Articles - Étudiants SUPINFO
E- Commerce or Electronics Commerce is a methodology of modern
business , which addresses the need of business organizations, vendors an d
customers to reduce cost and improve the quality of goods and services while
increasing the speed of delivery. E - commerce refers to the paperless
exchange of business information using the following ways :
- Electronic Data Exchange (EDI)
- Electronic Mail ( e - mail)
- Electronic Bulletin Boards
- Electronic Fund Transfer (EFT)
- Other Network - based ologies
E - Commerce provides the following features :
- Non - Cash Paym ent : E - Commerce enables the use of credit
cards, debit cards, smart cards, electronic fund transfer via bank's
website , and other modes of electronics payment.
- 24x7 Service availability : E - commerce automates the business of
enterprises and the way they p rovide services to their customers . It is
available anytime, anywhere.
- Advertising / Marketing : E - commerce increases the reach of
advertising of products and services of busin esses. It helps in better
marketing management of products / services.
- Improved Sales : Using e - c ommerce, orders for the products can
be generated any time, any where without any human intervention. It gives
a big boost to existing sales volumes.
- Support : E - c ommerce provides various ways to provide pre -
sales and post - sales assistance to provide better services to
- Inventory Management : E - c ommerce autom ates inventory
management . Reports get generated instantly when required. Product
inventory management becomes very efficient and easy to maintain.
- Communication improvement : E - c ommerce provides ways for
faster, efficient, reliable communication with customers and
3 Traditional Commerce v/s E-Commerce
The advantages of e-commerce can be broadly classified into three
- Advantages to Organizations
- Advantages to Consumers
- Advantages to Society
Advantages to Organizations
Using e-commerce, organizations can expand their market to
national and international markets with minimum capital investment. An
organization can easily locate more customers, best suppliers, and
suitable business partners across the globe.
E-commerce helps organizations to reduce the cost to create
process, distribute, retrieve and manage the paper based information
by digitizing the information.
- E-commerce improves the brand image of the company.
- E-commerce helps organizations to provide better customer
- E-commerce helps to simplify the business processes and makes
them faster and efficient.
- E-commerce reduces the paper work.
- E-commerce increases the productivity of organizations. It
supports "pull" type supply management. In "pull" type supply
management, a business process starts when a request comes from a
customer and it uses just-in-time manufacturing way.
It provides 24x7 support. Customers can enquire about a
product or service and place orders anytime, anywhere from any
- E-commerce application provides users with more options and
quicker delivery of products.
- E-commerce application provides users with more options to
compare and select the cheaper and better options.
- A customer can put review comments about a product and can
see what others are buying, or see the review comments of other
customers before making a final purchase.
- E-commerce provides options of virtual auctions.
- It provides readily available information. A customer can
see the relevant detailed information within seconds, rather than
waiting for days or weeks.
- E-Commerce increases the competition among organizations and
as a result, organizations provides substantial discounts to
Customers need not travel to shop a product , thus less
traffic on road and low air pollution.
- E - c ommerce hel ps in reducing the cost of products , so
less affluent people can also afford the products.
- E - c ommerce has enabled rural areas to access services and
products , which are otherwise not available to them.
- E - c ommerce helps the gov ernment to deliver public
services such as health care, education, social services at a
reduced cost and in an improved manner.
E - Commerce 7 The disadvantages of e - commerce can be broadly
classified in to two major categories:
-Tec hnical disadvantages
-Non - t echnical disadvantages
There can be lack of system security,
reliability or standards owing to poor implementation of e - c
-The s oftware development industry is still
evolving and keeps changing rapidly.
-In many countries, network bandwidth might
cause an issue .
-Special types of w eb server s or other
software might be required by the vendor , setting the e - commerce
environment apart from network servers.
-Sometimes, it becomes difficult to
integrate an e - c ommerce software or website with existing
application s or databases.
-There could be software/hardware
compatibility issue s , as some e - c ommerce software may be
incompatible with some operating system or any other
Non - Technical
-Special types of w eb
server s or other software might be required by the vendor , setting
the e - commerce environment apart from network servers.
-Sometimes, it becomes
difficult to integrate an e - c ommerce software or website with
existing application s or databases.
-There could be
software/hardware compatibility issue s , as some e - c ommerce
software may be incompatible with some operating system or any other
component. Non - Technical Disadvantages
-Initial cost: The cost
of creating / building an e - c ommerce application in - house may be
very high. There could be delay s in launching an e - Commerce
application due to mistakes, and lack of experience.
-User resistance: User s
may not trust the site being an unknown faceless seller. Such mistrust
makes it difficult to conv ince traditional user s to switch from
physical stores to online/virtual
-Security/ Privacy: It
is d ifficult to ensure the security or privacy on online
-Lack of touch or feel
of products during online shopping is a drawback
-E - c ommerc e
applications are still evolving and changing rapidly.
-Internet access is
still not cheaper and is inconvenient to use for many potential
customers , for example, those living in remote
E - commerce business models can generally be categorized in
to the following categories.
-Business - to - Business (B2B)
-Business - to - Consumer (B2C)
-Consumer - to - Consumer (C2C)
-Consumer - to - Business (C2B)
-Business - to - Government (B2G)
-Government - to - Business (G2B)
-Government - to - Citizen (G2C
A w ebsite following the B2B business model sells its
product s to an intermediate buyer who then sells the product to
the final customer. As an example, a wholesaler places an o rder
from a company's website and after receiving the consignment,
sells the end - product to the final customer who comes to buy the
product at one of its retail outlets.
A website following the B2C business model sells its
product s directly to a customer. A customer can view the
products shown on the website . The customer can choose a
product and order the same. The w ebsite will then send a
notification to the business organization via email and the
organization will dispatch the product/goods to the
A website following the C2C business model helps
consumer s to sell their assets like residential property,
cars, motorcycles , etc. , or rent a room by publishing their
information on the website. Website may or may not charge the
cons umer for its services. Another consumer may opt to buy
the product of the first customer by viewing the
post/advertisement on the website.
In this model, a consumer approaches a website showing
multiple business organizations for a particular service.
The c onsumer places an estimate of amount he/she wants to
spend for a particular service. For example, the comparison
of interest rates of pers onal loan/ car loan provided by
various banks via website s . A b usiness organization who
fulfills the consumer's requirement within the specified
budget , approaches the customer and provides its
Business - to - Government
B2G model is a variant of B2B model. Such websites
are used by government s to trade and exchange information
with various business organizations. Such websites are
accredited by the governm ent and provide a medium to
businesses to submit application forms to the
Government - to - Business
E - Commerce 11 Consumer - to - Business I n this
model, a consumer approaches a website showing multiple
business organizations for a particular service. The c
onsumer places an estimate of amount he/she wants to
spend for a particular service. For example, the
comparison of interest rates of pers onal loan/ car loan
provided by various banks via website s . A b usiness
organization who fulfills the consumer's requirement
within the specified budget , approaches the customer
and provides its services. Business - to - Government
B2G model is a variant of B2B model. Such websites are
used by government s to trade and exchange information
with various business organizations. Such websites are
accredited by the governm ent and provide a medium to
businesses to submit application forms to the
government. Government - to - Business Government s use
B2G model website s to approach busi ness organizations.
Such websites support auctions, tenders , and
application submission functionalities
Government - to - Citizen
Government s use G2C model website s to approach
citizen in general. Such websites support auctions of
vehicles, machinery , or any other material. Such
website also provides services like registration for
birth, marriage or death certificates. The m ain
objective of G2C website s is to reduce the average
time for fulfilling citizen’s requests for various
E - c ommerce sites use electron ic payment ,
where electronic payment refers to paperless
monetary transactions. Electronic payment has
revolutionized the business processing by reducing
the paper work, transaction costs, and labor cost.
Being user friendly and less time - consuming than
manual processing, it helps business organization to
expand its market reach / expansion. Listed below
are s ome of the modes of electronic payments :
-E - Money
-Electronic Fund Transfer (EFT)
Payment using credit card is one of most
common mode of electronic payment. Credit card is a
small plastic card with a unique number attached
with an account. It has a magnetic strip embedded in
it that is used to read the credit card via car d
readers. When a customer purchases a product via
credit card, the credit card issuer bank pays on
behalf of the customer and the customer has a
certain time period after which he/she can pay the
credit card bill. It is usually in the credit card
monthly payment cycle. Following are the actors in
the credit card system.
-The card holder - Customer ,
-The merchant - seller of product who can
accept credit card payments ,
-The card issuer bank - card holder's bank ,
-The acquirer bank - the merchant's bank ,
-The ca rd brand - for example , V isa or
Credit Card Payment Process
Bank issues and activates a credit card to the
customer on his/her request
The c ustomer presents the credit card
information to the merchant s ite or to the merchant
from whom he/she want s to purchase a
Merchant validates the customer's identity by
asking for approval from the card brand
Card brand company authenticates the credit
card and pa ys the tran saction by credit. Merchant
keeps the sales slip
Merchant submits the sales slip to acquirer
banks and gets the service charge s paid to
Acquirer bank requests the card brand company
to clear the credit amount and gets the payment
Now the card brand company asks to clear the
amount from the issuer bank and the amount gets
transferred to the card brand company
Debit card, like credit card , is a small
plastic card with a unique number mapped with the
bank accoun t number. It is required to have a bank
account before getting a debit card from the bank.
The major difference between a debit card and a
credit card is that in case of payment through debit
card, the amount gets deducted from the card's bank
account imm e diately and there should be sufficient
balance in the bank account for the transaction to
get completed ; w hereas in case of a credit card
transaction, there is no such compulsion. Debit
cards free the customer to carry cash and cheques .
E ven merch ants accept a debit card readily. Having
a restriction on the amount that can be withdrawn in
a day using a debit card helps the customer to keep
a check on his/her spending .
Smart card is again similar to a credit card
or a debit card in appearance , but it has a small
microprocessor chip embedded in it. It has the
capacity to store a customer ’s work - related
and/or personal information. Smart card s are also
used to store money and the amount gets deducted
after every transaction.
Smart card s can only be accessed using a PIN
that every customer is assigned with . Smart cards
are secure , as they store information in encrypted
format and are less expensive/p rovides faster
processing. Mondex and Visa Cash cards are examples
of smart cards.
E - Money transactions refer to situation
where payment is done over the network and the
amount gets transferred from one financial body to
another financial body wit hout any involvement of a
middleman. E - money transactions are faster,
convenient , and saves a lot of time. Online
payments done via credit card s , debit card s , or
smart card s are examples of e - money transactions.
Another popular example is e - cash. In case o f e -
cash, both customer and merchant have to sign up
with the bank or company issuing e - cash.
It is a very popular electronic payment method
to transfer money from one bank account to another
bank account. Accounts can be in t he same bank or
different bank s . Fund transfer can be done using
ATM (Automated Teller Machine) or using a computer.
Now a day s , internet - based EFT is getting
popular . In this case, a customer uses the website
provided by the bank , log s in to the bank's
website and registers another bank account. He/she
then places a request to transfer certain amount to
that account. Customer's bank transfers the amount
to other account if it is in the same bank ,
otherwise the transfer request is forwarded to an
ACH (Automated Clearing House) to transfer the
amount to other account and the amount is deducted
from the customer's account. Once the amount is
transferred to other account, the customer is
notified of the fund transfer by the bank
Security is an essential part of any
transaction that takes place over the internet.
Customer s will lo se his/her faith in e - business
if its security is compromised. Following are the
essential requir e ments for safe e -
Confidenti al ity - Information should not be
accessible to an unauthorized person. It should not
be intercepted during the transmission.
-Integrity - Information
should not be altered during its transmission over
- Availability - Information should be avail
able wherever and whenever require d within a time
- Authenticity - There should be a mechanism
to authenticate a user before giving him/her an
access to the required information.
-Non - Repudiabi l ity - It is the protection
against the denia l of order or denial of payment.
Once a sender sends a message, the sender should not
be able to deny sending the message. Similar l y ,
the rec ipient of message should not be able to deny
the receipt. - Encryption - Information should be
encrypted and decrypt ed only by an authorized user.
-Auditability - Data should be recorded in
such a way that it can be audited for integrity
Measures to ensure Security
Major security measures are the following:
- Encryption - It is a very effective and
practical way to safeguard the data being
transmitted over the network. Sender of the
information encrypt s the data using a secret code
and only the specified receiver can decrypt the data
using the same or a different secret code.
- Digital Signature - Digital si gnature
ensures the authenticity of the information. A
digital signature is a n e - signature authenticated
through encryption and password.
- Security Certificates - Security certificate
is a unique digital id used to verify the identity
of an indivi dual website or user.
Article Source: tutorials point