successful e-commerce value propositions include

 Personalization of Products
 Customization of Products
 Reduction of Product Search Costs
 Reduction of Price Discovery Cost
 Facilitation of transactions by Managing Product Delivery
Examples: Pizzahut Value Proposition - delivery of Pizza within 17 and half min.
Fresh Direct Value Proposition (Convenience and save time) – Offering customers
the freshest food in New York, direct from the growers and manufacturers, at the
lowest price, delivered to their homes at day/night
Amazon Value Proposition – (Unparalleled Selection and Convenience) Amazon
makes it possible for book lovers to shop for virtually any book in print from the
comfort of their home or office, 24 hours a day and to know immediately whether a
book is in stock or not.
1. REVENUE MODEL (How will you earn money?) A firms revenue model describes
how the firm will earn revenue, generate profits and produce a superior return on
invested capital we use the terms revenue model and financial model
interchangeable.
The function of business organizations is both to generate profits and to produce
returns on invested capital that exceed alternative investments.
Profits alone are not sufficient to make a company successful. In order to be considered
successful, a firm must produce returns greater than alternative investments. Firms that
fail this test go out of existence.

Retailers, for example, sell a product, such as a personal computer, to a customer who pays
for the computer using cash or a credit card. This produces revenue. The merchants
typically charge more for the computer than it pays out in operating expenses, producing a profit.
Although there are many different e-commerce revenue models that have been developed,
most companies rely on one, or some combination, of the following major revenue models:

 Advertising Revenue Model


 Subscription Revenue Model
 Transaction Fee Revenue Model
 Sales Revenue Model
 Affiliate Revenue Model

Advertising Revenue Model: A Web site that offers its users content, services, and /or
products also provides a forum for advertisements and receives fees from advertisers.
Those web sites that are able to attract the greatest viewership or that have a highly
specialized and are able to retain user attention are able to charge higher advertising rates.
Yahoo, AOL, MSN for instance, derives a significant amount of revenue from search engine
and other forms of online advertising.

- Subscription Revenue Model: A website that offers its users content or services charges
a subscription fee for access to some or all of its offerings. Yahoo, for instance, has
broadened its business model to include a number of different types of premium
subscription services, such as yahoo! Real Time Quote, and Yahoo! Finance.

- Transaction Fee Revenue Model: A company receives a fee for enabling or executing a
transaction. For example, eBay provides an online auction marketplace and receives a
small transaction fee from a seller if the seller is successful in selling the item. E* Trade, an
online stockbroker, receives transaction fees each time it executes a stock transaction on
behalf of a customer.

- Sales Revenue Model: companies derive revenue by selling goods, information, or


services to customers. Companies such as amazon (which sells books, music, and other
products), LLBean.com, and Gap.com all have sales revenue models. Other examples are:
Dell.com, Acer.com, Sony.com, Freshdirect.com, Webvan.com etc.

- Affiliate Revenue Model: Sites that steer business to an “affiliate” receive a referral fee
or percentage of the revenue from any resulting sales. For example, Mypoints.com makes
money by connecting companies with potential customers by offering special deals to its
members. When they take advantage of an offer and make a purchase, members earn
“points” they can redeem for freebies, and MyPoints.com receives a fee. Community
feedback sites such as Opinions and About.com receive much of their revenue from steering
(guiding) potential customers to web sites where they make a purchase.

3. Market Opportunity (What marketspace do you intend to serve, and what is its size?)-
The term market opportunity refers to the company’s intended marketspace(i.e. an area of
actual or potential commercial value) and the overall potential financial/revenue
opportunities available to the firm in that marketspace. The market opportunity is usually
divided into smaller market niches(segments) The realistic market opportunity is defined
by the revenue potential in each of the market segments where you hope to compete. There
are further market niches within each of those major market segments, such as the Fortune
500 computer-based training market and the small business computer-based training
market. Because the firm is a startup firm, it cannot compete effectively in the large
business; computer based training market (about $15 billion.) Large brand-name training
firms dominate this niche(Segment). The Startup firm’s real market opportunity is to sell to
the thousands of small business firms who spend about $6 billion on computer-based
software training and who desperately need a cost-effective training solution. This is the
size of the firm’s realistic market opportunity.

4. COMPETITIVE ENVIRONMENT(Who else occupies your intended market space) A


firm’s competitive environment refers to the other companies selling similar products and
operating in the same market space. It also refers to the presence of substitute products
and potential new entrants to the market, as well as the power of customers and suppliers
over your business. The competitive environment for a company is influenced by several
factors:

 how many competitors are active


 how large their operations are
 competitor how profitable these firms are
 how they price their products
 the market share of each competitor
Firms typically have both direct and indirect competitors. Direct competitors are
those companies that sell products and services that are very similar and into the
same market segment. For example, Priceline and Travelociy, both of whom sell
discount airline tickets online, are direct competitors because both companies sell
identical products – cheap tickets. Indirect competitors are companies that may be
in different industries but still compete indirectly because their products can
substitute for one another. For instance, automobile manufacturers and airline
companies operate in different industries, but they still compete indirectly because
they offer consumers alternative means of transportation.
5. COMPETITIVE ADVANTAGE (What special advantages does your firm bring to the
marketplace?)

Firms achieve a competitive advantage when they can produce a superior product and / or
bring the product to market at a lower price than most, or all, of their competitors. Firms
also compete on scope (Regional/National/Global). Some firms can develop global market,
while other firms can only develop a national or regional market . Firms that can provide
superior products at lowest cost on a global basis are truly advantaged. Firms achieve competitive
advantages because they have somehow been able to obtain differential access to the
factors of production that are denied to their competitors – at least in the short term.
Perhaps the firm has been able to obtain very favorable terms from suppliers, shippers, or
sources of labor. Or perhaps the firm has more experienced, knowledgeable, and loyal
employees than any competitors. Maybe the firm has a patent on a product that others
cannot imitate, or access to investment capital through a network of former business
colleagues or a brand name and popular image that other firms cannot duplicate. An
asymmetry exists whenever one participant in a market has more resources – financial
backing, knowledge, information, and / or power – than other participants. Asymmetries
lead to some firms having an edge over others, permitting them to come to market with
better products, faster than competitors, and sometimes at lower cost. Some competitive
advantages are called “unfair.” An unfair competitive advantage occurs when one firm
develops an advantage based on a factor that other firms cannot purchase. For instance, a
brand name cannot be purchased and is in that sense an “unfair” advantage. Brands are
built upon loyalty, trust, reliability, and quality. Once obtained(brand) they are difficult to
copy or imitate, and they permit firms to charge premium prices for their products.

6. MARKET STRATEGY (How do you plan to promote your products or services to


attract your target audience?)

No matter how tremendous a firm’s qualities, its marketing strategy and execution are
often just as important. The best business concept, or idea, will fail if it is not properly
marketed to potential customers . Everything you do to promote your company’s products
and services to potential customers is known as marketing. Market strategy is the plan you
put together that details exactly how you intend to enter a new market and attract new
customers. Part of FreshDirect’s strategy , for instance, is to develop close supply chain
partnerships with growers and manufacturers so it purchases goods at lower prices
directly from the source . This helps FreshDirect lower its prices for consumers. By
partnering with suppliers that could benefit from FreshDirect’s access to consumers,
FreshDirect is attempting to extend its competitive advantage. Other companies, such as
Yahoo, have used a different marketing strategy. They invest heavily in advertising(on tv,
Newspaper etc.) to get the word out about their site. AOL used sampling of millions of free
cd-roms to attract new users. AOL enclosed cd with free trail offers in magazines and
newspapers across the country.

7. ORGANIZATIONAL DEVELOPMENT (What types of organizational structures


within the firm are necessary to Cary out the business plan)

Although any entrepreneurial ventures are started by one visionary individual, it is rare
that one person alone can grow an idea into a multi-million dollar company. In most cases,
fast-growth companies – especially e-commerce businesses – need employees and a set of
business procedures. In short, all firms–new ones in particular – need an organization to
efficiently implement their business plans and strategies. Many e-commerce firms and
many traditional firms who attempt an e-commerce strategy have failed because they
lacked the organizational structures and supportive cultural values required to support
new forms of commerce. Companies that hope to grow and succeed need to have a plan for
organizational development that describes how the company will organize the work that
needs to be accomplished. Typically, work is divided into functional departments, such as
production, shipping, marketing, customer support, and finance. Jobs within these
functional areas are defined, and then recruitment begins for specific job titles and
responsibilities. Typically, in the beginning, generalists who can perform multiple tasks are
hired. For instance, eBay founder Pierre Omidyar started an online auction site, according
to some sources, to help his friend trade PEZ dispensers with other collectors, but within a
few months the volume of business had far exceeded what he alone could handle. So he
began hiring people with more business experience to help out. Soon the company had
many employees, departments, and managers who were responsible for overseeing the
various aspects of the organization.

8. MANAGEMENT TEAM (What kinds of experiences and background are important


for the company’s leaders to have?)
The single most important element of a business model is the management team
responsible for making the model work. A strong management team gives a model
instant credibility to outside investors, market – specific knowledge, and experience in
implementing business plan. A strong management team may not be able to save a
weak business model, but the team should be able to change the model and redefine the
business as it becomes necessary. Eventually, most companies get to the point of having
several senior executives or managers.. The challenge is to find people who have both
the experience and the ability to apply that experience to new situations. To be able to
identify good managers for a business startup, first consider the kinds of experiences
that would be helpful to manager joining your company. What kind of technical
background is desirable? What kind of supervisory experience is necessary? How many
years in a particular function should be required?
MAJOR BUSINESS-TO-CONSUMER(B2C) BUSINESS MODELS

Business-to-consumer (B2C) e-commerce, in which online business seek to reach


individual consumers, is the most well-known and familiar type of e-commerce.

1. Portal
2. E-Tailers
3. Content Provider
4. Transaction Broker
5. Market Creator
6. Service Provider
7. Community Provider

1. PORTAL - Portals such as Yahoo, MSN/Windows Live , and AOL offer users powerful
web search tools as well as an integrated package of content and services, such as news,
email, instant messaging, calendars, shopping, music downloads, video streaming and
more, all in one place.

- portals sought to be viewed as “gateways” to the Internet. Today, however, the portal
business model is to be a destination site. They are marketed as places where consumers
will want to start their web searching and hopefully stay a long time to read news, find
entertainment, and meet other people.

- Portals do not sell anything directly. The market opportunity is very large.

- Portals generate revenue primarily by charging advertisers for ad placement, collecting


referral fees for steering customers to other sites and charging for premium services.

- portals are also Internet Service Providers (ISP’s) that provide access to the Internet and
the Web – add an additional revenue stream: monthly subscription fees for access.

2. E-Tailer - Online retail stores, often called e-tailers, come in all sizes, from giant Amazon
to tiny local stores that have web sites. E-tailers are similar to the typical bricks- and –
mortar storefront except that customers only have to connect to the Internet to check their
inventory and place an order. Some e-tailers, which are referred to as “bricks-and-clicks,”
are subsidiaries or divisions of existing physical stores and carry the same products.
JSPenney, Barnes & Noble, Wal-Mart, and Staples are four examples of companies with
complementary online stores. Others, however, operate only in the virtual(Click - and-
Click) world, without any ties to physical locations. Amazon, BlueNile.com, and
Drugstore.com are examples of this type of e-tailers. Several other variations of e-tailers –
such as online versions of direct mail catalogs, online malls, and manufacturerdirect online
sales also exist.
3. CONTENT PROVIDER - Although there are many different ways the internet can be
useful, “information content,” which can be defined broadly to include all forms of
intellectual property, is one of the largest types of internet usage. Intellectual property
refers to all forms of human expression that can be put into a tangible medium such as text,
CD’S or the web. Content Providers distribute information content, such as digital video,
music, photos, text, and artwork, over the web. Content providers make money by charging
a subscription fee. For instance in the case of WSJ.COM , Harvard Business Review, and
many others, charge customers for content downloads in addition to or in place of a
subscription fee. Micropayment systems technology provides content providers with a
cost-effective method for processing high volumes of very small monetary transactions
(anywhere from $.25 to $5.00 per transaction).

4. TRANSACTION BROKER - Sites that process transitions for consumers normally


handled in person, by phone, or by mail are transition brokers. The largest industries using
this model are financial services, travel services, and job placement services. The online
transaction broker’s primary value propositions are savings of money and time. In
addition, most transaction brokers provide timely information and opinions. Sites such as
Monster.com offer job searchers a national marketplace for their talents and employers a
national resource for that talent. Both employers and job seekers are attracted by the
convenience and currency of information. Online stock brokers charge commissions that
are considerably less than traditional brokers, with many offering substantial deals, such as
cash and a certain number of free trades, to lure new customers.

5. MARKET CREATOR - Market creators build a digital environment in which buyers and
sellers can meet, display products, search for products, and establish prices. A prime
example is Priceline, which allows consumers to set the price they are willing to pay for
various travel accommodations and other products (some times referred to as a reverse
auction) and eBay, the online auction site utilized by both businesses and consumers.

6. SERVICE PROVIDER - While e-tailers sell products online, service providers offer
services online. There’s been an explosion in online services that is often unrecognized.
Web 2.0 applications such as photo sharing, video sharing, and user-generated content (in
blogs and social networking sites ) are all services provided to customers. Service
providers use a variety of revenue models. Some charge a fee, or monthly subscriptions,
while others generate revenue from other sources, such as through advertising and by
collecting personal information that is useful in direct marketing.

Some services are free but are not complete. For instance, Google app basic edition is free,
but a “Premier” model with virtual conference rooms and advanced tools costs $50 per
employee a year. Much like retailers who trade products for cash, service, providers trade
knowledge, expertise, and capabilities, for revenue.
7. COMMUNITY PROVIDER - Community providers are sites that create a digital online
environment where people with similar interests can transact (buy and sell goods);
share interests, photos, videos; communicate with like-minded people; receive interest-
related information; and even play out fantasies by adopting online personalities called
avatars. The social networking sites myspace, facebook, friendster, and hundreds of
other smaller, niche sites such as doostang, twitter, and google buzz, all offer users
community building tools and services. Facebook is rapidly gaining on its rival MySpace
by encouraging users to build their own revenue producing applications that run on
their profiles and even take in advertising and affiliate revenues. Online communities
tend to reflect offline relationships when your friends say they have a profile on
Facebook and ask you to visit; you are encouraged to build your own online profile.
UNIT-3
MULTIMEDIA

Multimedia is more than one concurrent presentation medium (for example, on CD-ROM or
a Web site). Although still images are a different medium than text, multimedia is typically
used to mean the combination of text, sound, and/or motion video. Some people might say
that the addition of animated images (for example, animated GIF on the Web) produces
multimedia, but it has typically meant one of the following:

 Text and sound


 Text, sound, and still or animated graphic images
 Text, sound, and video images
 Video and sound
 Multiple display areas, images, or presentations presented concurrently
 In live situations, the use of a speaker or actors and "props" together with sound,
images, and motion video

Multimedia can arguably be distinguished from traditional motion pictures or movies both
by the scale of the production (multimedia is usually smaller and less expensive) and by the
possibility of audience interactivity or involvement (in which case, it is usually
called interactive multimedia). Interactive elements can include: voice command, mouse
manipulation, text entry, touch screen, video capture of the user, or live participation (in
live presentations).

Multimedia tends to imply sophistication (and relatively more expense) in both production
and presentation than simple text-and-images. Multimedia presentations are possible in
many contexts, including the Web, CD-ROMs, and live theater. A rule-of-thumb for the
minimum development cost of a packaged multimedia production with video for
commercial presentation (as at trade shows) is: $1,000 a minute of presentation time. Since
any Web site can be viewed as a multimedia presentation, however, any tool that helps
develop a site in multimedia form can be classed as multimedia software and the cost can
be less than for standard video productions.
MULTIMEDIA CONTENT FOR E-COMMERCE APPLICATIONS

Multimedia content can be considered both fuel and traffic for E-commerce applications.
The technical definition of Multimedia is the use of digital data in more than one format,
such as the combination of text, audio, video and graphics in a computer file/document. Its
purpose is to combine the interactivity of a user-friendly interface with multiple forms of
content. The success of E-commerce applications also depends on the variety and
innovativeness of multimedia content and packaging. E-commerce requires robust servers
to store and distribute large amounts of digital content to consumers. These multimedia
storage servers are large information warehouses capable of handling various content.
Theses servers must handle large-scale distribution, guarantee security and complete
reliability.

DIGITIZATION
Digitization is the process of converting information into a digital format . In this format,
information is organized into discrete units of data (called bit s) that can be separately
addressed (usually in multiple-bit groups called byte s). This is the binary data that
computers and many devices with computing capacity (such as digital camera s and digital
hearing aid s) can process.

Text and images can be digitized similarly: a scanner captures an image (which may be an
image of text) and converts it to an image file, such as a bitmap . An optical character
recognition ( OCR ) program analyzes a text image for light and dark areas in order to
identify each alphabetic letter or numeric digit, and converts each character into
an ASCII code.

Audio and video digitization uses one of many analog-to-digital conversion processes in
which a continuously variable ( analog ) signal is changed, without altering its essential
content, into a multi-level (digital) signal. The process of sampling measures
the amplitude (signal strength) of an analog waveform at evenly spaced time markers and
represents the samples as numerical values for input as digital data.

Digitizing information makes it easier to preserve, access, and share. For example, an
original historical document may only be accessible to people who visit its physical
location, but if the document content is digitized, it can be made available to people
worldwide. There is a growing trend towards digitization of historically and culturally
significant data.

Digitizing or digitization is the representation of an


object, image, sound, document or signal (usually an analog signal) by generating a series
of numbers that describe a discrete set of its points or samples. The result is
called digital representation or, more specifically, a digital image, for the object, and digital
form, for the signal. In modern practice, the digitized data is in the form of binary numbers,
which facilitate computer processing and other operations, but strictly speaking, digitizing
simply means the conversion of analog source material into a numerical format;
the decimal or any other number system can be used instead.
Digitization is of crucial importance to data processing, storage and transmission, because
it "allows information of all kinds in all formats to be carried with the same efficiency and
also intermingled". Unlike analog data, which typically suffers some loss of quality each
time it is copied or transmitted, digital data can, in theory, be propagated indefinitely with
absolutely no degradation. This is why it is a favored way of preserving information for
many organisations around the world.

Process
The term digitization is often used when diverse forms of information, such as text, sound,
image or voice, are converted into a single binary code. The core of the process is the
compromise between the capturing device and the player device so that the rendered
result represents the original source with the most possible fidelity, and the advantage of
digitization is the speed in which this form of information can be transmitted with no
degradation compared with analog information.
Digital information exists as one of two digits, either 0 or 1. These are known as bits (a
contraction of binary digits) and the sequences of 0s and 1s that constitute information are
called bytes.
Analog signals are continuously variable, both in the number of possible values of the
signal at a given time, as well as in the number of points in the signal in a given period of
time. However, digital signals are discrete in both of those respects – generally a finite
sequence of integers – therefore a digitization can, in practical terms, only ever be
an approximation of the signal it represents.
Digitization occurs in two parts:
Discretization
The reading of an analog signal A, and, at regular time intervals (frequency), sampling the
value of the signal at the point. Each such reading is called a sample and may be considered
to have infinite precision at this stage;
Quantization
Samples are rounded to a fixed set of numbers (such as integers), a process known
as quantization.
In general, these can occur at the same time, though they are conceptually distinct.
A series of digital integers can be transformed into an analog output that approximates the
original analog signal. Such a transformation is called a DA conversion. The sampling
rate and the number of bits used to represent the integers combine to determine how close
such an approximation to the analog signal a digitization will be.
DIGITAL VIDEO
Digital video is a representation of moving visual images in the form of encoded digital
data. This is in contrast to analog video, which represents moving visual images
with analog signals. Digital video comprises a series digital images displayed in rapid
succession. In contrast, one of the key analog video methods, motion picture film, uses a
series of photographs which are projected in rapid succession. Standard film stocks such
as 16 mm and 35 mm record at 24 frames per second. For video, there are two frame
rate standards: NTSC, at about 30 frames per second, and PAL at 25 frames per second.
Digital video was first introduced commercially in 1986 with the Sony D1 format, which
recorded an uncompressed standard definition component video signal in digital form
instead of the high-band analog forms that had been commonplace until then.
Digital video can be copied with no degradation in quality. In contrast, when analog sources
are copied, they experience generation loss. Digital video can also be stored on hard
disks or streamed over the Internet to end users who watch content on a desktop
computer screen or a digital smart TV. In everyday practice, digital video content such
as TV shows and movies also includes a digital audio soundtrack.

Digital video offers a number of advantages over analog video, including:

 Ease of sharing and storage.


 No degredation of data quality when copied.
 Easy and inexpensive copying.
 The capacity for multicasting.
Digital video technology can also incorporate analytical software for intelligent video, which
enables capabilities such as video search, object tracking and intrusion detection.
Information in the natural world, received through the five senses, is analog. That means
that it is infinitely variable. Digital A/V information, on the other hand, consists of discrete
units of data that are placed so close together that the human senses perceive them as a
continuous flow. Analog data, such as video recorded on tape, is transmitted as electronic
signals of varying frequency or amplitude that are added to carrier waves of a given
frequency. To make that information usable on a computer or a modern media
player, analog-to-digital conversion translates an analog signal to a series of zeroes and
ones, which represent, respectively, "negative" and "positive," "off" and "on," or "low" and
"high." The opposite action, digital-to-analog conversion, recreates the analog signal for
playback.
Unit-4
Electronic Payment Systems:
Definition: Electronic payment is a financial exchange that takes place online between buyers and
sellers. The content of this exchange is usually as encrypted credit card numbers, electronic
cheques or cash. The various factors that have had the financial intuitions to make use of electronic
payments are:

1. Decreased technology cost. Interest is becoming free almost everywhere in the world.

2. Reduced operational and proceeding cost.

3. Increasing online commerce.

Advantages:-

1. Privacy.

2. Integrity.

3. Compatibility.

4. Good transaction efficiency.

5. Acceptability.

6. Convenience.

7. Mobility.

8. Low financial risk.

9. Anonymity.

1) The greatest advantage of e-payments is the convenience. I.e. customer can pay on one from any
locations 24 hours day, 7 days a week.

2) E-payments have reduced the amount of time spent on bill management or payment by about
60%.

3) Compared to the cost of postage, check writing has any online payment can save the money.

4) E-payments are secure

Risks in Electronic payment systems:-

There are three major risks in the operation of the payment system, they are

1) Fraud or mistake.
2) Privacy issues.

3) Credit Risk.

1) Fraud or Mistake: All electronic payment systems need some ability to keep automatic records.
Once information has been captured electronically, it is easy and inexpensive to maintain. The need
for record keeping for purpose of risk management like fraud or any sort of mistake.

2) Privacy Issues:

The electronic payment system must ensure and maintain privacy. The privacy customers should
be protected as much as possible privacy must be maintained against unauthorized persons. For
any type of transaction trusted third-parties will be needed for all tenacity and good faith.

3) Managing Credit Risk:

Credit or systematic risk is a major concern in net settlement systems because a bank’s failure to
settle its net position could lead to a chain reaction of bank failures.

The various factors that have lead the financial institutions to make use of electronic payments are:

 Decreasing technology cost:


The technology used in the networks is decreasing day by day, which is evident
from the fact that computers are now dirt-cheap and Internet is becoming free
almost everywhere in the world.
 Reduced operational and processing cost:
Due to reduced technology cost the processing cost of various commerce activities
becomes very less. A very simple reason to prove this is the fact that in electronic
transactions we save both paper and time.
 Increasing online commerce:

The above two factors have lead many institutions to go online and many others are
following them.

We began E-Commerce with EDI, this was primarily for large business houses not for the
common man. Many new technologies, innovations have lead to use of E-Commerce for the
common man also. We will now briefly enumerate these innovations based on whom they
affected:

1. Affecting the consumers:

Credit cards, Debit Cards, ATMs (Automated Teller Machines), Stored value cards, E-
Banking.

2. Enabling online commerce:

Digital Cash, E-Cash, Smart cards (or Electronic Purse) and encrypted Credit cards.
3. Affecting Companies:

The payment mechanisms that a bank provides to a company have changed drastically. The
Company can now directly deposit money into its employee’s bank account. These
transfers are done through Automated Transfer Houses.

There are also many problems with the traditional payment systems that are leading to
its fade out. Some of them are enumerated below:

1. Lack of Convenience:

Traditional payment systems require the consumer to either send paper cheques by
snail-mail or require him/her to physically come over and sign papers before
performing a transaction. This may lead to annoying circumstances sometimes.

2. Lack of Security:

This is because the consumer has to send all confidential data on a paper, which is not
encrypted, that too by post where it may be read by anyone.

3. Lack of Coverage:

When we talk in terms of current businesses, they span many countries or states. These
business houses need faster transactions everywhere. This is not possible without the
bank having branch near all of the companies offices. This statement is self-explanatory.

4. Lack of Eligibility:

Not all potential buyers may have a bank account.

5. Lack of support for micro-transactions:

TYPES OF PAYMENT SYSTEM


Electronic payment systems are mainly used in banking, retail, health –care, online
markets, etc., Electronic payment system also called as Electronic Funds Transfer (EFT) It
is defined as “ any transfer of funds initiate through an electronic terminal telephonic
instrument or computer or authorize a financial institution to debit or credit an account”

EFT (Electronic Funds Transfer) can be categorized in to three types.

1) Banking & Financial payment.

2) Retailing payments.( Credit Cards & Debit Cards)

3) Online electronic payments.


E-cash, Electronic cheques, Smart Cards, Credit cards.

Electronic Cash ( E-cash)


E-cash is a new concept in on –line payment system because it combines computerized
convenience with security and privacy. E-cash presents some interesting characteristics
that should make it an attractive alternative for payment over the internet.

Properties of E-cash:

There are four properties of E-cash

: - Monetary Value

: - Interpretability

: - Irretrievability and security

E-cash must have a monetary value; it must be backed by cash, bank-authorized credit or a
bank certified cashier cheque. When e-cash created by one bank is accepted by other
others.

E-cash must be Interpretable i.e. this can be cleared in multiple banks, because multiple
banks are required with an international clearing house that handles the exchangeability
issues because all customers are not going to be using the same bank or even be in the
same country.

E-cash must be storable and retrievable from any place telephone or personal
communications device and with- draw from and deposit in to banking A/C. E-cash should
not be easy to copy, this includes preventing or detecting duplication.

Risk Involves in E-Cash are:

1) Time for electronic money is valid.

2) How much can be stored on and transferred by electronic money.

3) No. of transactions made during given period or time.

To make purchasing using E-cash:

1) Establishment of an account

2) Maintaining enough money in the a/c to make the purchase.

Working of E-cash:
E-cash is based on cryptographic systems called “Digital Signatures”. This method involves
a pair of numeric keys (Very large no’s)

- One for locking (enclosing)

- Another for unlocking (decoding)

- Encoding key is kept private and the decoding key is made public.

These digital signatures are very secured way for e-cash.

Electronic cash fulfills two main functions:

1) As a medium of exchange.

2) As a store of value.

Digital money is a perfect medium of exchange e-cash would be allowed to realize it’s
potential for bypassing the transaction costs of the foreign exchange marked.

Operational Risks:

1)The time over which given electronic money is valid.

2) How much can be stored on and transferred by electronic money.

3) The n.o of such transactions that can be made during a given period or time.

Legal Issues:

Electronic cash will force bankers and regulators to make touch choices that will shape the
form of lawful commercial activity related to electronic commerce.

1. The consumers acquire an OTPP account numbers by filling our registration form. This
will give the OTPP a customer information profile.

2. To purchase in on-line the consumer requests the form the merchant by quoting OTPP
account number.

3. The merchant contacts with OTPP payment server with the customer’s account n.o

4. The OTPP payment server verifies the customer’s account number for the vendor and
check for stuffiest funds.

5. The OTPP payment server sends an electronic message to the buyer. The buyer
responds to this message in one of three ways. Yes I agree to pay; No; I will not pay;
6. If the OTPP payment servers get a yes from the customer, the merchant is informed and
the customer is allowed to download the material immediately.

7. The OTPP will not debit the buyer’s account until if receives conformation of purchase
completion.

E-Commerce or Electronics Commerce sites use electronic payment where electronic


payment refers to paperless monetary transactions. Electronic payment has
revolutionized the business processing by reducing paper work, transaction costs, labour
cost. Being user friendly and less time consuming than manual processing, helps business
organization to expand its market reach / expansion. Some of the modes of electronic
payments are following.

 Credit Card
 Debit Card
 Smart Card
 E-Money
 Electronic Fund Transfer (EFT)
CREDIT CARD
Payment using credit card is one of most common mode of electronic payment. Credit card
is small plastic card with a unique number attached with an account. It has also a magnetic
strip embedded in it which is used to read credit card via card readers. When a customer
purchases a product via credit card, credit card issuer bank pays on behalf of the customer
and customer has a certain time period after which he/she can pay the credit card bill. It is
usually credit card monthly payment cycle. Following are the actors in the credit card
system.

 The card holder - Customer


 The merchant - seller of product who can accept credit card payments.
 The card issuer bank - card holder's bank
 The acquirer bank - the merchant's bank
 The card brand - for example , visa or mastercard.
Credit card payment process
Step Description

Step 1 Bank issues and activates a credit card to customer on his/her request.

Step 2 Customer presents credit card information to merchant site or to merchant from whom
he/she want to purchase a product/service.

Step 3 Merchant validates customer's identity by asking for approval from card brand company.

Step 4 Card brand company authenticates the credit card and paid the transaction by credit.
Merchant keeps the sales slip.

Step 5 Merchant submits the sales slip to acquirer banks and gets the service chargers paid to
him/her.

Step 6 Acquirer bank requests the card brand company to clear the credit amount and gets the
payment.

Step 6 Now card brand company asks to clear amount from the issuer bank and amount gets
transferred to card brand company.

DEBIT CARD
Debit card, like credit card is a small plastic card with a unique number mapped with the
bank account number. It is required to have a bank account before getting a debit card
from the bank. The major difference between debit card and credit card is that in case of
payment through debit card, amount gets deducted from card's bank account immidiately
and there should be sufficient balance in bank account for the transaction to get
completed. Whereas in case of credit card there is no such compulsion.

Debit cards free customer to carry cash, cheques and even merchants accepts debit card
more readily. Having restriction on amount being in bank account also helps customer to
keep a check on his/her spendings.
SMART CARD
Smart card is again similar to credit card and debit card in apperance but it has a small
microprocessor chip embedded in it. It has the capacity to store customer work
related/personal information. Smart card is also used to store money which is reduced as
per usage.

Smart card can be accessed only using a PIN of customer. Smart cards are secure as they
stores information in encrypted format and are less expensive/provides faster
processing.Mondex and Visa Cash cards are examples of smart cards.

E-MONEY
E-Money transactions refers to situation where payment is done over the network and
amount gets transferred from one financial body to another financial body without any
involvement of a middleman. E-money transactions are faster, convenient and saves a lot
of time.

Online payments done via credit card, debit card or smart card are examples of e-money
transactions. Another popular example is e-cash. In case of e-cash, both customer and
merchant both have to sign up with the bank or company issuing e-cash.

Electronic Fund Transfer


It is a very popular electronic payment method to transfer money from one bank account
to another bank account. Accounts can be in same bank or different bank. Fund transfer
can be done using ATM (Automated Teller Machine) or using computer.

Now a day, internet based EFT is getting popularity. In this case, customer uses website
provided by the bank. Customer logins to the bank's website and registers another bank
account. He/she then places a request to transfer certain amount to that account.
Customer's bank transfers amount to other account if it is in same bank otherwise transfer
request is forwarded to ACH (Automated Clearing House) to transfer amount to other
account and amount is deducted from customer's account. Once amount is transferred to
other account, customer is notified of the fund transfer by the bank.

CURRENCY SERVER

Currency Server was designed to be the most advanced currency-enabling component on


the market. It provides exchange rate information and currency internationalization,
conversion and rounding services via COM, .NET and SOAP Web services, and Ajax-style
scripting. Currency Server supports more clients, more platforms, and a larger number of
independent providers of exchange rate data than other tools.

By working locally rather than relying on remote servers for each transaction, Currency
Server provides a unique level of performance, reliability and independence. The service is
always available to satisfy thousands of information and conversion requests per second.
Support for a variety of data providers (both free and subscription-based) and advanced
administration notification options assure fault tolerance and peace of mind.

When the software is implemented on a web server, visitors can see prices in their
"language" without having to use third-party sites for currency-related services and
without being subject to external pop-ups, frames, advertising and cookies. Currency
Server is one of the fastest and most cost-effective tools to add value to an e-commerce site.
Either alone or as part of a complete internationalization effort, Currency Server can easily
plug into an existing system and open up a new world of opportunities and user
experience.

APPLICATIONS

Possible applications include:

 E-commerce - Integration with web or commerce server to create a dual-currency


or multi-currency shopping site (customers see prices in currency of their choice)
 Back-office - Interfacing with database, accounting, procurement, expense
management, spreadsheets, etc.
 Information - Web-based currency converters, widgets, popups, or maintenance of
exchange rate data files (e.g. to post exchange rates in XML, CSV or HTML format, or
for custom clients)
 Web services - Use as a .NET or SOAP server to provide web services to remote
clients

ELECTRONIC CHEQUES

The electronic cheques are modeled on paper checks, except that they are initiated
electronically. They use digital signatures for signing and endorsing and require the use of
digital certificates to authenticate the payer, the payer’s bank and bank account. They are
delivered either by direct transmission using telephone lines or by public networks such as
the Internet.

A form of payment made via the internet that is designed to perform the same function as a
conventional paper cheque. Because the cheque is in an electronic format, it can be
processed in fewer steps and has more security features than a standard paper cheque.
Security features provided by electronic cheque include authentication, public key
cryptography, digital signatures and encryption, among others.

BENEFITS OF ELECTRONIC CHEQUES:

 Well suited for clearing micro payments. Conventional cryptography of e-cheques


makes them easier to process than systems based on public key cryptography (like
digital cash).
 They can serve corporate markets. Firms can use them in more cost-effective
manner.
 They create float and the availability of float is an important requirement of
Commerce.

ELECTRONIC CHEQUES PROCESS:

 The e-Cheque is compatible with interactive web transactions or with email and
does not depend on real-time interactions or on third party authorizations. It is
designed to work with paper cheque practices and systems, with minimum impact
on payers, payees, banks and the financial system.

 Payers and payees can be individuals, businesses, or financial institutions such as


banks. E- Cheques are transferred directly from the payer to the payee, so that the
timing and the purpose of the payment are clear to the payee

 The payer writes an e-Cheque by structuring an electronic document with the


information legally required to be in a cheque and digitally signs it.

 The payee receives the e-Cheque over email or web, verifies the payer's digital
signature, writes out a deposit and digitally signs it.

 The payee's bank verifies the payer's and payee's digital signatures, and then
forwards the cheque for clearing and settlement

 The payer's bank verifies the payer's digital signature and debits the payer's
account

PAYER PROCESS
 In order to send a cheque, the client simply fills out a standard e-cheque. The system
allows clients to define common payees in order to speed the e-cheque creation
process.
 When the cheque has been written it can be easily transferred from the payer to the
payee over a secure e-cheque channel.
 This secure channel will be established between the payer and the payee before the
transaction begins.
 The e-cheque is automatically signed by the user using his private key based on RSA
algorithm and SHA-128; this ensures the authenticity and the integrity of the e-
cheque

PAYEE PROCESS
 When the payee receives the e-cheque he can open and view it using the e-cheque
system.
 In order to deposit the cheque, the payee simply connects to the bank (which is
expected to provide e-cheque services) and uploads the e-cheque to his bank
account.
 Once the bank receives the e-cheque, it will decrypt it using the e-cheque system.
 After clearing (i.e. verifying both the cheque signature and account balance) with
the payer’s bank, the payee’s account will be credited accordingly.

BENEFITS OF E-CHEQUE

TO CUSTOMERS
 No physical movement of cheques so no fear of loss of cheque in transit.
 Quicker clearance; within 3-4 working days.
 Its more secured than physical cheques.
 Decrease errors and fraud. eCheques reduce the potential for errors and fraud
because fewer people handle them.
 They can serve corporate markets. Firms can use them in more cost-effective
manner

Benefits to Bank

 Reduce the risk associated with paper clearing

 Superior verification and reconciliation process

 No geographical restrictions

 No physical movement of cheques- it saves cost and time for banks.

 No chance of cheque dishonor- The risk is taken care of by the accounting server,
which will guarantee that the cheque would be honoured.

 Well suited for clearing micro payments

 Reduce processing costs by up to 60%. E-cheques require less manpower to


process and don’t come with any deposit or transaction fees. As a result,
processing an e-cheque is generally much cheaper than processing a paper check
or credit card transaction.

DRAWBACKS

 Customer education

 Chances of misuse, hacking etc

 Need a different infrastructure

 Unauthorized transactions becomes challenge for banks

 Problem could be when there is more than one signer or endorser.

 Transactions based on internet- network failure may lead to delay in payment.

 Both payer and payee should have e-cheque facility.

ELECTRONIC PURSE

a plastic card with a smallamount of money storedelectronically on it, which can be used
instead of cash to payfor things:
A smart card becomes an electronicpurse when money is credited to the card via
an electronic reader.

An electronic purse is the store of value on a card, which can be used in a manner similar to
cash to pay for travel or for other small-scale transactions. The electronic “purse” is secure
information stored in a dedicated area or file in the smart-card.

Two different main objectives are identified for electronic purse:

 Replace cash in the public transport payment system, either to move from a
primarily cash-based system or as an alternative for the residual cash payments
in a system that is largely pre-paid.
o Retain the single tariff as the fundamental fare product; this may be an
alternative or replacement for time-based tickets.
There are different concepts for electronic purse, which centre on the nature of the value.
The main types are:

 Tokens.The purse consists of units that have no monetary value. The units can be
equivalent to individual journeys, or to money units. When the card is presented
for travel, the number of units required for the applicable fare is deducted.
Eventually, when all of the units have been deducted, the card is no longer usable
for travel.
 Transport money. The purse consists of units equivalent to money, but it can only be
used for passenger transport fares. Depending on the context, this could include
multiple modes, park and ride, and car parking. Although presented to the user in
terms of cash equivalent, it does not have any monetary validity outside the
immediate transport environment.
 Transport and micro-purchases. The purse contains units equivalent to money. The
primary usage is for payment of passenger transport services. The value can also
be used for small purchases at non-transport locations, e.g. kiosks and vending
machines. There is likely to be a modest upper limit on the value that can be
loaded to the card at any given time.
 eCash. The purse contains electronic money, which has full monetary value, is usable
at any outlet with an accepting device, and is at any time exchangeable for cash.
Transport may be just one of a number of items where the eCash can be used, and
might not even be the main usage. The eCash is subject to banking regulations,
and would have to be issued and underwritten by a bank.
Depending on the configuration desired by the transit agencies, a printed ticket may be
issued. The details of the most recent transaction are usually stored on the smart-card,
whether or not a ticket is issued. .

The value is placed on the card in one of three ways:

 Preloaded on to the card (in the same manner as telephone cards), without
possibility to add further value. The intention is that the card is discarded when
the value is expired.
 Added to the card at the time the card is issued, or when the e-purse application is
added to an existing card.
 Additional value added to an existing ePurse (“top-up”).
Public transport agencies frequently offer incentives to customers to use electronic purse.
The three main incentive types are:

A lower tariff is applied to tickets purchased with electronic purse compared to


tickets purchased with cash (may be presented as a discount for e-purse or a
surcharge for paying cash).
 Free or reduced-rate transfers are available when paying with electronic purse, but
cash customers are not entitled to free transfers and must pay for each boarding
separately.
 ‘Fare capping’, where the trips are paid for individually, but subject to a maximum
amount deducted during a day or week. This may be equivalent to the price of a
daily or weekly pass.
 Tapered fares, where discounts are given to frequent travelers. When more than a
specified number of trips are made in a given period, the subsequent trips are
discounted.
Benefits of electronic purse are:
 The customer pays only for the travel made.

 Incentivessuch as free transfers, discounts and fare-capping can be offered to the


customer in a secure and consistent way.
 Cash handling is reduced as customers migrate to prepaid tickets.

 Electronic purse can be offered for infrequent customers when it is desired to


eliminate all cash transactions.
 Innovative means of adding/renewing value can be utilized.

 High degree of security.


 Third parties can become involved in issuing value.
Cautions with regard to electronic purse are:
 Technical complexity, which requires a substantial level of technical competence
within the organization.
 Needfor a high level of electronic security, and the capacity and commitment to
managing this security correctly.
 The higher the value of the scheme, and the more places the electronic purse can be
used, the more likely the regulations applying to banks and deposit-taking
institutions will become applicable to the scheme.
 Loss of corporate focus can occur when the transport agencies become overly
interested in the ancillary uses for the electronic purse, to the detriment of the
core purpose – which is the payment of transit fares.
UNIT-5

Security is an essential part of any transaction that takes place over the internet.
Customer will loose his/her faith in e-business if its security is compromised. Following
are the essential requirments for safe e-payments/transactions −

 Confidential − Information should not be accessible to unauthorized person. It


should not be intercepted during transmission.

 Integrity − Information should not be altered during its transmission over the
network.

 Availability − Information should be available wherever and whenever


requirement within time limit specified.

 Authenticity − There should be a mechanism to authenticate user before giving


him/her access to required information.

 Non-Repudiabiity − It is protection against denial of order or denial of payment.


Once a sender sends a message, the sender should not able to deny sending the
message. Similary the receipient of message should not be able to deny receipt.

 Encryption − Information should be encrypted and decrypted only by authorized


user.

 Auditability − Data should be recorded in such a way that it can be audited for
integrity requirements.

Below are some of the biggest and most current threats to e-commerce, divided into
2 categories: deliberate acts and human error.

Deliberate Acts
1. Fraud-- E-commerce websites are vulnerable to fraud from external and internal
sources. These incidents include credit card fraud, anything being entered into the
system by rogue employees, hackers, trojan horses, etc.
2. Security-- These issues relate to internal business networks and interface between
transactions done by the customer and the network. Hackers can gain access to
internal systems via their e-commerce website.
3. Viruses-- Malicious software and computer viruses are two of the biggest
threats. Viruses are normally from external sources and can corrupt files on website
if introduced into the internal network. Viruses can completely destroy a computer
system and disrupt the operations of the website. Trojan Horse is a malicious
software that has the ability to capture the clients information, before any encryption
software can take effect. They can also impersonate a customer and pass over bad
and malicious codes into the server running the website.
Human Error
1. Poor management-- One of the greatest threats to an e-commerce is poor
management. When the management is not committed to ensuring security and does
not support budgets for purchase of anti-virus software licenses, that keep internal
networks robust will cause pose a big security threat. The lack of proper an anti-
virus, makes the e-commerce vulnerable to viral attacks. Management should commit
to regular IT security audits of the e-commerce website to ensure that security is
optimized and all potential problems are dealt with as soon as they occur.
2. Untrained employees-- When employees are not trained properly to use their
company's website they can make very easy but costly mistakes. Accidently putting in
a customers information in the system wrong, clicking on something that contains a
virus they are unaware of, or not keeping their sytems up to date are just some
accidental errors untrained employees can do which can compromise the system.

Measures to ensure Security


Major security measures are following −

 Encryption − It is a very effective and practical way to safeguard the data being
transmitted over the network. Sender of the information encrypt the data using a
secret code and specified receiver only can decrypt the data using the same or
different secret code.

 Digital Signature − Digital signature ensures the authenticity of the information. A


digital signature is a e-signature authentic authenticated through encryption and
password.

 Security Certificates − Security certificate is unique digital id used to verify


identity of an individual website or user.

Security Protocols in Internet


Following are the popular protocols used over the internet which ensures security of
transactions made over the internet.
Secure Socket Layer (SSL)
It is the most commonly used protocol and is widely used across the industry. It meets
following security requirements −

 Authentication
 Encryption
 Integrity
 Non-reputability
"https://" is to be used for HTTP urls with SSL, where as "http:/" is to be used for HTTP
urls without SSL.

Secure Hypertext Transfer Protocol (SHTTP)


SHTTP extends the HTTP internet protocol with public key encryption, authentication and
digital signature over the internet. Secure HTTP supports multiple security mechanism
providing security to end users. SHTTP works by negotiating encryption scheme types
used between client and server.

Secure Electronic Transaction


It is a secure protocol developed by MasterCard and Visa in collaboration. Thereoritically,
it is the best security protocol. It has following components −

 Card Holder's Digital Wallet Software − Digital Wallet allows card holder to make
secure purchases online via point and click interface.

 Merchant Software − This software helps merchants to communicate with


potential customers and financial institutions in secure manner.

 Payment Gateway Server Software − Payment gateway provides automatic and


standard payment process. It supports the process for merchant's certificate
request.

 Certificate Authority Software − This software is used by financial institutions to


issue digital certificates to card holders and merchants and to enable them to
register their account agreements for secure electronic commerce.