e-commerce (electronic commerce or EC)

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E-commerce (electronic commerce or EC) is the buying and selling of goods and se
rvices, or the transmitting of funds or data, over an electronic network, primar
ily the internet. These business transactions occur either as business-to-busine
ss, business-to-consumer, consumer-to-consumer or consumer-to-business. The term
s e-commerce and e-business are often used interchangeably. The term e-tail is a
lso sometimes used in reference to transactional processes for online shopping.
History of e-commerce
The beginnings of e-commerce can be traced to the 1960s, when businesses started
using Electronic Data Interchange (EDI) to share business documents with other
companies. In 1979, the American National Standards Institute developed ASC X12
as a universal standard for businesses to share documents through electronic net
works. After the number of individual users sharing electronic documents with ea
ch other grew in the 1980s, in the 1990s the rise of eBay and Amazon revolutioni
zed the e-commerce industry. Consumers can now purchase endless amounts of items
online, both from typical brick and mortar stores with e-commerce capabilities
and one another.
E-commerce applications
E-commerce is conducted using a variety of applications, such as email, online c
atalogs and shopping carts, EDI, File Transfer Protocol, and web services. This
includes business-to-business activities and outreach such as using email for un
solicited ads (usually viewed as spam) to consumers and other business prospects
, as well as to send out e-newsletters to subscribers. More companies now try to
entice consumers directly online, using tools such as digital coupons, social m
edia marketing and targeted advertisements.
The benefits of e-commerce include its around-the-clock availability, the speed
of access, the wide availability of goods and services for the consumer, easy ac
cessibility, and international reach. Its perceived downsides include sometimes-
limited customer service, consumers not being able to see or touch a product pri
or to purchase, and the necessitated wait time for product shipping.
The e-commerce market continues to grow: Online sales accounted for more than a
third of total U.S. retail sales growth in 2015, according to data from the U.S.
Commerce Department. Web sales totaled $341.7 billion in 2015, a 14.6% increase
over 2014. E-commerce conducted using mobile devices and social media is on the
rise as well: Internet Retailer reported that mobile accounted for 30% of all U
.S. e-commerce activities in 2015. And according to Invesp, 5% of all online spe
nding was via social commerce in 2015, with Facebook, Pinterest and Twitter prov
iding the most referrals.
The rise of e-commerce forces IT personnel to move beyond infrastructure design
and maintenance and consider numerous customer-facing aspects such as consumer d
ata privacy and security. When developing IT systems and applications to accommo
date e-commerce activities, data governance related regulatory compliance mandat
es, personally identifiable information privacy rules and information protection
protocols must be considered.
Government regulations for e-commerce
In the United States, the Federal Trade Commission (FTC) and the Payment Card In
dustry (PCI) Security Standards Council are among the primary agencies that regu
late e-commerce activities. The FTC monitors activities such as online advertisi
ng, content marketing and customer privacy, while the PCI Council develops stand
ards and rules including PCI-DSS compliance that outlines procedures for proper
handling and storage of consumers' financial data.
To ensure the security, privacy and effectiveness of e-commerce, businesses shou
ld authenticate business transactions, control access to resources such as webpa
ges for registered or selected users, encrypt communications and implement secur
ity technologies such as the Secure Sockets Layer and two factor authentication.