E-commerce

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the
transmitting of funds or data, over an electronic network, primarily the Internet. These business
transactions occur either business-to-business, business-to-consumer, consumer-to-consumer or
consumer-to-business. The terms e-commerce and e-business are often used interchangeably. The
term e-tail is also sometimes used in reference to transactional processes around online retail.
History of ecommerce
One of the most popular activities on the Web is shopping. It has much allure in it you can
shop at your leisure, anytime, and in your pajamas. Literally anyone can have their pages built to
display their specific goods and services.
History of ecommerce dates back to the invention of the very old notion of "sell and buy",
electricity, cables, computers, modems, and the Internet. Ecommerce became possible in 1991
when the Internet was opened to commercial use. Since that date thousands of businesses have
taken up residence at web sites.
At first, the term ecommerce meant the process of execution of commercial transactions
electronically with the help of the leading technologies such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT) which gave an opportunity for users to exchange
business information and do electronic transactions. The ability to use these technologies
appeared in the late 1970s and allowed business companies and organizations to send
commercial documentation electronically.
Although the Internet began to advance in popularity among the general public in 1994, it took
approximately four years to develop the security protocols (for example, HTTP) and DSL which
allowed rapid access and a persistent connection to the Internet. In 2000 a great number of
business companies in the United States and Western Europe represented their services in the
World Wide Web. At this time the meaning of the word ecommerce was changed. People began
to define the term ecommerce as the process of purchasing of available goods and services over
the Internet using secure connections and electronic payment services. Although the dot-com

collapse in 2000 led to unfortunate results and many of ecommerce companies disappeared, the
"brick and mortar" retailers recognized the advantages of electronic commerce and began to add
such capabilities to their web sites (e.g., after the online grocery store Webvan came to ruin, two
supermarket chains, Albertsons and Safeway, began to use ecommerce to enable their customers
to buy groceries online). By the end of 2001, the largest form of ecommerce, Business-toBusiness (B2B) model, had around $700 billion in transactions.
According to all available data, ecommerce sales continued to grow in the next few years and, by
the end of 2007, ecommerce sales accounted for 3.4 percent of total sales.
Ecommerce has a great deal of advantages over "brick and mortar" stores and mail order
catalogs. Consumers can easily search through a large database of products and services. They
can see actual prices, build an order over several days and email it as a "wish list" hoping that
someone will pay for their selected goods. Customers can compare prices with a click of the
mouse and buy the selected product at best prices.
Online vendors, in their turn, also get distinct advantages. The web and its search engines
provide a way to be found by customers without expensive advertising campaign. Even small
online shops can reach global markets. Web technology also allows to track customer preferences
and to deliver individually-tailored marketing.
History of ecommerce is unthinkable without Amazon and Ebay which were among the first
Internet companies to allow electronic transactions. Thanks to their founders we now have a
handsome ecommerce sector and enjoy the buying and selling advantages of the Internet.
Currently there are 5 largest and most famous worldwide Internet retailers: Amazon, Dell,
Staples, Office Depot and Hewlett Packard. According to statistics, the most popular categories
of products sold in the World Wide Web are music, books, computers, office supplies and other
consumer electronics.

Amazon.com, Inc. is one of the most famous ecommerce companies and is located in Seattle,
Washington (USA). It was founded in 1994 by Jeff Bezos and was one of the first American
ecommerce companies to sell products over the Internet. After the dot-com collapse Amazon lost
its position as a successful business model, however, in 2003 the company made its first annual
profit which was the first step to the further development.
At the outset Amazon.com was considered as an online bookstore, but in time it extended a
variety of goods by adding electronics, software, DVDs, video games, music CDs, MP3s,
apparel, footwear, health products, etc. The original name of the company was Cadabra.com, but
shortly after it become popular in the Internet Bezos decided to rename his business "Amazon"
after the world's most voluminous river. In 1999 Jeff Bezos was entitled as the Person of the Year
by Time Magazine in recognition of the company's success. Although the company's main
headquarters is located in the USA, WA, Amazon has set up separate websites in other
economically developed countries such as the United Kingdom, Canada, France, Germany,
Japan, and China. The company supports and operates retail web sites for many famous
businesses, including Marks & Spencer, Lacoste, the NBA, Bebe Stores, Target, etc.
Amazon is one of the first ecommerce businesses to establish an affiliate marketing program, and
nowadays the company gets about 40% of its sales from affiliates and third party sellers who list
and sell goods on the web site. In 2008 Amazon penetrated into the cinema and is currently
sponsoring the film "The Stolen Child" with 20th Century Fox.
According to the research conducted in 2008, the domain Amazon.com attracted about 615
million customers every year. The most popular feature of the web site is the review system, i.e.
the ability for visitors to submit their reviews and rate any product on a rating scale from one to
five stars. Amazon.com is also well-known for its clear and user-friendly advanced search
facility which enables visitors to search for keywords in the full text of many books in the
database.

One more company which has contributed much to the process of ecommerce development is
Dell Inc., an American company located in Texas, which stands third in computer sales within
the industry behind Hewlett-Packard and Acer.
Launched in 1994 as a static page, Dell.com has made rapid strides, and by the end of 1997 was
the first company to record a million dollars in online sales. The company's unique strategy of
selling goods over the World Wide Web with no retail outlets and no middlemen has been
admired by a lot of customers and imitated by a great number of ecommerce businesses. The key
factor of Dell's success is that Dell.com enables customers to choose and to control, i.e. visitors
can browse the site and assemble PCs piece by piece choosing each single component based on
their budget and requirements. According to statistics, approximately half of the company's profit
comes from the web site.
In 2007, Fortune magazine ranked Dell as the 34th-largest company in the Fortune 500 list and
8th on its annual Top 20 list of the most successful and admired companies in the USA in
recognition of the company's business model.
History of ecommerce is a history of a new, virtual world which is evolving according to the
customer advantage. It is a world which we are all building together brick by brick, laying a
secure foundation for the future generations.
APPLICATIONS OF E-COMMERCE:
The applications of E-commerce are used in various business areas such as retail and wholesale
and manufacturing. The most common E-commerce applications are as follows:
Retail and wholesale:
E-commerce has a number of applications in retail and wholesale. E-retailing or on-line retailing
is the selling of goods from Business-to-Consumer through electronic stores that are designed
using the electronic catalog and shopping cart model. Cybermall is a single Website that offers
different products and services at one Internet location. It attracts the customer and the seller into
one virtual space through a Web browser.
Marketing:

Data collection about customer behavior, preferences, needs and buying patterns is possible
through Web and E-commerce. This helps marketing activities such as price fixation,
negotiation, product feature enhancement and relationship with the customer.
Finance:
Financial companies are using E-commerce to a large extent. Customers can check the balances
of their savings and loan accounts, transfer money to their other account and pay their bill
through on-line banking or E-banking. Another application of E-commerce is on-line stock
trading. Many Websites provide access to news, charts, information about company profile and
analyst rating on the stocks.
Manufacturing:
E-commerce is also used in the supply chain operations of a company. Some companies form an
electronic exchange by providing together buy and sell goods, trade market information and run
back office information such as inventory control. This speeds up the flow of raw material and
finished goods among the members of the business community. Various issues related to the
strategic and competitive issues limit the implementation of the business models. Companies
may not trust their competitors and may fear that they will lose trade secrets if they participate in
mass electronic exchanges.
Auctions:
Customer-to-Customer E-commerce is direct selling of goods and services among customers. It
also includes electronic auctions that involve bidding. Bidding is a special type of auction that
allows prospective buyers to bid for an item. For example, airline companies give the customer
an opportunity to quote the price for a seat on a specific route on the specified date and time.

Types of e-commerce:
There are 6 basic types of e-commerce:
Business-to-Business (B2B)
Business-to-Consumer (B2C)
Consumer-to-Consumer (C2C)
Consumer-to-Business (C2B).
Business-to-Administration (B2A)
Consumer-to-Administration (C2A)
1. Business-to-Business (B2B)
Business-to-Business (B2B) e-commerce encompasses all electronic transactions of goods or
services conducted between companies. Producers and traditional commerce wholesalers
typically operate with this type of electronic commerce.
2. Business-to-Consumer (B2C)
The Business-to-Consumer type of e-commerce is distinguished by the establishment of
electronic business relationships between businesses and final consumers. It corresponds to the
retail section of e-commerce, where traditional retail trade normally operates.
These types of relationships can be easier and more dynamic, but also more sporadic or
discontinued. This type of commerce has developed greatly, due to the advent of the web, and
there are already many virtual stores and malls on the Internet, which sell all kinds of consumer
goods, such as computers, software, books, shoes, cars, food, financial products, digital
publications, etc.
When compared to buying retail in traditional commerce, the consumer usually has more
information available in terms of informative content and there is also a widespread idea that
youll be buying cheaper, without jeopardizing an equally personalized customer service, as well
as ensuring quick processing and delivery of your order.

3. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce encompasses all electronic transactions of
goods or services conducted between consumers. Generally, these transactions are conducted
through a third party, which provides the online platform where the transactions are actually
carried out.
4. Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of exchanging goods. This type of ecommerce is very common in crowdsourcing based projects. A large number of individuals make
their services or products available for purchase for companies seeking precisely these types of
services or products.
Examples of such practices are the sites where designers present several proposals for a company
logo and where only one of them is selected and effectively purchased. Another platform that is
very common in this type of commerce are the markets that sell royalty-free photographs,
images, media and design elements, such as iStockphoto.
5. Business-to-Administration (B2A)
This part of e-commerce encompasses all transactions conducted online between companies and
public administration. This is an area that involves a large amount and a variety of services,
particularly in areas such as fiscal, social security, employment, legal documents and registers,
etc. These types of services have increased considerably in recent years with investments made
in e-government.
6. Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all electronic transactions conducted
between individuals and public administration.

Examples of applications include:

Education disseminating information, distance learning, etc.
Social Security through the distribution of information, making payments, etc.
Taxes filing tax returns, payments, etc.
Health appointments, information about illnesses, payment of health services, etc.
Both models involving Public Administration (B2A and C2A) are strongly associated to the idea
of efficiency and easy usability of the services provided to citizens by the government, with the
support of information and communication technologies.
World Wide Web
World Wide Web (WWW or W3), collection of globally distributed text and multimedia
documents and files and other network services linked in such a way as to create an immense
electronic library from which information can be retrieved quickly by intuitive searches. The
Web represents the application of hypertext technology and a graphical interface to the Internet
to retrieve information that is contained in specially formatted documents that may reside in the
same computer or be distributed across many computers around the world. It consists of three
main elements. The Hypertext Markup Language (HTML) comprises the programming codes, or
tags, that define fonts, layouts, embedded graphics, and links (hyperlinks) to other documents
accessible via the Web. The HyperText Transfer Protocol (HTTP) defines a set of standards for
transmitting Web pages across the Internet. The Uniform Resource Locator (URL) is a
standardized naming convention for identifying a Web document, image, or other file by its
location, in a sense the address of a file. The result is called the Web because it is made up of
many sites, all linked together, with users traveling from one site to the next by clicking a
computer's pointing device on a hyperlink.
Web sites, also called Web pages, are really Internet sites that all use the same techniques and
HTML tags to create multimedia documents with hypertext links. Each Web page can contain
many screens or printed pages of text, graphics, audio, and even video, and the starting point for

any Web site is called its home page. Although each page is an Internet site, it must be accessed
via a special program called a Web browser, which can translate the HTML into the graphical
images, text, and hypertext links intended by the creator of the page.
Interactive television is a generic term that encompasses a variety of Web-related television
technologies and products. Typically, a home television receiver and a telephone line are
connected through a small appliance that accesses the Internet through the telephone line and
converts the downloaded Web pages into a form that can be displayed on the receiver. A remote
control interface allows the user to navigate through the Web and select the information to be
displayed.
Ted Nelson, an American computer consultant, had promoted the idea of linking documents via
hypertext during the 1960s, but the technology required was not to be available for another 20
years. The foundation of what we now think of as the Web originated with work done on the
retrieval of information from distributed systems by Tim Berners-Lee at CERN during the 1980s.
This culminated in the introduction of a text-only interface, or browser, to the scientific
community in 1990 and to the public in 1991. Because of the difficulty of using this version,
acceptance outside the scientific and academic communities was slow. Marc Andreessen, an
undergraduate student working at the National Center for Supercomputing Applications (NCSA),
developed a graphical browser for the Web, introducing a UNIX version in 1993. Versions for
the Windows and Macintosh operating systems followed in 1994, and acceptance of the World
Wide Web blossomed quickly. In the late 1990s the development of improved browsers with
greater multimedia functionality, security, and privacy, as well as more powerful search engines
capable of indexing the ever greater information on the Web, led to the commercialization of the
Internet (see e-commerce).
Threat
In computer security a threat is a possible danger that might exploit a vulnerability to breach
security and therefore cause possible harm.
A threat can be either "intentional" (i.e. hacking: an individual cracker or a criminal
organization) or "accidental" (e.g. the possibility of a computer malfunctioning, or the possibility

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

capability, action, or event.
hreats can be classified according to their type and origin:[2]
Type of threat

Physical damage

fire

water

pollution

natural events

climatic

seismic

volcanic

loss of essential services

electrical power

air conditioning

telecommunication

compromise of information

eavesdropping,

theft of media

retrieval of discarded materials

technical failures

equipment

software

capacity saturation

compromise of functions

error in use

abuse of rights

denial of actions

Origin

Deliberate: aiming at information asset

spying

illegal processing of data

accidental

equipment failure

software failure

environmental

natural event

loss of power supply

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

E-commerce payment system

An e-commerce payment system facilitates the acceptance of electronic payment for online
transactions. Also known as a sample of Electronic Data Interchange (EDI), e-commerce
payment systems have become increasingly popular due to the widespread use of the internetbased shopping and banking.
Over the years, credit cards have become one of the most common forms of payment for ecommerce transactions. In North America almost 90% of online retail transactions were made
with this payment type. Turban et al. goes on to explain that it would be difficult for an online
retailer to operate without supporting credit and debit cards due to their widespread use.
Increased security measures include use of the card verification number (CVN) which detects
fraud by comparing the verification number printed on the signature strip on the back of the card
with the information on file with the cardholder's issuing bank. Also online merchants have to
comply with stringent rules stipulated by the credit and debit card issuers (Visa and MasterCard)
this means that merchants must have security protocol and procedures in place to ensure
transactions are more secure. This can also include having a certificate from an authorized

certification authority (CA) who provides PKI (Public-Key infrastructure) for securing credit and
debit card transactions.
Despite widespread use in North America, there are still a large number of countries such as
China, India and Pakistan that have some problems to overcome in regard to credit card security.
In the meantime, the use of smartcards has become extremely popular. A Smartcard is similar to
a credit card; however it contains an embedded 8-bit microprocessor and uses electronic cash
which transfers from the consumers card to the sellers device. A popular smartcard initiative is
the VISA Smartcard. Using the VISA Smartcard you can transfer electronic cash to your card
from your bank account, and you can then use your card at various retailers and on the internet.
There are companies that enable financial transactions to transpire over the internet, such as
PayPal. Many of the mediaries permit consumers to establish an account quickly, and to transfer
funds into their on-line accounts from a traditional bank account (typically via ACH
transactions), and vice versa, after verification of the consumer's identity and authority to access
such bank accounts. Also, the larger mediaries further allow transactions to and from credit card
accounts, although such credit card transactions are usually assessed a fee (either to the recipient
or the sender) to recoup the transaction fees charged to the mediary.
The speed and simplicity with which cyber-mediary accounts can be established and used have
contributed to their widespread use, although the risk of abuse, theft and other problemswith
disgruntled users frequently accusing the mediaries themselves of wrongful behavioris
associated with them.
Contents
1

Methods of Online Payment

1.1

Net banking

1.2

PayPal

1.3

Google Wallet

1.4

Mobile Money Wallets

1.5

Bitcoin

See also

Further reading

References