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||

›|
‡ E-Commerce or Electronic Commerce refers to
carrying out commercial transactions
electronically.
‡ It involves buying and selling of products and
services and exchange of information over
communication networks.
‡ It includes paperless exchange of business
information, electronic mail, electronic bulletin
boards, electronic fund transfer etc
 |
||
›|
‡ Basically there are three models of e-
Commerce, namely, Business to
Business, Business to Customer, and
Internal procurement
 ° °
‡ It is concerned with carrying out
transactions between two or more
business firms.
‡ Majority of e-Commerce transactions are
B2B transactions.
‡ Transactions between producer and
distributors, Wholesaler and retailers,
manufacturer and component suppliers
are examples of B2B model
 °

‡ It is concerned carrying transactions
between business and customers and vice
versa.
‡ The individual customers browse for
products, identify the products and their
suppliers, give online orders, receive the
products through courier and make
payment electronically or otherwise.

°
‡ consumer requests a specific service from the
business.
‡ Example: Harry is planning a holiday in Darwin.
He requires a flight in the first week of December
and is only willing to pay $250. Harry places a
submission with in a web based C2B facility.
Dodgy Brothers Airways accesses the facility
and sees Harry's submission. Due to it being a
slow period, the airline offers Harry a return fare
for $250



‡ These sites are usually some form of an
auction site. The consumer lists items for
sale with a commercial auction site. Other
consumers access the site and place bids
on the items. The site then provides a
connection between the seller and buyer
to complete the transaction. The site
provider usually charges a transaction
cost. In reality this site should be call
C2B2C
 ›|



|

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‡ The core of any e-Commerce transaction is
Electronic Data Interchange (EDI).
‡ It is the exchange of structured business
information between applications among trading
partners by agreed message standards through
electronic means.
‡ It is the transmission of business information and
or documents such as purchase orders, invoices
and remittance advices in standard formats
 The Roots of E-Commerce ±
E-Commerce History
‡ EDI
± Uses private communications networks
(VANs) to transmit standardized transaction
data
‡ Automating transactions using EDI
± Drastically reduced the amount of paperwork
and the need for human intervention
‡ Internet
± Provided the ideal platform for conducting EDI
transactions
 Transaction Processing
‡ Transaction
± An exchange involving goods or services s
‡ Transaction processing system (TPS)
± Information system used to support and
record transactions
‡ Batch processing
± Transactions are collected over time and
processed together in batches
‡ Online transaction processing
± Takes place at the point of sale
 The Transaction Processing
Cycle
‡ Data collection
± The process of capturing transaction related
data
‡ Data editing
± Checking the validity of data entered
‡ Data correction
± Implemented if an error is found in the
entered data
‡ Data manipulation
± Processing transaction data
‡ Data storage
 Different Transaction
Processing for Different Needs
‡ Order processing system
± Supports the sales of goods or services to
customers
± Arranges for shipment of products
‡ Purchasing system
± Supports the purchase of goods and raw
materials from suppliers
 Major E-Commerce Mechanisms

‡ ã is a competitive process in which

either a seller solicits bids from buyers or a
buyer solicits bids from sellers.
‡ 
 are auctions that
sellers use as a channel to many potential
buyers.
‡ || |
 one buyer, usually an
organization, wants to buy a product or
service.
 Major E-Commerce Mechanisms
(Continued)

‡ u|
| is a Web site on the
internet representing a single store.
‡ u|

|
|  is a
collection of individual shops under one Internet
address.
‡ u|
||
| || is a
central, virtual market space on the Web where
many buyers and many sellers can conduct
electronic commerce and electronic business
activities.
 u

 
ã
‡ Under this method the EDI is executed
through a third party service provider that
receives, stores and transmits data, called
Value Added Network.
 u

 |


‡ Under this method the trading partners will
be allowed access to EDI messages
contained in an FTP server through a login
with password
 u

|
|

||
‡ In this case Internet mail is used as a
means for transmitting EDI message. The
EDI messages arrive via the Internet in a
particular mailbox under the domain
names of each individual trading partner.
Appropriate filtering softwares process the
EDI messages and issue auto responses.
 ¢|

||
‡ In this case A Web site acts as the electronic
market place. It is basically a B2C model.
‡ The sellers advertise on the website and the
customers can search and place orders.
‡ The websites in turn are connected to
manufacturers/ warehouses who receive the
orders in EDI mode.
‡ The goods are delivered through courier and
payment is received electronically.
 ›|

||
‡ ›|

||
 ||
refers to e-commerce that is
conducted in a wireless environment.
i.e. using cell phone to shop over the
Internet
 :|
: |
| |
The basic softwares required for e-Commerce are,
‡ Wallet
‡ merchant system
‡ payment gateway
‡ and certificate authority.
 :|
: |
| |
The basic softwares required for e-
Commerce are:-,
‡ Wallet
‡ merchant system
‡ payment gateway
‡ certificate authority
 ¢|
‡ It is basically a client site application. It
helps the customer to make payments.
Wallet provides payment instruments such
as credit cards, digital cash, electronic
cheques etc for securely storing and
retrieving private payment information.
 ›|
: |
‡ It is a collection of software products that
defines the processes to be followed by a
merchant who is interested in doing retail
business on the Internet. The software
offers services such as displaying the
products, answering queries related to the
products, dealing customers orders etc
 |
!|
‡ A gateway is a mechanism for providing
access to another system. A payment
Gateway acts as an interface between
traditional banking network and electronic
cash transactions

||
ã
‡ A Certificate Authority is a third party trust
maintainer. Its purpose is to issue digital
certificates for usage in e-Commerce
transactions. It forms a bridge between the
parties to an e-Commerce transaction.
The digital certificates are issued with
digital signatures
 Š.4 Electronic Payments
‡ u|
|
 | enable you
to pay for goods and services
electronically.
‡ u|
| (| | ) are similar
to paper checks and are used mostly in
B2B.
‡ u|
|
 allow customers
to charge online payments to their credit
card account.
 Electronic Payments (Continued)
‡  
 are the B2B equivalent of
electronic credit cards and are typically used for
unplanned B2B purchases.
‡ u|
 
± :| |
|
 allow you to store a fixed
amount of prepaid money and then spend it as
necessary.
± :
 contain a chip called a microprocessor
that can store a considerable amount of information
and are multipurpose ± can be used as a debit card,
credit card or a stored-value money card.
 Electronic Payments (Continued)
‡ |   | 
| are a form
of e-cash that enables two individuals or
an individual and a business to transfer
funds without using a credit card.
 E-Commerce Implementation
‡ Implementing e-commerce
± Requires large investment and expertise
‡ E-Commerce host
± Business that takes responsibility for setting
up and maintaining an e-commerce system
 Infrastructure
‡ E-Commerce requires significant
infrastructure changes
‡ B2C e-commerce
± Often connects manufacturers directly with
consumers, cutting out the middleman
± Requires shipping individual products directly
to consumers
 Hardware and Networking
‡ Underestimating the amount of Web traffic
± Leads to network stalls and long wait times
‡ Typical e-commerce Web site
± Employs one or more server computers and a
high-speed Internet connection
‡ Outsourcing to a Web hosting company
± Can operate 24 hours a day, 7 days a week
 Software
‡ Web Server Software
± Responds to requests for Web pages
‡ Web Server Utility Programs
± Provide statistical information about server
usage and Web site traffic patterns
‡ E-Commerce Software
± Supports e-commerce activities
± Includes catalog management, electronic
shopping cart, and payment software
 Software (continued)
‡ Web Site Design Tools
± What see what you-get (WYSIWYG)
applications or wizards
‡ Graphics Applications
± Design and create graphic elements of Web
sites
‡ Web Site Development Tools
± Application programming interfaces (API¶s)
‡ Allow software engineers to develop Web-driven
programs
 Software (continued)
‡ Web services
± Programs that automate tasks by
communicating with each other over the Web
± Systems developers can provide tools for
automating trivial or repetitive tasks
± Important in transaction processing
 Building Traffic
‡ The 3Cs Approach
± Content, community, and commerce
‡ Keywords and Search Engines
± Choose name and product names that best
describe business purpose and features
± Select descriptive domain names
± Business-related keywords can be listed in
the HTML meta tag
 Building Traffic (continued)
‡ Marketing
± Online advertising methods include banner
ads, pop-up ads, and e-mail
± Offline advertising methods include
magazines, newspapers, radio, and television

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‡ In spite of the numerous advantages,
there are certain issues.These issues are
classified in to four categories on the basis
of the parties affected such as:
‡
 |
‡ ° | |
‡
 | 


‡ 

||

|
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 |
‡ The consumers are concerned about lack
of privacy and confidentiality, lack of
security, wrong transactions, and
expensive infrastructure

|
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 | |
‡ The major issues that concern businesses
are, difficulty in the integration of existing
systems with the new system, non
availability of human resources and
security of networks (Hacking, Computer
viruses etc)

|
|||

 |
‡ The two major issues of concern to the
industries are the management of change
and multi cultural implications
 Issues perceived by nations,
governments and international
community

± | 
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±  |
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± |
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± "
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±
 
± |
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||

|


  | 
 Legal Issues Specific to E-
commerce
‡ 

|

|| i.e. stocks,
investments, business opportunities,
auctions.
‡ 
|
problems with
competition.
‡
|  refers to the practice of
registering domain names solely for the
purpose of selling them later at a higher
price.
 Legal Issues Specific to E-
commerce (Continued)
‡ "|

|
|| when and where
(and in some cases whether) electronic
sellers should pay business license taxes,
franchise fees, gross-receipts taxes,
excise taxes, «etc.
‡
 
protecting intellectual property
in e-commerce and enforcing copyright
laws is extremely difficult.
°||

 
|


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 °||

° |
‡ Inexpensive way of increasing sales
‡ New market opportunities by expanding
customer base
‡ More service to customers
‡ Better advertisement
‡ Direct relationship with customers
‡ Reduction in operating cost
 °||


 |
‡ Convenience in terms of always open
stores
‡ Expanded market pace
‡ Lower prices
‡ Browse, compare price and purchase on
their own terms
  

|
‡ Payment system risks like, risk of default,
malfunctions of the operation, misappropriation
of electronically transferred funds
‡ Theft of intellectual property, trade secrets, and
other confidential information
‡ Computer frauds and Hacking
‡ Transmission of computer virus
‡ Infringement of copyrights, trade marks and
patents
‡ Computer piracy
‡ Misleading advertisements
‡ Lack of effective regulatory mechanism
 :|


Trust based security Nothing special for protection

Security Through Hiding of files and data

Obscurity
Password Schemes Restricting Access
Biometric Systems Finger print, Palm print, Retinal
Patterns, Signature verification

Firewalls Placing a device ± a computer,

or a router ±
Data Encryption Mutation of information in any
form