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T.Y.BMS (Vth Sem)


















Consumer-to-consumer transactions


Common Technology Differences of B2B and B2C
E-Commerce –Case Studies leading the Transformation





































delivering & supporting customers. As the world become increasingly interconnected. without having to create & maintain their own private network s for selling. The number of businesses devoted to promoting commerce on the internet has been growing like Topsy since the end of 1994. this project simply explain how business transaction can be executed across an unreliable & unsecured medium like the internet. describing products. how you will be buying & selling in the future. & ATMs are always within a reach for quick. & delivering them electronically will be of interest to those who wish to participate in this new markets. particularly through the internet with its open protocols. While the techniques for attracting consumer attentions. forward looking business will be able to make their product available to a global market. & discussed some of the methods currently being planned & implemented – in other words. & consumers’ flocks to local outlets of national &international franchise networks. & how it will work. and automatic banking. Corporations advertise through broadcasting & networks. but they all share the . easy.E-commerce 4 The idea of doing business electronically over networks is nothing new: We think nothing of ordering the products we’ve seen advertised on television on in printed catalog with a phone call or a fax.

pay for them. get paid for all products purchased. Everyone wants to feel confident that the individuals they deal with across the internet are who they say they are. & not lose any product to theft.E-commerce 5 goal of making commercial transaction over the internet safe .). simple secure .& earn a profit in the process. Electronic consumers need to feel confident they can safely select and take delivery of products. Electronic merchants need to feel confident they can safely market & deliver their product. & not be concerned about compromise of payment information ( like credit card or bank account no. to avoid losses to fraud. but can be categorized as either creating secure & reliable channel to carry transaction across internet connection (which are inherently unsecured & unreliable). or using more traditional channels to carry sensitive information. The method employed to achieve these ends are somewhat more various. “Search for better ways to do things and you will find success” .

E-commerce 6 OBJECTIVES The study of e-commerce is much broader that the current enthusiasm for home shopping on the web.  Consumer transaction with business.  Informal business to business transaction using internet ecommerce.  To make readers aware of the role played by E-commerce in big organizations. . using internet e-commerce. or other members of the public. The objective behind the preparation of the project on “E-Commerce & Internet” is: To know the importance of E-commerce in today’s environment. but if it is abused or misused it can also act as a curse.  To make readers aware that E-commerce is a double edged sword. If it is properly used it can be a boon or a blessing.

marketing and servicing of products or services over electronic systems such as the Internet and other computer networks. or computer software. e-commerce eCommerce or ecommerce) consists primarily of the distributing. E-commerce follows the same basic principles that traditional commerce follows—that is. INTRODUCTION OF E-COMMERCE Electronic Commerce is exactly analogous to a marketplace on the Internet. without having to leave their homes or offices.E-commerce 7  To make readers aware that E-commerce is a double edged sword. such as an electronic book. by downloading it over the Internet. If it is properly used it can be a boon or a blessing. consumers can immediately obtain a product or service. But rather than conducting business in the traditional way—in stores and other “brick and mortar” buildings or through mail order catalogs and telephone operators— in e-commerce buyers and sellers transact business over networked computers. They can visit the World Wide Web sites of multiple vendors 24 hours a day and seven days a week to compare prices and make purchases. buyers and sellers exchange and transport goods from one place to another. E-commerce offers buyers convenience. Electronic Commerce (also referred to as EC. but if it is abused or misused it can also act as a curse. In some cases. a music file. selling. . buying.

they may enjoy going to a store or a shopping mall with friends or family. Business-tobusiness commerce represented one of the fastest growing segments of ecommerce. clothing. hotel rooms. retail transactions made up the largest part of e-commerce. ecommerce firms have no distribution costs. and if the product or service can be downloaded. food. For instance. electronics. Because they sell over the global Internet. At the close of the 20th century. Automated order tracking and billing systems cut additional labor costs. airline tickets. or maintain a store or print and distribute mail order catalogs. an . event tickets. e-commerce offers a way to cut costs and expand their markets. books. automobiles. staff. have failed for the most part because customers want to test the comfort of an expensive item such as a sofa before they purchase it. Consumers are reluctant to buy some products online. sellers have the potential to market their products or services globally and are not limited by the physical location of a store. Many people also consider shopping a social experience. Consumers purchased computers. They do not need to build.E-commerce 8 For sellers. furniture. and countless other commodities over the Internet. for example. Businesses ordered supplies and coordinated complicated projects electronically E-commerce also has some disadvantages. Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs. however. Online furniture businesses.

Sellers are recognizing in different forms such as retailers who sell directly to consumers and wholesalers who sell to retailers & others. usually for money. Going to work each day for a company that produces a product. he/she immediately recognize several different players of the commerce such as: Buyers: These are the people or organization with money who want to purchase goods & service products. Producers: these are the people organization that create the product & services that seller’s offer to buyers. When you buy something at a store you are participating in commerce. Wholesalers are also known as distributors. Producer may is classified in the category of a seller.E-commerce 9 experience that they cannot duplicate online. E-Commerce according to Person Halls book E-Commerce started in 1994 with the first banner ad being placed on a website. Consumers also need to be reassured that credit card transactions are secure and that their privacy is respected. They can sell their products to any category to customers. Sellers: These are the people who offer goods & service to buyers. . When one thinks of different ways. is a link in the chain of the commerce. WHAT DO YOU MEAN BY COMMERCE Commerce is the exchange of goods & services.

 It improves external business relationships.  It provides information to facilitate delivery of goods & services.  It uses technology to achieve business goals. e-commerce refers to the paperless exchange of business information using electronic data interchange. settlements of accounts using a variety of computer networks”.E-commerce 10 DEFINITIONS OF E-COMMERCE “What is E-Commerce? E-Commerce supports an entire range of activities such as product design. commercial transactions. advertising. . electronic fund transfer & other networked based technologies.  It is an evolution in the way companies’ internet. manufacturing. In a holistic sense electronic commerce can be summarized as:  It is a business strategy. Thus. electronic mail.

Sellers: These are the people who offer goods & service to buyers. HISTORICAL DEVELOPMENT . Producers: these are the people organization that create the product & services that seller’s offer to buyers. usually for money. Going to work each day for a company that produces a product. When you buy something at a store you are participating in commerce. Sellers are recognizing in different forms such as retailers who sell directly to consumers and wholesalers who sell to retailers & others. When one thinks of different ways. he/she immediately recognize several different players of the commerce such as: Buyers: These are the people or organization with money who want to purchase goods & service products. is a link in the chain of the commerce. Wholesalers are also known as distributors.E-commerce 11 WHAT DO YOU MEAN BY COMMERCE Commerce is the exchange of goods & services.

. for example. this would include enterprise resource planning systems (ERP). usually with secure connections (HTTPS.E-commerce 12 The meaning of the term "electronic commerce" has changed over the last 30 years. from the 1990s onwards. In the 1970s and 1980s. like credit card payment authorizations. Originally. a special server protocol that encrypts confidential ordering data for customer protection) with e-shopping carts and with electronic payment services. "electronic commerce" meant the facilitation of commercial transactions electronically. it encompasses a very wide range of business activities and processes. However. The 'electronic' or 'e' in e-commerce refers to the technology/systems.the purchase of goods and services over the World Wide Web. E-commerce is the complete set of processes that support commercial/ business activities on a network. it came to include activities more precisely termed "Web commerce" -. usually using technology like Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). applications and middleware. including backend systems. the 'commerce' refers to be traditional business models. Today. to send commercial documents like purchase orders or invoices electronically. The ever growing dependence of modern industries on electronically enabled business processes gave impetus to the growth and development of supporting systems. this would also (ATM) and telephone banking in the 1980s was also forms of e-commerce. In the dot com era. from e-banking to offshore manufacturing to e-logistics. data mining and data warehousing. where both were introduced in the late 1970s.

after the collapse of online grocer Webvan. many journalists and pundits forecast that e-commerce would soon become a major economic Albertsons and Safeway. However. Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001. both started e-commerce subsidiaries through which consumers could order groceries online. Subsequently. small sellers use online auction sites such as EBay(tm). many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. inventory control systems and financial accounting software. supply-chain management software. accordingly many small home-based proprietors are able to use the internet to sell goods. The Elements of a typical commerce . For example. Often. The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods. or sell via large corporate websites like Amazon. in order to take advantage of the exposure and setup convenience of such sites. customer relationship management software. it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. When the Web first became well-known among the general public in 1994. two traditional supermarket chains.E-commerce Examples 13 are broadband and fiber-optic networks. a substantial number of businesses in the United States and Western Europe developed rudimentary web sites. between 1998 and 2000.

B-to-B transaction often use purchased orders. If the people are not aware of the place & way to reach the place. .E-commerce 14 The basic elements of typical commerce activity are listed as below: (1) Product or service: One must have a product or service to offer. (4) Method of accepting orders: in a mail order company the orders come in by mail or phone & are processed by the employees in the organization. The product may be from a piece of paper to an airplane: (2) Place: one must have a place to store the product for marketing. (6) Method of Delivery: You need to have a way to deliver the product or service. This process is known as marketing. Many businesses do not require the payment at the time of delivery. you will not be able to sell anything. For most physical product. (3) Marketing: you need to figure out a way to get people to come to your place. (5) Method of accepting money: If you are at Wal-Mart you can pay in cash or by cheque or by credit card for your purchases. & some of the products & service are delivered continuously. we tend to think of the place as a store or shop. Place can sometimes be very ephemeral for example a phone number may be a place. It is very important component of commerce.

(2) A place to sell the product: In the e-commerce case. One can demonstrate multimedia presentation of the product & its entire feature on the web page itself. all the above listed elements are available but hey are having slight variation in the real life situation. which may not be possible in case of physical product of commerce activity. it is virtual product shown on a web site. One can click on the icon and fill in the shopping . a website displays the products in all ways & act as a place for E-Commerce.E-commerce (7) 15 Method of accepting Returns: If the customer is not happy with your product then you need a way to accept a return. (3) A way to get customers to visit your website: In case of ECommerce search engines and linkages with other web sites play an important role in helping the customers to reach web sites of the eorganizations. (4) A way to accept orders: The orders are accepted on the web site itself. (8) Warranty Claims: Sometimes if the product breaks in the way before delivery or some other problems crop up with the product. (1) A Product or service: In case of E-commerce. after its delivery during the warranty period. On the web pages of the E-commerce companies shopping carts are being provided. The Elements of E-commerce In case of an E-commerce. in such a situation warranty claim are to be honored.

smart cards. On-line forms.of payment is routed through Value Added Networks (VANs) and Payment Gateway Systems. warranty claims are to be honored as in the case of commerce. buyers and sellers are in direct contact with each other. on-line knowledge bases and frequently asked questions. The payments in Ecommerce are made using Electronic Fund Transfer in various form using credit cards. (5) A way to accept money: In case of traditional commerce. etc. in case of [commerce all the trading companies have the system of accepting the returns if the goods and services are not to the satisfaction of the customer or not up to the standards/ specifications mentioned in the product catalogs or brochures hosted on the web pages. In such situation. (7) A way to handle warranty claims: Sometimes if the product breaks in the way or some other problems crop up with the product. .E-commerce 16 card to order items to be purchased and it is accepted by the Ecommerce Company as order from the customer. etc. A way to provide customer service: The main tools of the customer service are [-mail. (6) A way to accept returns: As is the case of commerce. The information . e checks.

and information. Business-to-consumer transactions (B2C): These are the transactions that most of us are familiar with today. Here. and creates huge new markets for indigenous products and services. where each transaction is typically small in volume. This category is characterized by a large number of transactions. The end-customer could be totally . While many developing countries are beginning to take advantage of the potential of Ecommerce. or surfing the Web on find the best deal for some particular item. Like individual customers buying books and music CDs over the Web. Communication. the merchant setting up the shop on the Web deals directly with the end customer. For developing countries.E-commerce 17 Models of E-commerce Most transactions in E-commerce may broadly be classified into two main categories: (I) Business-to-consumer (ii) Business-to-business (iii) Consumer-to-consumer transactions The vast majority of this activity to date has been taking place in countries with advanced economies and infrastructure. electronic commerce presents important new opportunities to achieve a more level playing field vis-à-vis larger. more developed economies. It may be define as any business selling its product or service to consumers over the internet for their own use. as it demises in-place advantages of cost. critical challenges remain to be overcome before the vision of a truly integrated and equitable world economy can be realized.

The C2C. For deal making purposes a large virtual consumer trading community is developed. This category is characterized by limited number of transactions. . Consumer-to-consumer transactions (C2C): Consumer-to-consumer (C2C) electronic commerce promotes the opportunity for consumer to transact goods or services with other consumer present on the internet. share many common characteristics and technologies. The two forms of web-based e-commerce. The end-customer is typically a previously approved or registered customer or at least known to the merchant. where each transaction is typically or larger volume. they also differ in important ways. business-to-business and business to-consumer.E-commerce 18 unknown to the merchant or might be visiting the shop for a few occasional purchases. where the product traded is for business use. However. Business-to-business transactions(B2C): These are transactions between two businesses or corporations. in characteristics and technologies as well as in the business drivers for adopting e-commerce. in many a situations models the exchange systems with a modified form of deal making.

such as catalog shopping. additional safeguards are built into the existing processes to protect the companies against possible fraud. In the business-to-consumer e-commerce market. the need to process payments via credit card securely has been a major driver for the development of the broad range of security technologies and payment systems. In some cases.E-commerce 19 Common Technology Differences of B2B and B2C There are also important technology differences between the business-to business and business-to-consumer e-commerce models. this issue is not as pressing because the merchant typically is willing to invoice the buyer and collect payment later and because business customers are used to ordering via a purchase order rather than paying immediately via credit card. However. using their . In the business to business sector. merchants have taken a familiar business model. On business-to-business e-commerce sites. For business-tobusiness transactions. and transported it to the web as a new medium. EDI is getting replaced because of the advantage Internet offers to conduct such transactions. this need is felt most acutely on business-to-consumer sites because E-commerce merchants expect payment at the time an order is placed and consumers want to be able to pay online to avoid the delay and inconvenience associated with having to mail a check to the merchant. the anticipated benefits to the vendor vary according to the business model for becoming involved with e-commerce initially. For example.

they are ready to take advantage of it. . For example. Merchants are investing in ecommerce to extend their presence to the web so they will not become visible by their absence. In the future. operator to place an order. other business drivers may become important as well.E-commerce 20 web site instead of a paper catalog to provide product information and using online ordering to replace calling . as usage of the web becomes more widespread and possibly begins to replace (rather than supplement) existing channels. Gaining experience with web-based e-commerce is particularly important so that a. expenses of direct mail merchants (such as printing and postage) could be reduced dramatically if web-based e-commerce replaces traditional catalog sales. to give consumers and additional mechanism through which to do business with them. and to gain experience with webbased e-commerce so that when (or if) it becomes a larger part of their sales. company can avoid being-outflanked by competitors who take advantage of the web more quickly and use it to gain market share. these web sites may not generate many incremental orders (orders that would not be placed if the company was not on the web).

and just about anything else for sale on the Internet. Consumers can find computers. clothing.  Product Transactions . music. books. airline and event tickets. including retail businesses that sell products to consumers. service providers that sell services to consumers. auctioneers that create a marketplace for products and services. automobiles.E-commerce 21 TYPES OF E-COMMERCE A variety of businesses are conducted online. and business-to-business commerce. food. Retail transactions make up the largest part of e-commerce.

Amazon.Amazon. Shoppers are able to search a wide variety of products. order online. make their selection. and receive updates about the status of their shipment. can offer millions .com Retail Web sites typically include electronic catalogs that describe and display products for sale. Consumers can search for individual items or randomly browse electronic Web site illustrates the ease and immediacy of electronic commerce. After years of operating was among the first e-businesses to report a profit.E-commerce 22 E-Commerce Web Site A page from the Amazon. some much larger than their mail order print counterparts. An Internet book retailer. for example.

E-Commerce –Case Studies leading the Transformation B2B Comprises about 80-90 percent of all e-commerce by value. warehousing. Financial services represent a large segment of e-commerce.E-commerce 23 of different book titles for sale on its Web site. Other sites provide consumers with a way to research and obtain mortgages and other loans online. make reservations. in the physical world by incorporating a supply chain. and purchase tickets at the same site. Travelers can plan all the details of their vacation or business trip. travel literature. & customer relationship to . Amazon is a pure –play Dotcom Company that rediscovered itself. For a small fee. and booking information for travelers. Such sites also offer maps. and booking hotel rooms. after initial emphasis of sales through website only. It transformed itself into an ebusiness. far more titles than could fit into a store or that could be included cost-effectively in a print catalog. Intel is an existing company that started using the internet as a distribution channel in the mid 1990s. In this section we will present three case studies that are leading this transformation in different areas. online investment brokerages trade stocks on behalf of their clients. Travel sites offer a method of scheduling airline flights. Online stock brokerages typically charge customers lower fees than traditional stock brokerages. renting cars.  Service Transactions Other e-commerce businesses offer services.

com. Jeff Bezos. games. & that the cost of real estate was always going up. Intel was handling over 3 million page hits per day with online revenue of $ 2 billion per month. easiest & most enjoyable shopping experience possible. CEO of Amazon. Intel:In the mid 1990s. employees. opened as an online bookstore in July 1995. employee & supplier business interactions. The Amazon. eBay is yet another pure-play dotcom company that pioneered C2C e-commerce & became a profitable company from the very beginning. free electronic greeting cards. online auctions. channel resellers. aimed at significantly improving main website offers millions of books. Intel’s website deliver online information & support to a complex network of customer. Amazon:Amazon is a pure –play B2C dotcom website. personalized & secure B2B functionality. using business system & internet technology.E-commerce 24 become a profitable business. Within a few years. Intel adopted e.commerce technologies to reach out to its customer & trading partners. It mission was to use the internet to transform book buying into fasted. Intel defined e-business in terms of what they called 100% e-corporation concept: a corporate strategy to re-engineer & automate business processes. Over 6000 user in more than 50 locations around the world use the customized. DVDs. suppliers & OEMs. . CDs. argued that retail store required lot of real estate in prime location to sell product to customers.

13. enabling trade on a local. Germany. tools. gourmet foods. computers. prescription drugs .” eBay enable a visitor to the site to find. The company also became sensitive to local cultures. & pay for an item by bidding as if he were participating in an auctions. home furnishings. Even in July 1995. France & Japan with content in local language for customers. it had customers from 45 countries. & interact through it as also directly. electronics.E-commerce 25 videos. eBay acquired a successful online auction site. kitchenware. eBay:The eBay website proclaims that “eBay is the world’s online marketplace. They follow the auction or fixed price formats facilitated by the . eBay offer an online platform where millions of item are traded each day. national & international basis. & services including film processing. It also opened local office in these countries to serve customers. For example. in India. Seller & buyers meet through the eBay marketplace. baazee. By the year 2000. health & beauty goods. With a diverse & passionate community of individual & small businesses. toys. It opened distinct websites for its customer in Britain. buy. Amazon also expanded in parallel into international market.8 percent of its revenues came from over 150 countries.

that was comparable to credit card charge. Pay pal.E-commerce 26 website. The storefront is nothing but a series of HTML web pages that display the products. The development of the same is quite simple and easy. as they would allow the companies to service customers The service was offered free to the buyer. logistics etc.the storefront. is very crucial. Half. Most items require small payments to be’ and Amazon. It made C2C payments as easy as sending an email. E-payments are central to the whole e-business cycle. with thousands of software available in the market. became very popular with the trading community. There are other auction sites such as Yahoo! supply chain. the payment mechanism. and the entire e-commerce depends on this. Both buyer & seller found it inconvenient to deal with money orders or is the world’s biggest store. However the second part. but sellers were required to pay a small fee to pay pal. E-COMMERCE PROCESS E-commerce process involves via three logical entities . a micro –payment gateway for effecting such payments. innovative and at lower . But eBay is the world’s largest auctions C2C marketplace. Payments are made by buyer & goods are received by them from sellers. the payment mechanism and the supply. just as Amazon. The third is more of a physical world operation which we're all familiar with .

and where they stand. The elements that go into the payment mechanisms are.  Cardholder .  Merchants . Hence. it's very basic the consumer who buys a service from merchant pays by entering his credit card details. This is also the crucial part. world over utilizing credit cards for payments.The individual who is making the purchase (either goods or services) using the credit card. There is nothing new in the process. clearing and settlement of credit and debit claims.The bank that has issued the credit card to the cardholder. .E-commerce 27 costs. servicing company.. The issuing bank provides the monthly billing statements to the cardholder. let us look into the various instruments that would allow us to do the same. and the bank are not balanced. Having understood how crucial they are to the system as such. or even worse payment defaults then the whole process is disrupted.the Company that is selling goods and services to cardholders.  Issuing Bank . because of payment delays. The companies. and the credit card organization will handle the payment. This is a time-tested solution for all the problems. the central to the problem is prompt and secure payment. because if the claims and debits of the various participating companies -customer.

The transfer of funds between the issuing banks and the acquiring banks Authorization Process When making purchases over the web. They are referred to as Card Issuer.The bank that enables the merchants to accept the credit/card payments. and are offered directly to the card holder. the cardholder uses a web browser to procure product information from the merchant.E-commerce  28 Acquiring Bank .)  Payment Application .  Card Association . by the merchants to request credit card authorization and settlement of funds between the merchant and the acquiring bank.An application used. After getting the amount from the issuing bank. This works in conjunction with the payment gateway (usually third party) to accept or decline the cardholders purchase request.The credit card details as entered by the cardholder are verified and confirmed with the issuing banks. There are two types of processes that are utilized by the payment mechanism:  Authorization Process. as they are not issued by any bank. and  Settlement process. the acquiring bank deposits it into the merchant account.An association such as VISA International and MasterCard. (Al1 American Express and Discover are not Card Associations. The merchant captures the . which issues credit card through its members (the issuing banks to the cardholder).

A form opens up on the web browser. .E-commerce 29 product information as well as credit card information and then communicates the credit card information to the acquiring bank through the payment application. The authorization process in a typical e-commerce cycle. There are two cycles . (A lock symbol in the status bar of the browser indicates that the site from that point on is secure and encrypted). E. e appropriate card association (or card issuer) to execute the transaction. in which the cardholder enters his credit card information. where goods or service are displayed. the customer selects the product. The acquiring bank works with: i.Authorization (credit card authorization) and settlement (settlement of payments to the merchant). Some web sites would prompt for the shipping address as well. the cardholder visits the website of the merchant.Commerce Payment Mechanism Under E-commerce payment mechanism. Using a web browser (Microsoft Internet Explorer or Netscape Navigator). which would be secure. which he intends to purchase by clicking on the "Purchase" button.

then a message declining the transaction is generated and transmitted to the customer through the merchant.  Apart from the verification of credit card. traffic. A confirmation number is generated and the "open to buy" amount is blocked. The card association (or issuer) verifies the card information and determines whether the cardholder has sufficient credit line available to pay for the purchases (the purchase amount is also transmitted). the acquiring bank also verifies the address whereby the shipping details provided by the cardholder at the time of sale is 'compared to the billing information stored in the database of the cardholder. This whole end-to-end process (from the moment the cardholder clicks on "purchase" to the receipt of the authorization message) takes only a few seconds based on the payment application. and Internet connection on the client and others. .  The system in the acquiring bank received the information and forwards this information to the card associations for verification as well as a4thorization.  If the card information is incorrect or if the credit card number is invalid.E-commerce  30 The payment application encrypts and transmits the credit card information to the acquiring bank through secure communications with Secured Sockets Layer (SSL). The amount that he can buy is referred to as "open to buy". and then on to the cardholder.  The information encrypted and sent to the merchant through the payment application.

 The acquiring bank sends settlement instructions to the appropriate card association for verification. This is a typical batch subscription based services or software downloads.  The merchant receives a notification with the fund transfer. the merchant initiates the fulfillment process of the product or services as requested by the cardholder. the merchant can initiate a settlement process.  The merchant's payment application encrypts the purchase information and transmits the encrypted information to the acquiring bank.E-commerce 31 After successful authorization of the credit card. . Sometimes. as well as other procedures and policies. only after the cardholders order has been fulfilled. Settlement Process The settlement process of the orders fulfilled by the merchant. According to general rules. the fulfillment can take days. The credit amounts from the issuing bank and makes the deposit to the merchant account.  The merchant on a periodic basis compiles a list of fulfilled orders and transmits the details to the acquiring bank. While the authorization process takes only few seconds. depending on the funds availability with the issuing bank. the settlement process may take several days. while some may take a few seconds .say physical goods like computers.

LG Software and a few other nonbanking companies are toying the idea of launching payment gateways for inter bank and Bank to Bank transactions. Payments can be effected through credit cards or directly by debiting the accounts of the customers of the respective banks. Besides HDFC Bank and ICICI Global Tele-systems. E-Commerce Process Cycle Card Holder click on “purchase” button Merchant captures the information Payment application encrypts the information & forwards to the acquiring bank Acquiring bank forwards the information to the card association or card issuer Payment application encrypts the information & forwards to the acquiring bank . HDFC bank claims it was the first to launch a payment gateway on May 1st 2000. Interestingly.E-commerce 32 Currently. even ICICI bank claims to be the first one to have a payment gateway. which it flagged off on 15th July 2000. HDFC Bank and ICICI have launched payments gateways for online transactions.

buyers and seller are often unknown to each other in the process of purchasing a product with a credit card by telephone. which is the norm in offline transactions.Indian (ICICI)'s Payment Gateway: ICICl's gateway has been developed along with Compaq and QSI. The customer presents his card at the merchant's shop.E-commerce Card Holder is notified with confirmation number 33 Merchant receives confirmation message Examples of E-Commerce Pay seal. The transaction process is being explained in the below diagram of transaction with the pay seal. The gateway is implemented in two-mode (I) Offline Purchasing Process (ii) Online Purchasing Process. The merchant uses a point of sale (POS) service to send the card information over a dial-up connection to his acquiring bank. . Financial Software and Systems is implementing the project in India. the customer can not validate the card usage with his signature. ] (i) The Offline Purchasing Process: This is an example of business to consumer credit card transactions. The authentication of the card is in the absence. The acquiring is done by ICICI bank. In the environment. The acquiring banks then send this information to the issuing bank through the card network. (ii) The online Purchasing Process: In the online market place. The issuing bank than authorizes or rejects the transaction and sends the message back to the merchant over the path.

E-commerce 34 Transaction process with Payseal The Shopping Process with Payseal .

 The merchant transmits the acknowledgement of the payment to the customer's browser. The web merchant forwards a digital order to the Payseal server in encrypted format. which is directly sent to the payment server.  The customer provides his credit card details. The issuing bank authorizes the payment transmits the confirmation back to the payment gateway through acquiring bank.E-commerce 35 In a typical retail process on the Internet  The customer fills his shopping card on a merchant website and proceeds & check out.  On receiving authentication and authorization.  The transaction information is transmitted to the merchant server. . IGIGI bank then transmits the message to the card holders (issuing) for payment authorization.  Payseal authenticates the merchant and provides a payment details directly on the customer's browser over a secure 128 bit SSL+ connection. Payseal forwards validation of the payment instrument to the merchant server.  The credit card details are then switched to IGIGI Bank for authentication.

E-commerce 36 The entire process Payseal integrates seamlessly with the help buys application of the web merchant ensuring a pleasant shopping experience the customer. The credit card details of the customer remain unknown to the net merchant. Customer’s Information Customer with Browser Merchant with web server The Process of Payseal Acquiring Bank .

the web can significantly lower both order taking cost and customer service costs after sale.  Larger Purchases per transaction. Some of the benefits are very specific to the consumer such as :  Increased choice of vendors and products. Greater amounts of information that .  Access to a more geographically dispersed customer base.E-commerce 37 Benefits of E-commerce Important benefits of E-commerce include the following:  Lower transactions costs .  Improved Customer Interactions.  Convenience from shopping at home or office. in different ways.If an E- Commerce site is implemented well.  can be accessed on demand.  People can shop.  Reduction in inventions.  Integration into business cycle.  Low Procurement processing cost.  Ledger Catalogues.

Sufficient work done in market research and analysis. network infrastructure and a secured. Greater Customization in the delivery  of services. well-designed website. an e-commerce company will survive not only based on its product. good post-sales services. Business failure is as much a reality in e-commerce as in any other form of business. . well-organized business structure. but by having a competent management team. A company that wants to succeed will have to perform 2 things: Technical and organizational aspects and customeroriented. A good management team armed with information technology strategy. Following factors will make business of companies succeed in ecommerce: Technical and organizational aspects 1. Success factors in e-commerce In many cases. 2.E-commerce 38 More competitive and increased price  comparison capabilities. A company's IT strategy should be a part of the business re-design process. E-commerce is not exempt from good business planning and the fundamental laws of supply and demand.

In the past. Naturally. Credit cards are the most popular means of sending payments on the internet. which not only includes complete product information. Providing complete understanding of the products or services offered. and firewalls can enhance this requirement. hardware redundancy. A unique property of the Internet environment is that individual customers have access to far more . The tasteful use of colour. 5. Such independent payment gateways are still used by most small and home businesses. and handling complaints promptly and effectively. card numbers were transferred securely between the customer and merchant through independent payment gateways. 6. possibly through re-engineering and information technologies. the e-commerce vendor must also perform such mundane tasks as being truthful about its product and its availability. 7. Parallel servers. Providing an attractive website. fail-safe technology. photographs. Most merchants today process credit card transactions on site through arrangements made with commercial banks or credit cards companies. but also sound advisors and selectors. Providing reliability and security. accounting for 90% of online purchases. graphics. Providing an easy and secured way for customers to effect transactions. and white-space percentage may aid success in this respect. animation. Streamlining business processes. shipping reliably. information encryption.E-commerce 39 3. fonts. 4.

and discounts.) Customer-Oriented A successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Cross-linked websites and advertising affiliate programs can also help.E-commerce 40 information about the seller than they would find in a brick-and-mortar situation. purchase suggestions. 2. and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale. Providing a sense of community. 3. soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect. so this distinction does not hold water in every case. Personalized web sites. (Of course. special offers. Chat rooms. Such factors include: 1. Providing an incentive for customers to buy and to return. customers can. Providing personal attention. . Sales promotions to this end can involve coupons. Many factors go into making this possible. discussion boards. research a brick-and-mortar store online before visiting it. and occasionally do.

Failure to understand customers. Owning the customer's total experience. Provision of component information and safetyand-health comments may assist e-tailers to define the customers' job. expectations. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. problems can still arise. why they buy and how they buy. Helping customers do their job of consuming. just as traditional retailers may do. and motivations. E-tailers foster this by treating any contacts with a customer as part of a total experience. 2 Inability to predict environmental reaction. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits. Ecommerce could potentially mitigate this potential problem with proactive and focused marketing research. What will competitors do? Will they introduce competitive brands or competitive web sites? Will they supplement their service offerings? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research . an experience that becomes synonymous with the brand. 5. Problems Even if a provider of E-commerce goods and services rigorously follows these "key factors" to devise an exemplary e-commerce strategy.E-commerce 41 4. Sources of such problems include: 1.

then training and setting up incentives for workers to embrace the strategy may assist. Many syndicates have caught on to the potential of the Internet as a new revenue stream. or fail to give employees the whole picture. It may help to get top management involved right from the start. Basic project planning. critical chain. and failure to understand the timing and sequencing of tasks can lead to significant cost overruns. software. 5. This often results in a failure to gain sufficient corporate resources to accomplish a task. accountable. industries and markets may mitigate some consequences here. and flexible organizational structure. just as in non-electronic commerce. 7. 6. Failure to obtain senior management commitment. Failure to obtain employee commitment. hardware. Can staff. Becoming the victim of organized crime. one can move towards a flat. Over-estimation of resource competence. which may or may not aid coordination. 8.E-commerce 42 into competitors. critical path. Two main methods are as follows: (1) Using identity theft techniques like phishing to order . If existing reporting and control relationships do not suffice. 4. Profitability may have to wait for the achievement of market share. 3. If planners do not explain their strategy well to employees. Failure to coordinate. Under-estimation of time requirements. or PERT analysis may mitigate such failings. and processes handle the proposed strategy? Have e-tailers failed to develop employee and management skills? These issues may call for thorough resource planning and employee training. Setting up an e-commerce venture can take considerable time and money.

Virtual marketers can sell some non-digital products and services successfully. they may typically go to people in remote locations. Product suitability Certain products or services appear more suitable for online sales. and modification). they may involve embarrassing purchases. and they may have shut-ins as their typical purchasers. money or resources needed to complete a project and often find themselves without the necessary components to become successful. office supplies. Such products generally have a high value-to-weight ratio. education. . eBay and Paypal. 9.E-commerce 43 expensive goods and bill them to some innocent person. retrieval. Many successful purely virtual companies deal with digital products. communication. (including information storage. Too often new businesses do not take into account the amount of time. Examples of this type of company include: Google. Other successful marketers such as use Drop shipping or Affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory. (2) Extortion by using a network of compromised "zombie" computers to engage in distributed denial of service attacks against the target Web site until it starts paying protection money. Failure to expect the unexpected. and financial transactions. Examples include numerous sellers on eBay. then liquidating the goods for quick cash. photography. others remain more suitable for offline sales. software. movies. music.

reliable information about which part number their particular version of a product needs. provision of such services has become the most profitable segment of e-commerce. People are able to steal your . generally highvalue) and potential embarrassment. both for consumer items like washing machines and for industrial equipment like centrifugal DVDs and books — are particularly suitable for a virtual marketer. e-commerce solutions in spares do not compete with retail stores. These details can then be used to steal money from you and can be used to buy things on line that you are completely unaware of until it is too late. If this information is leaked into the wrong hands. Products such as spare parts. [Citation needed] There are also many disadvantages of e-commerce.E-commerce 44 Items which can fit through a standard letterbox — such as music CDs. A factor for success in this niche can consist of providing customers with exact. age. also seem good candidates for selling online. since they typically do not stock them at consumer outlets . one of the few enduring dot-com companies. has historically concentrated on this field. national insurance number) are entered into what look to be a safe site but really it is not. Retailers often need to order spare parts specially. for example by providing parts lists keyed by serial number. one of the main ones is fraud. This is where your details ( such cases. unsurprisingly. only with other ordering systems. and indeed Amazon. bank card number. Purchases of pornography and of other sex-related products and services fulfill the requirements of both virtuality (or if non-virtual.

Over-estimation of resource competence. Failure to consider the competitive situation. why they buy and how they has had success delivering groceries in the UK. the recycling program cheap cycle sells goods over the internet. Products less suitable for e-commerce include products that have a low value-to-weight ratio. or touch component. and processes handle the proposed strategy? Have e-tailer's failed to develop employee and management skills? These issues may call for thorough resource planning and employee training. E-commerce could potentially mitigate this potential problem with proactive and focused marketing research. just as in non-electronic commerce. Even a product with a sound value proposition can fail if producers and retailers do not understand customer habits. .E-commerce 45 identity. just as traditional retailers may do. industries and markets may mitigate some consequences here. Finally there are many problems with e commerce some of which are: Failure to understand customers. software. hardware. Tesco. What will competitors do? Will they introduce competitive brands or competitive web sites? Will they supplement their service offerings? Will they try to sabotage a competitor's site? Will price wars break out? What will the government do? Research into competitors. and motivations. taste. Can staff. expectations. Also. Inability to predict environmental reaction. and clothing sold through the internet is big business in the U. albeit that many of its goods are of a generic quality. products that have a smell. products that need trial fittings — most notably clothing — and products where colour integrity appears important. and commit more fraud crimes under your name. Nonetheless. but lack the capability to compete with Amazon. One may have the will to construct a viable book e-tailing business model.S.

Acceptance Consumers have accepted the e-commerce business model less readily than its proponents originally expected. Even in product categories suitable for ecommerce. electronic shopping has developed only slowly. This reward does not exist when one's purchase does not arrive for days or weeks. so that shipping costs remain low. Several reasons might account for the slow uptake. Many people will not use credit  cards over the Internet due to concerns about theft and credit card fraud. Lack of instant gratification with most e-purchases (non-  digital purchases). . Much of a consumer's reward for purchasing a product lies in the instant gratification of using and displaying that product. including: Concerns about security.E-commerce 46 but avoids the low value-to-weight ratio problem by creating different groups for various regions.

or to their cohorts: this social reward side of retail therapy does not exist to the same extent in online shopping. Large corporations mostly use it and their satellite suppliers working together over a private network called a Value Added Network (VAN). The social aspect of shopping. to other shoppers. These VAN offer reliability and security that is difficult to on the internet so far. Low penetration rates of Internet access in some sectors greatly reduce the potential for ecommerce. Inconsistent return policies among e-tailers or difficulties  in exchange/return. Poorly designed. communication. using computers and telecommunication links. E-commerce Technologies Some of the important E-commerce technologies are discussed as under: (1) Electronic Data Interchange: EDI is the preparation. and processing of business transactions and data electronically in a predefined structure format. Some people enjoy  talking to sales staff. bug-infested e-Commerce web sites  that frustrate online shoppers and drive them away.E-commerce 47 The problem of access to web commerce. with mailboxes for each . An EDI services provide maintains a VAN. mainly for  poor households and for developing countries.

or companies and consumers. EFT adds another dimension to EDI allowing for direct deposit of payments without Cheque writing. (2) Electronic Fund Transfer (EFT): It involves the electronic transmission of financing transactions (debit and credit) between banks. banks and consumers. banks and companies. Each participating company' has to run EDI translation software on its computers to convert EDI data in to formats used by the Company's data bases. bank-to-bank transfer). Examples of EFT Systems Banking and financial payments  Large-scale or wholesale payments (e. The provider stores' then forwards EDI messages between partners.E-commerce 48 business partner..g. . receiving. processing or canceling. The basics of EDI software are: shown in Diagram Store and Forward messages VAN Translation EDI standard messages EDI standard messages Business application Business application The Basics of EDI Software EDI service providers are now incorporating Internet services and open EDI as a new service of specifications for handling EDI on the Internet.



 Small-scale or retail payments (e.g. automated teller machines and
cash dispensers.
 Home banking (e.g. bill payment),
Retailing payments
 Credit Cards (e.g. VISA or MasterCard).
 Private label credit/debit cards,
Online electronic commerce payments
 Token-based payment systems Electronic cash (e.g. DigiCash)
Electronic Checks (e.g. Net Cheque)
 Smart cards or debit cards (e.g. Mondex Electronic Currency Card)
Credit card-based systems
 Encrypted credit cards (e.g., SSL CyberCash, or SET encryption)

Third-party authorization numbers (e.g. First Virtual)

(3) Debit cards: With a magnetic strip and an embossed identification
number, debit cards are used by consumers to obtain money from
automatic teller machines, to pay for goods or services at retail locations,
and to access home banking or bill payment services. The major point is
that debit cards provide no line of credit; purchases are directly debited to a



consumer's bank account, or to the prepaid amount encoded on the card.
Debit cards are a substitute for cash or a personal Cheque.
(4) Smart Cards: Smart Card is a plastic card with an embedded chip and a
tiny display that provides user with new password each time they log in a
system. The smart card (also called a memory card) is a portable datastorage device with provision for identity and security, it differs from the
prepaid telephone card, or debits card. It is very popular in Europe, because
it contains microprocessors and memory chips that provide intelligence
and the ability to store a significant amount of information. Smart Cards
are designed to replace the traditional magnetic strip credit or bank cards
introduced at the end of the 1960s. "Representatives of the financial





computer and health care industries are joining with government agencies
to create a multi-industry effort to accelerate the widespread use of smart
card technologies", (Smart Card Forum 1993),

Citibank & Chase Manhattan Bank Smart Card: In October, 1997,
Citibank and Chase Manhattan Bank launched a smart card. Primary
purpose of the joining forces was to promote inter operability of smart card
technology between MasterCard and VISA. Citibank and Chase Manhattan's
expectations were that most purchases made with the cash equivalent loaded
on the smart cards would be for $20 or less and this was basically confirmed
by the pilot test. For purchases greater than $20, consumers generally would
use their credit card. The program involved getting merchants to accept the



smart cards as cash payments. Regarding security of the smart cards, PIN are
required to download Cash, but not for purchases. If a consumer loses
his/her smart card, the amount stored is lost and can be used by anyone
processing the cards, the same as losing Cash.

(5) E-mail: Electronic mail (e-mail) provides for the electronic transmission
of letters, messages, and other documents. There is a large installed base of
email users in the corporate environment the learning curve has proved to
be relatively short for new Users,
(6) Bulletin Board Systems: Bulletin board systems, or BBS, are computer
networks accessible by modem that offers the facility for multiple
subscribers to use information electronically. They provide access to
computer files, games, email, discussion groups, and other services.

most heavily used technology in today's office. Bar codes allow numbers to be encoded in machine. Lotus Notes Mail. Its value is in its ability to link database. quickly and securely. which still provide the core information resource for most corporations. as well as other local or departmental databases.E-commerce 52 (7) Facsimile (Fax}: Facsimile technology is not new. (10) Bar codes: EAN (European Article Numbering) numbers which are used for identification items can be represented by bar codes. It is probably the least controlled. and  Distributing the images. such as Microsoft Mail. 1994). it has been around in one form or another since 1924 (Jenkins and Lancashire. In fact. Lotus cc: Mail. Much of the electronic forms software 3vailable today provides for links to transaction type databases. The data can then be captured automatically.readable form. (9) Electronic Image Processing: Electronic Image Processing is not a recent innovation. (8) Electronic forms and forms date interchange: Electronic forms or forms automation software enables users to fill in forms on a desktop computer. automatically save the information to various databases. and selectively route forms and data transparently across most popular e-mail systems. One of its biggest advantages is the enormous installed base. It is the result of bringing together several older technologies to facilitate the following:  Converting images from paper to electronic code:  Classifying images for later retrieval Storing the images. data collection. and data retrieval/presentation technologies. A bar code is a pattern of .

The Universal Product Code symbol. (ii) Open Buying on the Internet (OBI): This standard is created by the Internet purchasing round table. The data is then interpreted or decoded by the computer.E-commerce 53 parallel bars and spaces of predetermined widths representing . is familiar to most people in North America. that is then "read" by electronic scanners and transmitted either to a computer or to a storage device for subsequent transmission to a computer. which enables parties to communicate security over an insecure network such as internet. EDI is now finding the role on corporate web sites as well. E-commerce Standards Important standards of E-commerce are discussed as under: (i) Electronic Data Interchange (EDI): EDI is a common document structure designed to let large organizations transmit information over private networks. which was released . chosen as the industry standard for grocers. is supposedt6 ensure that all the different E-Commerce systems can talk to one another. (11) PKI Technology: The technology underlying e-trust is known as public key encryption or Public Key Infrastructure (PKI) and has been around for some time. PKI works by means of cryptographic keys issued in the form of digital certificates. Very briefly. Bar codes are used extensively in the retail sector.

and British Telecom. The idea behind it is to help consumers protect their privacy without banning online collection of marketing information. The first SET-enabled commerce is already being tested in Asia. SSL uses public key encryption. one of the strongest encryption methods around to protect data as it travels over the Internet. and payments. SSL was created by Netscape but now has been published in the public domain. (vi) Secure Electronic Transactions (SET): SET encodes the credit card numbers stored on merchants' servers. Open Market. 18M. (ii) The Open Trading Protocol (OTP): It is intended to standardize a variety of payments related activities including purchase agreements. (v) Secure Socket Layer (SSL): This protocol is designed to create a secure connection to the server. This standard. and Oracle. Hitachi. Sun Micro Systems. OPS let users create a personal profile of preferences and interests that they want to share with merchants. (iv) The Open Profiling Standard (OPS): A standard backed by Microsoft and Firefly. Intelsys. Receipts for purchases. Microsoft. created by Visa and MasterCard. It was created as a computing standard to OBI by a group of companies AT&T. enjoys wide support in the banking community. . is backed by leading technology companies such as Actra. Cyber cash.E-commerce 54 by OBI consortium. Oracle.

"The Internet is redefining the model for electronic commerce to one that supports the complete seller-to-buyer relationship. This model includes promoting and communicating company and product information to a global user base. accepting orders and payments of goods and services online. and engaging in on line collaboration for new product development". . delivering software and information products online. E-COMMERCE AND INTERNET According to Cathey J. Medich.E-commerce 55 (vii) Trust: This partnership of companies seeks to build public trust in ecommerce by putting a Good Housekeeping-style seal of approval on sites that do not violate consumer privacy. Providing ongoing customer support. Executive Director of Commerce Net.

E-commerce 56 Electronic Commerce Systems relay on the resources the Internet. Intranets. . Extranets access to inventory data bases by customers and suppliers. For example E-Commerce can include interactive marketing. and other computer networks to support every step of titles process. or Yahoo's Stores provide storefronts that are ready to go. and involvement in product developing via Internet news groups and E-mail Exchange. ordering. E-commerce Software Solution Solutions like Intershop's ePages. Extranets. Just pick a design and pop in your products: You are ready for business. Intranet access of customer records by sales representatives and customer service. iCat's Lemonade Stand. and payment processes on the World Wide Web.

such as Intershop 3. This approach will give you a standardized set at e-commerce features with a few additional business rules built in as a bonus. Advertising and awareness Marketing Post sale Merchandising CUSTOMER service Sales service Fulfillment sales transaction trahsaction processing Process of Sales.0 and iCat Professional. allow you to change standard templates that came with the packaged software so that you can customize the way your storefront will look and feel. & Marketing  Implementation of E-Commerce Solutions: There are three options: Option 1: Buy a ready-made system that closely matches your specifications.assuming you can "speak" their application languages. These solutions also let you extend the standard features and behaviors contained in the templates . If your .E-commerce 57 Other applications.

The solution may be a good fit now. There are a series of application engines out there to help you get these features. a lot of work has been done with Microsoft's Active Server Pages and Allaire's Cold Fusion development environments. Option 3: Build the system from scratch to your specifications. But you can create a commerce program in almost any programming language. Trying to add these new features may mean work and’ training in the software down the road. So if you want to offer discounts any time. The advantage is that you can build the features and functions you need to be unique and competitive in the marketplace. if you're considering this option. buy it! This will save you money and a good deal of time. you may want to think again. time. Many early Web-based business interfaces were created in Perl or C++. Pandesic has released a new platform based upon a . If the system is lacking some of your prioritized however. This approach will give you the exact solution you need but will require expertise. and a sizable budget to pull it off.E-commerce 58 business needs closely match what the package offers. They're fast because the: whole store is administered through the Web. Configure some settings. you just look. you'll need to take this approach. More recently. but will likely become obsolete as more and more features become later on in development. e-'commerce solution: These solutions are inexpensive and include many common features. Also. Be sure to budget for ahead of time. Then you're ready to go: instant storefront. and pour in your product information. Option 2: Rent space in a network-based. You don't need to install any software.

but insurance brokers. The threat to these intermediaries is that their customers will bypass them by obtaining information and meeting their purchasing needs through new.Effective Advertising  Keeping Track of Everything  Staying in E-Business Electronic Stock Trading Electronic commerce creates threats and opportunities for brokers and intermediaries of all kinds-not only travel agents. and brokers of food and mechanical parts as well.E-commerce 59 suite of e-commerce objects accessible through Active Server Page technology. stockbrokers. loan brokers. The major functions on a website includes  Displaying Products  Order and Transaction Processing  Attracting Customers  Fulfillment and Customer Service  Building Your Customer Base  Cost. .

Their stock and bond holdings and transactions could be tracked. A first step in electronic banking for consumers was the advent of automatic teller machines (ATMs) popularized by Citibank in the late 1970s. They could obtain customer service information about the status of buy and sell orders. Thanks to . touch tone phones. or human agents. How the traditional brokerages would respond and whether they could maintain their much higher cost structure remained to be seen. The opportunity for intermediaries is to use electronic commerce to create one of those new channels. By 1997 Web-based information and transaction capabilities spanned most of the customer involvement cycle for buying and selling stocks and bonds. thereby providing better service than a customer could otherwise obtain. Electronic Banking The banking industry relied on computers for decades before electronic banking created new way&> to provide service.E-commerce 60 online channels. Private investors could obtain readily available data and analysis software to identify stocks they wanted to buy and sell. Some of it could be accessed for free from the home pages of companies providing search engines and other services not specifically related to finance. Investors could make the purchases through Web transactions.

water. For example. Other banks banded together to produce their own network. electronic banking is more complicated than it might appear. the computer-to-computer transfers performed in electronic banking are more automatic and less expensive than processing paper checks for handling payment transactions. The electronic banking customer starts by identifying checks that are written to the same payee. Like many aspects of electronic commerce. increasing its local consumer market share from 4.5% to 13%. As happened in the Merrill Lynch case. the competition responded. the amount can be entered once and then transferred automatically each month. For fixed payments such as rent. electronic banking permits people to pay bills without writing checks. More recently. and which Citibank eventually Joined. In addition to providing history and bank balance information. assume that the payee is a . For the customer. which began operation in 1985. For the bank. the New York Cash Exchange.ATMs. Repeatedly. several national ATM networks permit customers to withdraw money from ATMs in all major cities in the United States and some cities abroad. Citibank tripled its depositors from 1978 to 1987. or NYCE. The electronic banking system makes it possible to enter the amount of the check and then have the bank transfer the money into the payee's account without ever handling a physical check. electricity. The next step in electronic banking for consumers is to provide additional banking 'services and transactions through personal computers linked to the Web or to private networks. and car payments. such as checks for rent.E-commerce 61 . these electronic banking functions eliminate the annoyance of balancing a checkbook and some of the uncertainty about whether or not the check arrived.

. To pay the bill. it may require that payments go to its accounts receivable department. specifically. SET is not itself a payment system. That bank may be out of state. a bank offering the electronic banking service must verify in advance that each payee is set up to receive funds in this manner. To minimize the chance that a payment transaction will be lost or delayed. the Internet. It may be noted that subsequent changes in the payee's banking relationships might result in confusion or lost payments. and the payee's accounts receivable system may not be set up to receive payments directed to its bank.E-commerce 62 national firm with many offices and a number of different bank accounts for different purposes. Electronic banking has advantages for people who write a lot of checks. This is especi311y important if the electronic banking service combines multiple transfers to a given bank into a single transfer accompanied by a list of all payments that are included. but for others it is simpler to slip physical checks into preaddressed reply envelopes. you need to specify which account at which bank should receive the funds. but rather a set of security protocols and formats that enables users to employ the existing credit card payment infrastructure on an open network in a secure fashion. Secure Electronic Transaction Secure Electronic Transaction (SET) is a standard protocol for securing credit card transactions over insecure networks.

IBM. and the credit-card companies. FUTURE EXPECTATION ABOUT THE E-COMMERCE . which provide a benefit for e-commerce. SET was said to become the de facto standard of payment method on the Internet between the merchants. Netscape. the buyers.E-commerce 63 SET was developed by VISA and MasterCard (involving other companies such as GTE. the merchant itself never has to know the credit-card numbers being sent from the buyer. Microsoft. RSA and VeriSign) starting in 1996. When SET is used.

many experts like Malay Sengupta. there will have to be business.E-commerce 64 The Internet serves a great number of functions and not all of them should be classified as e-Commerce. Although all commentators present forecasts for the short-term which contain truly eye-catching growth. Internet e-Commerce has changed the life of a few web entrepreneurs but its effect on the lives of most other people has been very slight. And yet no commentator doubts the power of electronic commerce to challenge those existing modes. For electronic commerce to deliver its full promise. In order to explain this paradox. let alone the future one. There is considerable disagreement about the historic impact of electronic commerce. very big or enormous. The e-Business applications of the Internet are developing but they are a long way from fulfilling the predictions of the pundits. MSTC . cost and infrastructure impediments. But nobody knows when.' DRIVING BUSINESS ON THE INTERNET E-commerce will be the key driver of the Indian economy & will be the key revenue stream for companies in the days to come. CMD. The e-Commerce guru of ICL put it thus: 'Everyone agrees that electronic commerce is going to be big. many observers allude to technical. their figures fail to achieve anything remotely approaching the size of existing modes of trade. social and cultural changes and these will take more than two or three years to complete.

& it’s not just the business to . WHY E-COMMERCE?  When MSTC has adopted e-commerce initiatives then it given them returns far above anyone’s expectations. 1.E-commerce 65 Ltd. & Dr Debesh Das. R S Pandey. the seminar on E-commerce organized by MSTC Limited with The Economics Times on June 22. 2009 in Kolkata have agreed in this statement.. 2004 & coal is now booked electronically. WB at the inaugural session of Ecom. Coal India went online on November 19. The other reason for the success of ecommerce  “It’s a paper-less process & it doesn’t give any unfair advantageous to any one party. & they gave their views in a different ways like: A case in point was host-company MSTC Limited that has successfully increased business manifold with the use of ecommerce. For example. IT Minister.”  “One major advantage that e-commerce users have now is that digital signatures are recognized by all courts of law & that electronic contracts are legally valid. Steel Secretary.

E-commerce 66 business format that is profiting for this.  The inter-state transactions were difficult to make & many suppliers were unwilling to do that last bit of door. the internet is slow & for bidders it takes long to just log on.”  Electronic fraud might even happen at a nightclub when the card is handed over to the cash counter. even customer buying daily-need product are turning largely to the internet. “& why not? If you can see 10 different TV sets on the net before choosing the one you want. Now people have started buying cars through the net which in itself is a pointer that electronic trade is here to stay.”  Security also remains a large issue especially when it comes to monetary transaction on the net. THE LOOPHOLES:  “In a country like India brandwidth is a major problem.”  “The poor power supply in various part of the country that makes e-trading difficult. you save the time of going to 10 different stores. . THE WAY FORWARD  E-Commerce is poised to take over the country in the next few years. “The cyber laws are still not equipped to bring a fraudulent person to book.step delivery that is crucial in the B to C.” 2. 3.

”  “The B to C sector has generated business worth Rs 2300 crore in 2007.” ELECTRONIC COMMERCE COMPANIES These companies make information available on line about their product and services. all of which are directly related to electronic commerce.E-commerce 67  “E-Commerce will be driven by personalized & niche thing hat are not available in stores. . & the growth has been 100 percent for the last 3 years. that in itself shows what E-Commerce is capable. These will make e-transaction safer & promoted e-commerce.”  “We have facilities like secured socket layering & firewalls that are impossible to hack.

CyberCash. http:// www. Checkfree Corporation http:// www. http:// www. ClickShop com http:// Provider of electronic payment services. Inc.cybercash.checkshop.cardsvc. .com Develop software to support foundations for electronic buying and selling. Cardservice international http:// www.E-commerce 68 Offer credit card services to internet merchants. Provider of payment service for the Offer electronic shopping cart software called shopping 770 to be added to electronic shop web pages.broadvision.

bofa. Inc. Bank of America http:// www. from simple information service to actual banking service. http:// A spin-off from RSADSI.E-commerce 69 Currently offering information services on line. of banks offering some type of service over the internet. Verisign provides public key certificates to individuals & companies. is growing Financial institutions The no. BIBLOGRAPHY The sources that contributed to this project are as follows:- .


as also in India.E-commerce 71 At last the conclusion comes that now a day -by. That means in the future e-commerce is one most important key factor to success of any ecommerce are getting lots of success. will play a major part in that. . So. Because e-commerce has become the buzzword for successful businesses across the world. The Indian economy is expected to even overtake the US economy by 2045 & e-commerce. it will be concluding that in the future e-commerce has growing faster. I am sure. Today many companies have adopted the e-commerce.