Electronic Commerce

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Electronic commerce, commonly known as e-commerce or ecommerce, is a type of industry
where the buying and selling of products or services is conducted over electronic systems such as
the Internet and other computer networks. Electronic commerce draws on technologies such
as mobile commerce, 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 orld ide eb 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, social media, and
telephones as well.
E"commerce can be divided into#
• E"tailing or $virtual storefronts$ on websites with online catalogs, sometimes gathered
into a $virtual mall$
• %uying or &elling on various websites and'or online marketplaces
• (he gathering and use of demographic data through eb contacts and social media
• Electronic Data Interchange (EDI), the business"to"business e)change of data
• E"mail and fa) and their use as media for reaching prospective and established customers
(for e)ample, with newsletters)
• %usiness"to"business buying and selling
• (he security of business transactions.
(ypes of e"commerce
(he ma*or different types of e"commerce are#
• Business-to-Business (B2B):
%+% e"commerce is simply defined as e"commerce between companies. (his is the type of e"
commerce that deals with relationships between and among businesses. ,bout -./ of e"
commerce is of this type, and most e)perts predict that %+% e"commerce will continue to grow
faster than the %+0 segment. (he %+% market has two primary components# e"frastructure and e"
• Business-to-Consumer (B2C):
%usiness"to"consumer e"commerce, or commerce between companies and consumers, involves
customers gathering information1 purchasing physical goods (i.e., tangibles such as books or
consumer products) or information goods (or goods of electronic material or digiti2ed content,
such as software, or e"books)1 and, for information goods, receiving products over an electronic
network. It is the second largest and the earliest form of e"commerce.
• Business-to-Government (B2G):
%usiness"to"government e"commerce or %+3 is generally defined as commerce between
companies and the public sector. It refers to the use of the Internet for public procurement,
licensing procedures, and other government"related operations. (his kind of e"commerce has two
features# first, the public sector assumes a pilot'leading role in establishing e"commerce1 and
second, it is assumed that the public sector has the greatest need for making its procurement
system more effective. eb"based purchasing policies increase the transparency of the
procurement process (and reduce the risk of irregularities). (o date, however, the si2e of the %+3
e"commerce market as a component of total e"commerce is insignificant, as government e"
procurement systems remain undeveloped.
• Consumer-to-Consumer (C2C):
0onsumer"to"consumer e"commerce or 0+0 is simply commerce between private individuals or
consumers. (his type of e"commerce is characteri2ed by the growth of electronic marketplaces
and online auctions, particularly in vertical industries where firms'businesses can bid for what
they want from among multiple suppliers. It perhaps has the greatest potential for developing
new markets.
• Mobile Commerce (m-commerce):
M"commerce (mobile commerce) is the buying and selling of goods and services through
wireless technology"i.e., handheld devices such as cellular telephones and personal digital
assistants (4D,s). 5apan is seen as a global leader in m"commerce. ,s content delivery over
wireless devices becomes faster, more secure, and scalable, some believe that m"commerce will
surpass wire line e"commerce as the method of choice for digital commerce transactions. (his
may well be true for the ,sia"4acific where there are more mobile phone users than there are
Internet users.
E"3overnance is the application of Information and 0ommunication (echnology (I0()
for delivering government services, e)change of information communication
transactions, integration of various stand"alone systems and services between
3overnment"to"0iti2ens (3+0), 3overnment"to"%usiness (3+%), and 3overnment"to"
3overnment (3+3) as well as back office processes and interactions within the entire
government frame work.
E payment is a subset of an e"commerce transaction to include electronic payment for
buying and selling goods or services offered through the Internet. 3enerally we think of
electronic payments as referring to online transactions on the internet, there are actually
many forms of electronic payments.
Types of E Payment
The following types of electronic payments are most common today. That
said, it is important to realize that new payment types are continual being
discovered and there are additional methods that exist or are being developed
Credit cards, debit cards and prepaid cards currently represent the most
common form of electronic payments. For all 3 types of cards the consumer or
the business most often uses a plastic card, commonly with a magnetic stripe.
The cardholder gives his or her card or card number to a merchant who
swipes the card through a terminal or enters the data to a PC. The terminal
transmits data to his or her ban, the ac!uirer. The ac!uirer transmits the data
through a card association to the card issuer who maes a decision on the
transaction and relays it bac to the merchant, who gives goods or services to
the cardholder. Funds flow later for settlement with credit cards and are
debited immediately for debit or pre"paid cards.
#long with magnetic stripe cards, smart cards are and will increasingly be
used for payments. $mart cards are at present overwhelmingly plastic credit
cards with an embedded computer chip. %ntil recently, many smart cards
operated using proprietary rather than common standards. # standard set of
specifications, &'(, has been developed and is being used increasingly so
that the chips on smart cards are interoperable. )orea and *apan are among
the most advanced countries in #sia for smart card payments, with 'alaysia
catching up fast due to government mandates for bans to issue smart cards.
'ost credit and debit cards are expected to be issued or reissued as smart
cards by +,,- or earlier.
.ver time, the chip for payment can be expected to move onto other devices.
# /smart card0 might then become the computer chip in a phone, P1# or other
device that can perform the same function as chip in a plastic card, eliminating
the need for the actual plastic card. $mart cards could thus evolve into /smart
phones0, /smart P1#s0 or other /smart0 devices.
.nline payments involve the customer transferring money or maing a
purchase online via the internet. Consumers and businesses can transfer
money to third parties from the ban or other account, and they can also use
credit, debit and prepaid cards to mae purchases online.
Current estimates are that over -,2 of payments for online purchases are
made using a credit card or debit card. #t present, most online transactions
involve payment with a credit card. 3hile other forms of payment such as
direct debits to accounts or pre"paid accounts and cards are increasing, they
currently represent a less developed transaction methodology.
Mobile Payments
'obile phones are currently used for a limited number of electronic
transactions. 4owever, the percentage seems liely to increase as mobile
phone manufacturers enable the chip and software in the phone for easier
electronic commerce.
Consumers can use their mobile phone to pay for transactions in several
ways. Consumers may send an $'$ message, transmit a P56 number, use
3#P to mae online payments, or perform other segments of their transaction
with the phone. #s phones develop further, consumers are liely to be able to
use infrared, 7luetooth and other means more fre!uently to transmit full
account data in order to mae payments securely and easily from their phone.
#dditionally, merchants can obtain an authorization for a credit or debit card
transaction by attaching a device to their mobile phone. # consortium in the
%$ also recently announced Power$wipe, for example, which physically
connects to a 6extel phone, weighs 3.8 ounces, and incorporates a magnetic
stripe reader, infrared printing port, and pass"through connector for charging
the handset battery.
Financial Service Kiosks
Companies and service providers in several countries, including $ingapore
and the %$, have set up ioss to enable financial and non"financial
transactions. These ioss are fixed stations with phone connections where
the customer usually uses a eyboard and television"lie screen to transaction
or to access information.
#t #9$ stations in $ingapore, for example, consumers can mae electronic
bill payments, send email or $'$ message and mae phone calls. )ioss in
the %nited $tates enable the customer to send money via wire transfers, cash
checs, mae purchases using cash, and mae phone calls.
:ocated at convenient public locations such as bus or subway stations,
convenience stores or shopping malls, these ioss enable electronic
payments by individuals who may not have regular access to the internet or
mobile phones.
Television Set-Top Boxes and Satellite Receiver
$pecialized boxes attached to a television can also be used for payments in
some locations. The set"top box attaches to the television and a eyboard or
other device, and customers can mae purchases by viewing items on the
television. Payment is made electronically using a credit card or other
account. 3hile usage is presently low, it could grow substantially in countries
with a strong cable or satellite television networ.
Biometric Payments
&lectronic payments using biometrics are still largely in their infancy. Trials are
underway in the %nited $tates, #ustralia and a limited number of other
countries. 'ost biometric payments involve using fingerprints as the
identification and access tool, though companies lie (isa 5nternational are
piloting voice recognition technology and retina scans are also under
consideration. &ssentially, a biometric identifier such as a fingerprint or voice
could replace the plastic card and more securely identifies the person
undertaing the transaction. The electronic payment is still charged to a credit
card or other account, with the biometric identifier replacing the card, chec or
other transaction mechanism.
Electronic Payments et!orks
(arious countries have electronic payments networs that consumer can use
to mae payments electronically. #C4 ;#utomated Clearing 4ouse< in the %$,
domestic &FTP.$ networs in #ustralia and $ingapore, and other networs
enable electronic payments between businesses and between individuals.
The consumer can go online, to a financial service ios or use other front"
end devices to access their account and mae payments to businesses or
other individuals.
Person-to-Person "P#P$ Payments
P+P payments enable one individual to pay another using an account, a
prepaid card or another mechanism that stores value. PayPal in the %$, which
was recently purchased by &bay, is one of the most fre!uently used P+P
mechanisms. The Tower =roup estimates that the volume of P+P payments
will grow from 8,> million transactions in +,,+ to 8.? billion transactions by
+,,>. P+P payments can be made through a variety of means, including
services lie PayPal, transfers using card readers, or other. 5n the future other
devices, such as mobile phones or P1#s, could also be used to enable P+P
electronic payments.
@ole of 5nformation technology in customer relationship management
(he better a business can manage the relationships it has with its customers the more successful
it will become. (herefore I( systems that specifically address the problems of dealing with
customers on a day"to"day basis are growing in popularity.
0ustomer relationship management (06M) is not *ust the application of technology, but is a
strategy to learn more about customers! needs and behaviors in order to develop stronger
relationships with them. ,s such it is more of a business philosophy than a technical solution to
assist in dealing with customers effectively and efficiently. 7evertheless, successful 06M relies
on the use of technology.
0hanging 6ole
• The scope of the IT department's role in an organization changes significantly when CRM is
implemented. In general terms, IT moves from filling an employee-supporting role to fulfilling a
customer-supporting or customer-enaling purpose.
(echnology Infrastructure
• The uilding up of technology infrastructure has long een a main emphasis of the IT role in a
company. !ith CRM, this role ta"es on much greater significance as hardware and software solutions for
the CRM infrastructure must e identified and incorporated into the day-to-day activities of managing
customer relationships.
Data ,nalysis
• IT employees must have an understanding of the company's usiness mission and goals with
CRM to perform one of its most important functions, data analysis. #efore mar"eting can interpret and
ma"e use of information gained through CRM, IT employees must perform data mining searches and
$ueries to deliver the raw data most useful to mar"eting and other leaders of the company's CRM
5nformation security
Information security, sometimes shortened to InfoSec, is the practice of defending information from unauthorized access,
use, disclosure, disruption, modification, perusal, inspection, recording or destruction. 5t is a general term that can be used
regardless of the form the data may tae ;electronic, physical, etc...<
Two maCor aspects of information security areD
• IT securityD $ometimes referred to as computer security, 5nformation Technology $ecurity is information security
applied to technology ;most often some form of computer system<. 5t is worthwhile to note that a computer does not
necessarily mean a home destop. # computer is any device with a processor and some memory ;even a calculator<.
5T security specialists are almost always found in any maCor enterpriseEestablishment due to the nature and value of the
data within larger businesses. They are responsible for eeping all of the technology within the company secure from
malicious cyber attacs that often attempt to breach into critical private information or gain control of the internal
• Information assuranceD The act of ensuring that data is not lost when critical issues arise. These issues include
but are not limited toD natural disasters, computerEserver malfunction, physical theft, or any other instance
wheredata has the potential of being lost. $ince most information is stored on computers in our modern era, information
assurance is typically dealt with by 5T security specialists. .ne of the most common methods of providing information
assurance is to have an off"site bacup of the data in case one of the mentioned issues arise.
Basic of information security:
Confidentiality refers to preventing the disclosure of information to unauthorized individuals or systems. For example,
a credit card transaction on the 5nternet re!uires thecredit card number to be transmitted from the buyer to the merchant and
from the merchant to a transaction processing networ. The system attempts to enforce confidentiality by encrypting the
card number during transmission, by limiting the places where it might appear ;in databases, log files, bacups, printed
receipts, and so on<, and by restricting access to the places where it is stored. 5f an unauthorized party obtains the card
number in any way, a breach of confidentiality has occurred.
Confidentiality is necessary for maintaining the privacy of the people whose personal information is held in the system.
5n information security, data integrity means maintaining and assuring the accuracy and consistency of data over its entire
This means that data cannot be modified in an unauthorized or undetected manner. This is not the same thing
as referential integrity in databases, although it can be viewed as a special case of Consistency as understood in the
classic #C51 model of transaction processing. 5ntegrity is violated when a message is actively modified in transit. 5nformation
security systems typically provide message integrity in addition to data confidentiality.
For any information system to serve its purpose, the information must be available when it is needed. This means that the
computing systems used to store and process the information, the security controls used to protect it, and the
communication channels used to access it must be functioning correctly. 4igh availability systems aim to remain available at
all times, preventing service disruptions due to power outages, hardware failures, and system upgrades. &nsuring
availability also involves preventing denial"of"service attacs, such as a flood of incoming messages to the target system
essentially forcing it to shut down.
5n computing, e"7usiness, and information security, it is necessary to ensure that the data, transactions, communications or
documents ;electronic or physical< are genuine. 5t is also important for authenticity to validate that both parties involved are
who they claim to be. $ome information security systems incorporate authentication features such as Gdigital signaturesG,
which give evidence that the message data is genuine and was sent by someone possessing the proper signing ey.
5n law, non"repudiation implies oneHs intention to fulfill their obligations to a contract. 5t also implies that one party of a
transaction cannot deny having received a transaction nor can the other party deny having sent a transaction.
5t is important to note that while technology such as cryptographic systems can assist in non"repudiation efforts, the concept
is at its core a legal concept transcending the realm of technology. 5t is not, for instance, sufficient to show that the message
matches a digital signature signed with the senderHs private ey, and thus only the sender could have sent the message and
nobody else could have altered it in transit. The alleged sender could in return demonstrate that the digital signature
algorithm is vulnerable or flawed, or allege or prove that his signing ey has been compromised. The fault for these
violations may or may not lie with the sender himself, and such assertions may or may not relieve the sender of liability, but
the assertion would invalidate the claim that the signature necessarily proves authenticity and integrity and thus prevents
Supply chain management (SCM) is concerned with the flow of products and information
between supply chain members' organizations. Recent development in technologies enables
the organization to avail information easily in their premises. hese technologies are helpful
to coordinates the activities to manage the supply chain. he cost of information is
decreased due to the increasing rate of technologies. !n the integrated supply chain model
("ig.#) bi$directional arrow reflect the accommodation of reverse materials and information
feedbac% flows. Manager needs to understand that information technology is more than &ust
computers. '(cept computer data recognition e)uipment* communication technologies*
factory automation and other hardware and services are included.
Integrated supply chain model
information and Technology: Application of SCM:
!n the development and maintenance of Supply chain's information systems both software
and hardware must be addressed. +ardware includes computer's input,output devices and
storage media. Software includes the entire system and application programme used for
processing transactions management control* decision$ma%ing and strategic planning.
Recent development in Supply chain management software is-
#. .ase Rate* Carrier select / match pay (version 0.1) developed by 2istribution Sciences
!nc. which is useful for computing freight costs* compares transportation mode rates*
analyze cost and service effectiveness of carrier.
0. 3 new software programme developed by Ross systems !nc. called Supply Chain planning
which is used for demand forecasting* replenishment / manufacturing tools for accurate
planning and scheduling of activities.
4. 5/6 distributing company and Saber decision echnologies resulted in a software system
called ransportation 7etwor% optimization for streamlining the bidding and award process.
8. 9ogitility planning solution was recently introduced to provide a programme capable
managing the entire supply chain.
Electronic Commerce:
!t is the term used to describe the wide range of tools and techni)ues utilized to conduct
business in a paperless environment. 'lectronic commerce therefore includes electronic data
interchange* e$mail* electronic fund transfers* electronic publishing* image processing*
electronic bulletin boards* shared databases and magnetic,optical data capture. Companies
are able to automate the process of moving documents electronically between suppliers and
Electronic Data Interchange:
'lectronic 2ata !nterchange ('2!) refers to computer$to$computer e(change of business
documents in a standard format. '2! describe both the capability and practice of
communicating information between two organizations electronically instead of traditional
form of mail* courier* / fa(. he benefits of '2! are-
#. :uic% process to information.
0. .etter customer service.
4. Reduced paper wor%.
8. !ncreased productivity.
;. !mproved tracing and e(pediting.
<. Cost efficiency.
=. Competitive advantage.
>. !mproved billing.
hough the use of '2! supply chain partners can overcome the distortions and e(aggeration
in supply and demand information by improving technologies to facilitate real time sharing
of actual demand and supply information.
Bar coding and Scanner:
.ar code scanners are most visible in the chec% out counter of super mar%et. his code
specifies name of product and its manufacturer. ?ther applications are trac%ing the moving
items such as components in 5C assembly operations* automobiles in assembly plants.
Data warehouse:
2ata warehouse is a consolidated database maintained separately from an organization's
production system database. Many organizations have multiple databases. 3 data
warehouse is organized around informational sub&ects rather than specific business
processes. 2ata held in data warehouses are time dependent* historical data may also be
Enterprise Resource planning ER!" tools:
Many companies now view 'R5 system (eg. .aan* S35* 5eople soft* etc.) as the core of their
! infrastructure. 'R5 system have become enterprise wide transaction processing tools
which capture the data and reduce the manual activities and tas% associated with processing
financial* inventory and customer order information. 'R5 system achieve a high level of
integration by utilizing a single data model* developing a common understanding of what
the shared data represents and establishing a set of rules for accessing data
Cy$er Crimes
Cybercrime is criminal activity done using computers and the 5nternet. This includes anything from
downloading illegal music files to stealing millions of dollars from online ban accounts. Cybercrime also
includes non"monetary offenses, such as creating and distributing viruses on other computers or posting
confidential business information on the 5nternet.
Ty%e Of Cy$er Crimes

5t can be classified in to ? maCor categories as

&'( Cy$er crime a)ainst In*ivi*ua+ &,( Cy$er crime A)ainst #ro%erty
&-( Cy$er crime A)ainst Or)ani.ation &/( Cy$er crime A)ainst Society

&'( A)ainst In*ivi*ua+s
&i(Emai+ s%oofin) :
# spoofed email is one in which e"mail header is forged so that mail appears to originate from one source but actually
has been sent from another source
&ii( S%ammin) :
$pamming means sending multiple copies of unsolicited mails or mass e"mails such as chain letters.
&iii( Cy$er 0efamation :
This occurs when defamation taes place with the help of computers and E or the 5nternet. &.g. someone publishes
defamatory matter about someone on a website or sends e"mails containing defamatory information.
&iv( arassment 1 Cy$er sta+2in) :
Cyber $taling 'eans following the moves of an individualHs activity over internet. 5t can be done with the help of
many protocols available such at e" mail, chat rooms, user net groups.

&,( A)ainst #ro%erty:
&i( Cre*it Car* Frau* :
&ii( Inte++ectua+ #ro%erty crimes : These include
$oftware piracyD illegal copying of programs, distribution of copies of software.
Copyright infringementD
Trademars violationsD
Theft of computer source codeD
&iii( Internet time t3eft :
the usage of the 5nternet hours by an unauthorized person which is actually paid by another person.

&-( A)ainst Or)anisation
&i( "naut3ori.e* Accessin) of Com%uter:
#ccessing the computerEnetwor without permission from the owner.
it can be of + formsD
a< ChangingEdeleting dataD
%nauthorized changing of data.
b< Computer voyeurD
The criminal reads or copies confidential or proprietary information,
but the data is neither deleted nor changed.
&ii( 0enia+ Of Service :
3hen 5nternet server is flooded with continuous bogus re!uests so as to denying legitimate users to use the server or
to crash the server.
&iii( Com%uter contamination 4 5irus attac2 :
# computer virus is a computer program that can infect other computer programs by modifying them in such a way as
to include a ;possibly evolved< copy of it.
(iruses can be file infecting or affecting boot sector of the computer.
3orms, unlie viruses do not need the host to attach themselves to.
&iv( Emai+ Bom$in) :
$ending large numbers of mails to the individual or company or mail servers thereby ultimately resulting into
&v( Sa+ami Attac2 :
3hen negligible amounts are removed I accumulated in to something larger. These attacs are used for the
commission of financial crimes.
&vi( Lo)ic Bom$ :
5ts an event dependent programme , as soon as the designated event occurs, it crashes the computer, release a
virus or any other harmful possibilities.
&vii( Tro6an orse :
an unauthorized program which functions from inside what seems to be an authorized program, thereby concealing
what it is actually doing.
&viii( 0ata *i**+in) :
This ind of an attac involves altering raw data Cust before it is processed by a computer and then changing it bac
after the processing is completed.

&/( A)ainst Society
&i( For)ery :
currency notes, revenue stamps, mar sheets etc can be forged using computers and high !uality scanners and
&ii( Cy$er Terrorism :
%se of computer resources to intimidate or coerce others.
&iii( 7e$ 8ac2in) :
4acers gain access and control over the website of another, even they change the content of website for fulfilling
political obCective or for money.

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