Chapter -06

Electronic Commerce

Source: http://mashable.com/2012/11/26/twitter-black-friday/

Source: http://www.sunwebcare.com/servicesweb-development/e-commerce-solutions/

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6.1 Introduction to Electronic Commerce.

Electronic commerce, commonly known as e-commerce, is the buying and selling of
product or service over electronic systems such as the Internet and other computer
networks. Electronic commerce draws on such technologies as electronic funds transfer,
supply chain management, Internet marketing, online transaction processing, electronic
data interchange (EDI), inventory management systems, and automated data collection
systems. Modern electronic commerce typically uses the World Wide Web at least at one
point in the transaction's life-cycle, although it may encompass a wider range of
technologies such as e-mail, mobile devices and telephones as well.
E-commerce is an entire online process of developing, marketing, selling, delivering,
servicing, and paying for products and services transacted on internetworked, global
marketplaces of customers, with the support of a worldwide network of business
partners.1
E-commerce

Source: http://www.luutaa.com/solutions/e-commerce-systems

Many Bangladeshi companies currently distribute their images through the Internet to
clients all over the world, but the monetary transactions take place through conventional
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means. Some companies put messages on bulletin board, on ' internet yellow pages' with
email links, and sometimes web pages, but there never is a place to submit a credit card.
This is because currently the government does not permit credit card charges over the
internet. However, the ISPs in Bangladesh do have the technology for e-commerce, and
are anticipating governmental approval within the next year.
E-commerce sites needed too be hooked up to a merchant bank account. A merchant
bank account allows a company to accept and process credit card transactions. All
businesses that use electronic credit cards need to be hooked up to their merchant
account. For example, in a grocery store, when one swipes a card through the card swipe
machine, machine is hooked up to the grocery store's merchant account.

6.2 Define e-commerce. What are the B2B, B2C, C2C e-commerce? Explain.
Electronic commerce encompasses the entire online process of developing, marketing,
selling, delivering, servicing, and paying for products and services. The Internet and
related technologies and E-commerce web sites on the World Wide Web serve as the
technology and business platform for E-commerce among internet worked communities
of customers and businesses, including the use of Internet technologies to improve and
integrate the supply chain relationships and process among business partners.

<figure 2.1 Trends in B2C and B2B E-commerce, and the business strategies and value driving these
trends>

a) Business -to Business (B2B) E-Commerce. This category of electronic commerce

involves both electronic business marketplaces and direct market links between
businesses. For example, amy companies offer secure Internet or extra net E-commerce
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web sites for their business customers and suppliers. Others may rely on electronic data
interchange (EDI) via the Internet or extranets for computer-to computer exchanges of Ecommerce documents with their larger business customers and suppliers. Also very
important are B2B E-commerce portals that provide auction and exchange markets for
businesses.
b) Business-to Consumer (B2C) E-Commerce. In this form of electronic commerce,
businesses must develop attractive electronic marketplaces to entice and sell products and
services to consumers. For example, many companies offer E-commerce web sites that
provide virtual storefronts and multimedia catalogs, interactive order processing, secure
electronic payment systems, and online customer support.
c) Consumer-to -Consumer (C2C) E-Commerce. The huge success of online auctions
like e-Bay, where consumers (as well as businesses) can buy and sell with each other in
an auction process at an auction web site, makes this E-commerce model an important Ecommerce business strategy. Thus, participating in or sponsoring consumer or business
auctions is an important E-commerce alternative for B2C or B2B E-Commerce.
Electronic personal advertising of products or services to buy or sell by consumers at
electronic newspaper sites, consumer E-Commerce portals, or personal web sites is also
an important form of C2C E-commerce.

Source: http://iis100.tripod.com/s11.htm

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6.3 Define e-commerce. Write importance of e-commerce in business.

E-commerce is an entire online process of developing, marketing, selling, delivering,
servicing, and paying for products and services transacted on internet worked, global
marketplaces of customers, with the support of a worldwide network of business partners
E-commerce has been involved in developing high traffic solutions which are PCI
compliant and engineered for running profitable online stores.

The PCI Security Standards Council is an open global forum for the ongoing
development, enhancement, storage, dissemination and implementation of security
standards for account data protection.
E-Commerce solutions cannot run alone. It needs marketing strategy to drive traffic, and
then with traffic it needs proper UI/UX for user to find, compare, and review the product
easily and finally a very smooth checkout to process payments. Sounds so simple but
requires a lot more efforts to make it convert.

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Ecommerce (or electric commerce) refers to the buying and selling of goods and services
via electronic channels, primarily the Internet. Online retail is decidedly convenient due
to its 24-hour availability, global reach and generally efficient customer service.
Electronic commerce is generally considered to be the sales aspect of e-business. It also
consists of the exchange of data to facilitate the financing and payment aspects of
business transactions.
E-commerce can be divided into:

E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes

gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts and social
media
Electronic Data Interchange (EDI), the business-to-business exchange of data
E-mail and fax and their use as media for reaching prospects and established
customers (for example, with newsletters)
Business-to-business buying and selling
The security of business transactions

Sun web-care specializes in ecommerce web design, online stores and shopping carts and
has designed many successful e-commerce websites that are all running custom shopping
carts to automate the purchase of products online. We offer full online e-commerce
gateways that make it possible for sales to go smoothly from online purchase to direct
deposits into your business account.
Although we can create a custom online store to meet your needs, we have provided a
short list of some of the most popular e-commerce
features below.
Some of the key features our online stores provide:

Unlimited products and categories

Thumbnail and full size product display
Advanced search options
Shipping prices and tax calculated in order
Ability to add/edit/delete products
Email notifications

Sun web-care specializes in ecommerce web design,

online stores and shopping carts and has designed
many successful e-commerce websites that are all
running custom shopping carts to automate the purchase of products online. We offer full
online e-commerce gateways that make it possible for sales to go smoothly from online
purchase to direct deposits into your business account.
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E-Commerce is generally thought of as the ability for a website to accept and process
credit cards in exchange for goods or services. ECommerce is also sometimes thought of
as conducting business over the Web. In the more traditional sense, e-commerce deals
with both accepting and processing credit cards where e-commerce software lists prices
for products or services, includes a shopping cart and the ability to accept personal
information and credit card information.
The actual processing of the credit card is done by a merchant account that hooks into the
site owner's bank account for the money to be deposited. The combination of the
shopping cart software and the merchant account make up an e-commerce enabled
website.

6.4 What is the future of e-Commerce in Bangladesh? Explain.

E-commerce is an entire online process of developing, marketing, selling, delivering,
servicing, and paying for products and services transacted on internet worked, global
marketplaces of customers, with the support of a worldwide network of business partners
Competitive advantages determine whether a company can move forward. E-commerce
is the right tool for gaining competitive advantage nowadays. Business now goes online.
Some restrict the definition of e-commerce only to internet enabled transactions while
some others defined broadly saying not only internet rather telecommunication and
telecommunication based tools are also involved in ecommerce activities. In Bangladesh
perspective, the broader definition is accepted to all.
Like traditional commerce, e-commerce does not involved only in buying and selling of
goods and services rather includes inter-company and intra-company functions like
negotiations and transactions, manufacturing and marketing etc. using email, Electronic
Data Interchange (EDI), fax, file transfer, video conferencing etc. Depending on the
involvement with electronic means, a company can be either a complete or partial ecommerce user. Usually e-commerce is done in four forms: Business to Business (B2B),
Business to Consumer (B2C), Consumer to Business (C2B) and Consumer to consumer
(C2C). However, Business to Government (B2G) transaction may also exist.
In the year 1997, private Internet Service Providers (ISP) launched Internet in
Bangladesh. Since then, the infrastructural development in the sector of
telecommunication has helped spread the Internet network around the country. Right now
more than 6.5 million people are using Internet in the country with the help of around 200
registered ISPs and dial-up services and the cost of using Internet is low. The increasing
number of user of Internet creates more opportunity of e-commerce in the recent years.
In order to cope with the present world, almost all of the financial organizations and
international businesses in Bangladesh enter in the information highway through hosting
website. Banks and other financial organizations have started online transactions like
fund transfer, payment etc.
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6.5 What is online Banking (or Internet banking or E-banking)? Explain.

Online banking (or Internet banking or E-banking) allows customers of a financial
institution to conduct financial transactions on a secure website operated by the
institution, which can be a retail or virtual bank, credit union or building society.
To access a financial institution's online banking facility, a customer having personal
Internet access must register with the institution for the service, and set up some
password (under various names) for customer verification. The password for online
banking is normally not the same as for telephone banking. Financial institutions now
routinely allocate customer numbers (also under various names), whether or not
customers intend to access their online banking facility. Customer numbers are normally
not the same as account numbers, because a number of accounts can be linked to the one
customer number. The customer will link to the customer number any of those accounts
which the customer controls, which may be cheque, savings, loan, credit card and other
accounts. Customer numbers will also not be the same as any debit or credit card issued
by the financial institution to the customer.
To access online banking, the customer would go to the financial institution's website,
and enter the online banking facility using the customer number and password. Some
financial institutions have set up additional security steps for access, but there is no
consistency to the approach adopted. Online banking facilities offered by various
financial institutions have many features and capabilities in common, but also have some
that are application specific.
The common features fall broadly into several categories:A bank customer can perform some non-transactional tasks through online banking,
including

viewing account balances

viewing recent transactions
downloading bank statements, for example in PDF format
viewing images of paid cheques
ordering cheque books
download periodic account statements
Downloading applications for M-banking, E-banking etc.

Bank customers can transact banking tasks through online banking, including

Funds transfers between the customer's linked accounts

Paying third parties, including bill payments (see, e.g., BPAY) and
telegraphic/wire transfers
Investment purchase or sale
Loan applications and transactions, such as repayments of enrollments
Register utility billers and make bill payments
Financial institution administration
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Management of multiple users having varying levels of authority

Transaction approval process
the process of banking has become much faster

6.6 Define Electronic Fund Transfer (EFT) Systems. Explain.

Electronic funds transfer (EFT) is the electronic exchange, transfer of money from one
account to another, either within a single financial institution or across multiple
institutions, through internet and computer-based systems.

The term covers a number of different concepts:

Wire transfer via an international banking network

Cardholder-initiated transactions, using a payment card such as a credit or
debit card
Direct deposit payment initiated by the payer
Direct debit payments, sometimes called electronic checks, for which a
business debits the consumer's bank accounts for payment for goods or
services
Electronic bill payment in online banking, which may be delivered by EFT
or paper check
Transactions involving stored value of electronic money, possibly in a
private currency
Electronic Benefit Transfer

6.7 What is E-commerce Payment System? Explain.

An Electronic commerce payment system facilitates the acceptance of electronic payment
for online transactions. Also known as a sample of Electronic Data Interchange (EDI), ecommerce payment systems have become increasingly popular due to the widespread use
of the internet-based shopping and banking.

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Over the years, credit cards have become one of the most common forms of payment for
e-commerce transactions. In North America almost 90% of online B2C 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.

O Brien, James A.(2004). Management Information Systems, New delhi:Tata McGraw-Hill Publication
Co. Ltd.p.218

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