e-Business and e- Commerce:Electronic payment processes,e-commerce application trends and Web store requirements.

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6.1Electronic payment processes

Payments for the products and services purchased are an obvious and vital step in the electronic commerce transaction process. Concerns of electronic payments and security include:

• The near-anonymous electronic nature of transactions taking place between the networked computer systems of buyers and sellers, and the security issues involved.

• Electronic payment process is complex because of the wide variety of debit and credit alternatives and financial institutions and intermediaries that may be part of the process.

• Varieties of electronic payment systems have evolved. New payment systems are being developed and tested to meet the security and technical challenges of electronic commerce over the Internet.

Web Payment Processes

Most e-commerce systems on the Web involving businesses and consumers (B2C) depend on credit card payment processes. But many B2B e-commerce systems rely on more complex payment processes based on the use of purchase orders. Both types of e-commerce typically use an electronic shopping cart process, which enables customers to select products from website catalog displays and put them temporarily in a virtual shopping basket for later checkout and processing.

Electronic Funds Transfer

Electronic funds transfer (EFT) systems are a major form of electronic commerce systems in banking and retailing industries.EFT systems use a variety of information technologies to capture and process money and credit transfers between banks and businesses and their customers.

Secure Electronic Payments

Security measures including encrypting data passing between customer and merchant, encrypting data passing between customer and company authorizing the credit card transaction, and taking sensitive information off-line

When any customer makes an online purchase on the Internet, the credit card information is vulnerable to interception by network sniffers, software that easily recognizes credit card number formats. Several basic security measures are being used to solve this security problem. They include:

• Encrypt (code and scramble) the data passing between the customer and merchant.

• Encrypt the data passing between the customer and the company authorizing the credit card transaction.

• Take sensitive information offline

Security methods developed include,

• Secure Socket Layer (SSL) - automatically encrypts data passing between the Web browser and a merchant’s server.

• Digital Wallet – adding security software add-on modules to the Web browser. This enables the browser to encrypt credit card data in such a way that only the bank that authorizes credit card transactions for the merchant can see it.

• Secure Electronic Transaction (SET) - software encrypts a digital envelope of digital certificates specifying the payment details for each transaction. SET is expected to become the dominant standard for secure electronic payments on the Internet.

6.2e-commerce application trends

E-commerce is changing how companies do business both internally and externally with their customers, suppliers, and other business partners. How companies apply e-commerce to their business is also subject to change as their managers confront a variety of e-commerce alternatives.

E-Commerce Trends

Fig 6.3 represents some of the trends of e-commerce applications

• B2C e-commerce has moved from merely offering multimedia company information (brochureware), to offering e-commerce services at Web storefront sites with electronic catalogs and online sales.

• Interactive marketing capabilities have been added to support a personalized e-commerce experience, and a totally integrated Web store that completely supports a variety of customer shopping experiences.

• B2C e-commerce is moving toward a self-service model where customers configure and customize the products and services they wish to buy.

• B2B e-commerce started with website support of business customer self-service, and is moving toward automated intranet and extranet procurement systems.

• B2B e-commerce participants were early users of extranets connecting trading partners, and are now moving strongly toward the use of e-commerce portals that provide auctions, exchange, and barter markets for business customers within or across industries.

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Business-to-Consumer e-Commerce

Electronic commerce on the Internet between businesses and consumers is accelerating the impact of information technology on consumer behaviour and business processes and markets.

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e-Commerce Success Factors

A basic fact of Internet retailing (E-tailing) is that all websites are created equal as far as the “location, location, location” imperative of success in retailing is concerned. No site is any closer to its customers and competitors offering similar goods and services are only a mouse click away. This makes it vital that businesses find ways to build customer satisfaction, loyalty, and relationships, to keep customers coming back to their Web stores. The key to e-tailing success is to optimize factors such as:

• Selection and Value – businesses must offer attractive product selections, competitive prices, satisfaction guarantees, and customer support after the sale.

• Performance and service efficiency– fast, easy navigation, shopping, and purchasing, and prompt shipping and delivery.

• Look and feel of the site– attractive web storefront, website shopping areas, multimedia product catalog pages, and shopping features.

• Advertising and incentives to purchase– targeted web page advertising and e-mail promotions, discounts and special offers, including advertising at affiliate sites.

• Personal attention– personal web pages, personalized product recommendations, Web advertising and e-mail notices, and interactive support for all customers.

• Community relationships– giving online customers with special interests a feeling of belonging to a unique group of like minded individuals helps to build customer loyalty and value. Promote virtual communities of customers, suppliers, company representatives, and others via newsgroups, chat rooms, and links to related sites.

• Security and Reliability – security of customer information and website transactions, trustworthy product information, and reliable order fulfillment.

6.3Web store requirements

Most business-to-consumer e-commerce ventures take the form of retail business sites on the World Wide Web. The primary focus of such e-tailers is to develop, operate, and manage their websites to they become high-priority destinations for consumers who will repeatedly choose to go there to buy products and services.

Developing a Web Store

• Build website using simple website design tools

• Market website to attract visitors and transform them into loyal Web customers

Serving Customers

• Serve customers by creating user profiles, customer files, personal Web pages and promotions that help develop a one-to-one relationship.

• Transact with customers by providing dynamically changing catalog, fast catalog search engine, and convenient shopping cart system integrated with promotions, payment, shipping, and account information

• Support customers with help menus, tutorials, FAQs and e-mail correspondence with customer service representatives.

Managing a Web Store

• Manage both the business and the website

• Operate twenty-four hours a day, seven days a week

• Protect Web store transactions and customer records, and repel hacker attacks and other security threats.

Business-to-Business e-Commerce

Business-to-business e-commerce is the wholesale and supply side of the commercial process, where businesses buy, sell or trade with each other businesses. B2B e-commerce applications involve electronic catalog, electronic trading systems such as exchange, and auction marketplaces that use Internet, intranet, and extranet websites and portals to unite buyers and sellers. Many businesses are integrating their Web-based e-commerce systems with their e-business systems for supply chain management, customer relationship management, and online transaction processing, as well as to their traditional, or legacy, computer-based accounting and business information systems. This ensures that all electronic commerce activities are integrated with e-business processes and supported by up-to- date corporate inventory and other databases, which in turn are automatically updated by Web sales activities.

Many B2B e-commerce portals are developed and operated for a variety of industries by third- party market-maker companies called infomediaries, which may represent consortiums of major corporations.

e- Commerce Marketplaces

The five major types of e-commerce marketplaces are,

• One to Many – sell-side marketplaces. Host one major supplier who dictates product catalog offerings and prices. eg:Dell.com

• Many to One – buy-side marketplaces .Attract many suppliers that flock to these exchanges to bid on the business of a major buyer.

• Some to Many – distribution marketplaces. Unite major suppliers who combine their product catalogs to attract a larger audience of buyers.

• Many to Some – procurement marketplaces. Unite major buyers who combine their purchasing catalogs to attract more suppliers and thus more competition and lower prices.

• Many to Many – auction marketplaces used by many buyers and sellers that can create a variety of buyers’ or sellers’ auctions to dynamically optimize prices. eg: ebay.com

Benefits of E-commerce To Organizations-

• Expanding market place to national and international

• Shortens or even eliminates marketing distribution channels

• Allows lower inventories by facilitating pull type Supply chain

• Helps small businesses compete against large companies

• Decreases the cost of creating , processing, distributing, storing and retrieving information by digitizing

To Customers-

• Can conduct quick online price comparisons

• Gives more choices

• Transact from any location

• Delivers relevant and detailed information in seconds

• Enables consumers to get customized products

To Society –

• Less travelling resulting in less road traffic and lower air pollution

• People from rural areas can enjoy products and services that are otherwise not available

• Chances of reduction in fraud increasing the quality of social services

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