FILE ON

E-COMMERCE

Submitted to: Submitted by:

Mrs. Mukesh Monika
Class – BBA 6th sem
Roll No. -1384720014
University Roll No. –

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GOVT. PG COLLEGE FOR WOMEN, ROHTAK

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 INDEX
S. No. Contents Page No.

1. Introduction of e-commerce
⦁ Meaning of e-commerce
⦁ Characteristics of e-commerce 4-9
⦁ Types of e-commerce
⦁ Advantages of e-commerce ⦁

2. Electronic Payment System

⦁ Introduction to e-payment
⦁ Characteristics of e-payment 10-15
⦁ Benefits of e-payment
⦁ Drawbacks of e-payment
⦁ Types of e-payment

3. E Retailing
. ⦁ Features of virtual organisation 15-19
⦁ Characteristics of e-retailing
⦁ Disadvantage of virtual organisation
4. Virtual Organization
⦁ Meaning of virtual organization
⦁ Definition of virtual organization 19-28
⦁ Features of virtual organization
⦁ Types of virtual organization
⦁ Advantages of virtual organization
⦁ Disadvantages of virtual organization

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 5. Network Security
⦁ Meaning of Network Security 24-27
⦁ Dimensions of Network Security
⦁ Threats of Network Security
⦁ Ways to improve Network Security

E – COMMERCE

Introduction to e -commerce

Electronic commerce, or e-commerce, is a type of business model, or

segment of a larger business model, that enables a firm or individual to
conduct business over an electronic network, typically the internet.
Electronic commerce operates in all four of the major market segments:

⦁ Business to business

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 ⦁ Business to consumer

⦁ Consumer to consumer

⦁ Consumer to business

⦁ Business to business or B2B commerce is a type of between

manufacturers and wholesalers or wholesalers and retailers. Business
to business refers to the business between the company rather than the
company and personal consumption.

⦁ Business to Customer or B2C is also the trading between consumers.

For example: to promote their products or services to the users
directly between business and transaction.

⦁ Customer to Customer or C2C is the promotion and interaction

between benefit and customer. Customer to customer is to provide
location and talk to people, exchange and trading with other people.

When implemented properly, e-commerce is often faster, cheaper and more

convenient than the traditional methods of bartering goods and services.

Electronic transactions have been around for quite some time in the form of
Electronic Data Interchange or EDI. EDI requires each supplier and
customer to set up a dedicated data link (between them), where e-commerce
provides a cost-effective method for companies to set up multiple, ad-hoc
links. Electronic commerce has also led to the development of electronic
marketplaces where suppliers and potential customers are brought together
to conduct mutually beneficial trade.

E-commerce has allowed firms to establish a market a market presence, or

to enhance an existing, market position, by providing a cheaper and more
efficient distribution chain for their products or services. One example of a
firm that has successfully used e-commerce is Target. This mass retailer not
only has physical stores, but also has an online store where the customer can

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buy everything from clothes to coffee makers to action figures.

Features of e-commerce:-
⦁ Ubiquity- The traditional business market is a physical place, access
to treatment by means of document circulation. For example, clothes
and shoes are usually directed to encourage customers to go
somewhere to buy. E-commerce is ubiquitous meaning that it can be
everywhere. E-commerce is the world to reduce cognitive energy
required to complete the task.

⦁ Global Reach- E-commerce allows business transactions on the cross

country bound can be more convenient and more effective as
compared with the traditional commerce. On the e-commerce
businesses potential market scale is roughly equivalent to the network
the size of the world’s population.

⦁ Universal Standards- E-commerce technologies is an unusual

feature, is the technical standard of the Internet, so to carry out the
technical standard of e-commerce is shared by all countries around
the world standard. Standard can greatly affect the market entry cost
and considering the cost of the goods on the market. The standard can
make technology business existing become more easily, which can
reduce the costs, technique of indirect costs in addition can set the
electronic commerce website.

⦁ Richness- Advertising and branding are an important part of

commerce. E-commerce can deliver video, audio, animation,
billboards, signs and etc. However, it’s about as rich as television
technology.

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 ⦁ Interactivity- 20th century electronic commerce business technology
is called interactive, so they allow for two-way communication
between businesses & consumers. Interactivity means interactions
between parties.

⦁ Information Density- The density of information the Internet has

greatly improved, as long as the total amount and all markets,
consumers and businesses quality information. The electronic
commerce technology, reduce the information collection, storage,
communication and processing cost.

⦁ Personalization- E-commerce technology allows for personalization.

Business can be adjusted for a name, a person’s interests and past
purchase message objects and marketing message to a specific
individual. The technology also allows for custom. Merchants can
change the product or service based on user preferences, or previous
behaviour.

Types of e-commerce
There are six basic types of e-commerce –

⦁ Business-To-Business (B2B): B2B e-commerce refers to all

electronic transactions of goods and sales that are conducted between
two companies. This type of e-commerce typically explains the
relationship between the producers of a product and the wholesalers

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 who advertise the product for purchase to consumers. Sometimes this
allows wholesalers to stay ahead of their competition.

⦁ Business-To-Consumer (B2C): Perhaps the most common form of e-

commerce, B2C e-commerce deals with electronic business
relationships between businesses and consumers. Many people enjoy
this avenue of e-commerce because it allows them to shop around for
the best prices, read customer reviews and often find different
products that they wouldn’t otherwise be exposed to in the retail
world. This e-commerce category also enables businesses to develop
a more personalized relationship with their customers.

⦁ Consumer-To-Consumer (C2C): This level of e-commerce

encompasses all electronic transactions that take place between
consumers. Generally, these transactions are provided by online
platforms (such as PayPal), but often are conducted through the use of
social media networks (Facebook marketplace) and websites
(Craigslist).

⦁ Consumer-To-Business (C2B): Not the most traditional form of e-

commerce, C2B e-commerce is when a consumer makes their services
or products available for companies to purchase. An example of this
would be a graphic designer customizing a company logo or a
photographer taking photos for an e-commerce website.

⦁ Business-To-Administration (B2A): This e-commerce category

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 refers to all transactions between companies and public
administration. This is an area that involves many services,
particularly in areas such as social security, employment and legal
documents.

⦁ Consumer-To-Administration (C2A): Another popular e-commerce

category, C2A e-commerce encompasses all electronic transactions
between individuals and public administration. Examples of this
include taxes (filing tax returns) and health (scheduling an
appointment using an online service).

Advantages of e-commerce
⦁ Speed up the buying process and save time for consumers.

⦁ Personalize the store as per the customer expectation.

⦁ Reduce recurring cost while hiring virtual support resources.

⦁ Easily retarget your customers.

⦁ Easier to encourage an impulse buy.

⦁ Reviews available.

⦁ Able to provide detailed information to the customer.

⦁ Best quality of services in reasonably low operation cost.

⦁ Provide flexibility to the customer to buy product 24/7

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 Electronic Payment System

An e-payment system is a way of making transactions or paying for goods

and services through an electronic medium, without the use of checks or
cash. It’s also called an electronic payment system or online payment
system.

The electronic payment system has grown increasingly over the last decades
due to the growing spread of internet-based banking and shopping. As the
world advances more with technology development, we can see the rise of
electronic payment systems and payment processing devices. As the online
payment mechanisms increase, improve, and provide ever more secure
online payment transactions the percentage of check and cash transactions
will decrease.

Electronic payment is a financial exchange that takes place between buyers

and sellers. The content of this exchange is usually some form of digital
financial instrument (such as encrypted credit card numbers, electronic
cheques or digital cash) that is backed by a bank or an intermediary, or by a
legal tender. The various factors that have led the financial institutions to
make use of electronic payments are:

⦁ Decreased technology cost: The technology used in the networks is

decreasing day by day, which is evident from the fact that computers are
now dirt-cheap and internet is becoming free almost everywhere in the
world.

⦁ Reduced operational and processing cost: Due to reduced technology

cost, the processing cost of various commerce activities becomes very less.
A very simple reason to prove this is the fact that in electronic transactions
we save both paper and time.

Characteristics of internet payment system:-

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database.

9) User-friendliness: The process of digital payments is extremely user-friendly.

There are fewer steps for the full transaction process making it an easy process for
payment by the customer.

10) Easy integration: It must be integrated with existing systems and applications.
Even the security module should be integrated with the same payment system. So
that people find it easy to use this methodology.

11) Tracking spends: Digital data is automatically generated after each payment.
Even the customers will be able to track transaction records. Spending should be
controlled in this way.

12) Convenience: For this payment method, people do not have to visit any store
or institutions. Customers will be able to pay for his/her convenient place. In fact,
this service is available 24*7.

13) Low operational cost: For cash transaction employees are necessary. But
in digital payments, everything is automatic. So such an amount of employees is
not necessary. Hence, the operational cost is less in this payment method.

14) Feedback: From digital payment system, the service provider can take quick
feedback also. It will help them for further improvement of the system.

How does online payment mechanism work?

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Digital Payment Settlement under online marketing:

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 ⦁ Different types of e-commerce payment systems:-

⦁ Credit Card

The most popular form of payment for e-commerce transactions is through

credit cards. It is simple to use; the customer has to just enter their credit
card number and date of expiry in the appropriate area on the seller’s page.
To improve the security system, increased security measures, such as the use
of a card verification number (CVN), have been introduced to online credit
card payments. The CVN system helps detect fraud by comparing the CVN
number with the cardholder’s information.

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 ⦁ Debit Card

Debit cards are the largest e-commerce payment medium in India.

Customers who want to spend online within their financial limits prefer to
buy with their Debit cards. With the debit card, the customer can only pay
for purchased goods with the money that is already there in his/her bank
account as opposed to the credit card where the amounts that the buyer
spends are billed to him/her and payments are made at the end of the billing
period.

⦁ Smart Card

It is a plastic card embedded with a micro-processor that the customer’s

personal information stored in it and can be loaded with funds to make
online transactions and instant payment of bills. The money that is loaded in
the smart card reduces as per the usage by the customer and has to be
reloaded from his/her bank account.

⦁ E-Wallet

E-Wallet is a prepaid account that allows the customer to store multiple

credit cards, debit card and bank account numbers in a secure environment.
This eliminates the need to key in account information every time while
making payments. Once the customer has registered and credited e-wallet
profile, he/she can make payments faster.

⦁ Net banking

This is another popular way of making e-commerce payments. It is a special

way of paying for online purchases directly from the customer’s bank. It
uses a similar method to the debit card of paying money that is already in
the customer’s bank. Net banking doesn’t require the user to have a card for
payment purposes but the user needs to have a card for payment purposes
but the user needs to register with his/her bank for the net banking facility.
While completing the purchase, the customer just needs to put in their net
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 E-RETAILING

Introduction to e-retailing
The e-retailing(less frequently; e-Retailing, e-Tailing, etc.) is the concept of selling of
retail goods using electronic media, in particular, the internet. The vocabulary electronic
retailing that used in internet discussions as early as 1995, the term seems an almost in
evitable addition to e-mail, e-business and e-commerce, etc.

E-retailing is synonymous with business-to- consumer (B2C) transaction model of e-

commerce. Although e-retailing is an independent business model with certain specific
constituents like; trust model, electronic transaction process, etc, but in reality it is a
subset of e-commerce by nature.

E-Retailing stores sell online promotion only for goods that can be sold easily online, e.g.,
Amazon did for Books & CDs, etc. The online retailing require lots of displays and
specification of products to make the viewers have a personal feel of the product and its
quality as he gets while physically present in a shop.

E-Retailing refers to retailing over the internet. Thus an e-Retailing is a B2C (Business to
customer) business model that executes a transaction between businessman and final
consumer. E-Retailers can be pure play businesses like amozon.com or businesses that
have evolved from a legacy business such as tesco.com. The e-retailing is a subset is a
subset of e-commerce. Thus, e-commerce is the master domain defining the e-retailing
operation.

Essentials of E-Retailing
Electronic retailing or e-tailing, as it is generally being called now, is the direct sale of
products, information and service through virtual stores on the web, usually designed
around an electronic catalogue format and auction sites. There are thousands of
storefronts or e-commerce sites on the Internet that are existing retailers or start-ups.
Penetration of computers and proliferation of the Internet has given rise to many new

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forms of businesses, such as business process outsourcing, call centre based customer
based customer relationship management, medical transcription, remotely managed
educational and medical services and of course, electronic retailing.

There are certain essential ingredients for an electronic retailing business to be successful.
One must consider these components well in advance before setting up an electronic
storefront. These essential components are:

. Attractive business-to-consumer (B2C) e-commerce portal

. Right revenue model

. Penetration of the Internet

E-Catalog It is a database of products with prices and available stock.

Shopping cart The customers select their goodies and fill shopping cart. Finally, as in a
real store, at the time of checkout, the system calculates the price to be paid for the
products.

A payment gateway customer makes payments through his/her credit card or e-cash. The
payment mechanism must be fully secure.

The electronic retail business requires support services, as a prerequisite for successful
operations. These services are required to support the business, online or offline,
throughout the complete transaction-processing phases. The following are the essential
support services;

. Communication backbone

. Payment mechanism

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. Order fulfilment

Types of e-retailing

Interactive Systems in e-retailing

This kind of e-retailing system permits tow way interactions and consists of promotional
touch screen booths or internet and kiosks for components such as holiday or airline
bookings. Some systems can describe the product in use. In case of touch screens
systems, they permit further inquiries or give printouts from the database. A feature of
both systems is that a credit card can be used in order to protect the sale.

Passive systems in e-retailing

These are non interactive one way media, where the retailer can decide upon the timing
and content of messages. They include entire one way communication media forms such
as clubs on television, shopping pages or one way cable systems. The form of selling
using passive systems consist of electronic media or video catalogs which describe the
product in use or offers further information.

Technology today has seen a wide development so as to facilitate the electronic retailing
function properly for both online businesses and consumers (sople, 2009). The electronic
retailer, in order to make the retailing process a success has to make several decisions
regarding how online business will function. However, all decision must be talen over
and against the principles guiding direct marketing.

Characteristics of e-retailing

⦁ Ease of Navigation

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 The website should make it easy for the user to find what they’re looking foe without
a lot of distractions. Minimize clutter, get rid of the extra drop-down menus, and just
make things straightforward. Limit the number of categories by including
subcategories under the main once.

⦁ Minimal Design
The retail websites that greet the user with loud music and eclectic colors are sure to
get a click away before the user even peruses the products. Keep things simple and
easy on the eye. Customer want to get quickly to what they want to purchase, without
a lot of hype and production.

⦁ Easy Checkout
Asking customer to navigate four to five screens deep just to pay for their wares will
only frustrate them. Successful online stores make the checkout pleasant and easy
by keeping the steps simple, but also by capturing the essential information in a succinct
faction.

⦁ Product Showcase and Promotion

What makes a repeat customer? Product promotions and sales, of course! By keeping
sales products or featured products in a prominent place on the site, customers look
forward to shopping. Product showcases can also entice customers to buy a product
that they weren’t intending to buy, but were impressed by when they saw it.

⦁ Accurate Product Descriptions

Customer can’t touch or hear the products on the retail website. Therefore, it’s
important to be as descriptive and accurate as possible so they feel comfortable
making their purchase. Successful sites take the extra steps to provide high-definition
images and accurate product descriptions.

Advantages of e-retailers

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E-tailing helps traditional brick-and-mortar stores reach more consumers worldwide
and increase sales. While Individual and start-up e-tailers may be launched from a
single room with one computer and expand rapidly rather than pay for an entire
building with expensive overhead. Here are some of the listed benefits with every e-
tailer.

⦁ Customers comfort and tracing

E-tailers may trace consumers’ shopping behaviour while gaining valuable insights
into their spending habits, which may lead to increased revenue. In addition,
customers shop from the comfort of their homes at any time rather than being
physically present in the store during specific hours.

⦁ Efficiency
E-commerce is an efficient retail method for business transactions. Start-up costs for
establishing an e-commerce business is far less than expanding your business with
more brick and mortar locations. Fewer licenses and permits are required to start an
online business than that of a physical store location. You will also save money by
using fewer employees to perform operations such as managing inventory and billing
customers.

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⦁ Privacy
Some consumers are reluctant to embrace e-commerce because of privacy 7 issues.
Making an online purchase often requires disclosing personal information such a an
address, telephone number, and banking or credit card account information. While
many people feel making an online purchase does not compromise their personal
information, some still prefer not to take a chance of having their account information
accessed by a third party, and will only make their purchases at a storefront operation.

⦁ Unfamiliarity
There are always going to be people who prefer to do their shopping a brick and
mortar location. Some people are resistant to change and may not want to embrace e-
commerce due to a lack of knowledge about the process or a general reluctance to
purchase an item they cannot physically examine. If the product does not meet the
customer’s expectations in some way, such as being the wrong size or defective, he
must then spend time sending it back and waiting for the replacement product to
arrive.

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 VIRTUAL ORGANISATION

Introduction:

This new form of organisation, i.e., ‘virtual organisation’ emerged in 1990

and is also known as digital organisation, network organisation or modular
organisation. Simply speaking, a virtual organisation is a network of
cooperation made possible by, what is called ICT, i.e. Information and
Communication Technology, which is flexible and comes to meet the
dynamics of the market.

Alternatively speaking, the virtual organisation is a social network in which

all the horizontal and vertical boundaries are removed. In this sense, it is a
boundary less organisation. It consists of individual’s working out of
physically dispersed work places, or even individuals working from mobile
devices and not tied to any particular workspace. The ICT is the backbone
of virtual organisation.

It is the ICT that coordinates the activities, combines the workers’ skills and
resources with an objective to achieve the common goal set by a virtual
organisation. Managers in these organisations coordinate and control
external relations with the help of computer network links. The virtual form
of organisation is increasing in India also. Nike, Reebok, Puma, Dell
Computers, HLL, etc., are the prominent companies working virtually.

⦁ Features of virtual organisation:

Technology:
New technology has transformed the traditional ways of working. In

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particular, the worlds of computing and telephony are coming together to
open up a whole new range of responsibilities. Computer Telephony
Integrations (CTI) will usher in a new revolution to the desktop. The CTI
has traditionally been used in all call centre applications.

E-mail Integration:
Integrating Short Message Service (SMS) into the existing e-mail
infrastructure allows the whole organisation to take advantages of SMS
products such as ‘Express Way’.

Office System Integration:

SMS technology can greatly enhance the existing or new office systems, e.
g., phone messages can be sent via SMS rather than returning it in a
message book.

Voice Mail Alert:

SMS technology added to the existing voice mail system builds an effective
method of receiving voice mail alerts.

Mobile Data:
This enables a laptop to retrieve information anywhere through the mobile
phone network. Mobile data communications revolutionize where and how
work is done. In the past, corporate information has been inaccessible from
many places where it is needed. One’s ability to link laptop to mobile phone
keeps one connected to his/her virtual organisation from anywhere.

⦁ Advantages of virtual organization:

1. It saves time, travel expenses and eliminates lack of access to experts. 2.

Virtual teams can be organised whether or not members are in reasonable

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proximity to each other.

3. Use of outside experts without incurring expenses for travel, logging and
downtime.

4. Dynamic team membership allows people to move from one project to

another.

5. Employee can be assigned to multiple, concurrent teams.

6. Teams’ communication and work reports are available online to facilitate

swift responses to the demands of the (global) market.

7. Employees can accommodate both personal and professional lives.

8. Virtual teams allow firms to expand their potential labour markets

enabling them to hire and retain the best people regardless of their physical
locations.

⦁ Disadvantages of virtual organization:

1. The lack of physical interactions with its associated verbal and non-
verbal cues and also the synergies that often accompany face-to-face
interaction

2. Non-availability of paraverbal and non-verbal cues such as voice, eye

movement, facial expression, and body language which help in better
communication.

3. Ability to work even if the virtual teams are miles apart and the members
have never or rarely met each other face-to-face.

But the fact remains that despite these drawbacks; virtual organisations have

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become a reality and are growing in popularity. By now, several successful
cases of virtual organisations abound in our country. It is the explicitly
designed ‘Group Ware’, computer based system to support virtual groups,
enables the virtual organisations to work in order to achieve a common goal.

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 NETWORK SECURITY

Network security is the practice of preventing and protecting against

unauthorized intrusion into corporate networks. As a philosophy, it
complements endpoint security, which focuses on individual
devices; network security instead focuses on how those devices interact, and
on the connective tissue between them.

⦁ Dimensions of E-commerce Security:

⦁ Threats to network security:

⦁ The Risk of Fraud: An electronic payment system has a huge risk of

fraud. The computing devices use an identity of the person for
authorizing a payment such as passwords and security questions.
These authentications are not full proof in determining the identity of
a person. If the password and the answers to the security questions are
matched, the system doesn't care who is on the other side. If someone
has access to our password or the answers to our security question, he
will gain access to our money and can steal it from us.

⦁ The Risk of Tax Evasion: The Internal Revenue Service law

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 requires that every business declare their financial transactions and
provide paper records so that tax compliance can be verified. The
problem with electronic systems is that they don't provide cleanly into
this paradigm. It makes the process of tax collection very frustrating
for the Internal Revenue Service. It is at the business's choice to
disclose payments received or made via electronic payment systems.
The IRS has no way to know that it is telling the truth or not that
makes it easy to evade taxation.

⦁ The Risk of Payment Conflicts: In electronic payment systems, the

payments are handled by an automated electronic system, not by
humans. The system is prone to errors when it handles large amounts
of payments on a frequent basis with more than one recipients
involved. It is essential to continually check our pay slip after every
pay period ends in order to ensure everything makes sense. If it is a
failure to do this, may result in conflicts of payment caused by
technical glitches and anomalies.

⦁ E-cash: E-cash is a paperless cash system which facilitates the

transfer of funds anonymously. E-cash is free to the user while the
sellers have paid a fee for this. The e-cash fund can be either stored
on a card itself or in an account which is associated with the card. The
most common examples of e-cash system are transit card, PayPal,
GooglePay, Paytm, etc.

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 ⦁ Backdoors Attacks: It is a type of attacks which gives an attacker to
unauthorized access to a system by bypasses the normal
authentication mechanisms. It works in the background and hides
itself from the user that makes it difficult to detect and remove.

⦁ Denial of service attacks: A denial-of-service attack (DoS attack) is

a security attack in which the attacker takes action that prevents the
legitimate (correct) users from accessing the electronic devices. It
makes a network resource unavailable to its intended users by
temporarily disrupting services of a host connected to the Internet.

⦁ Direct Access Attacks: Direct access attack is an attack in which an

intruder gains physical access to the computer to perform an
unauthorized activity and installing various types of software to
compromise security. These types of software loaded with worms and
download a huge amount of sensitive data from the target victims.

⦁ Eavesdropping: This is an unauthorized way of listening to private

communication over the network. It does not interfere with the
normal operations of the targeting system so that the sender and the
recipient of the messages are not aware that their conversation is
tracking.

⦁ Credit/Debit card fraud: A credit card allows us to borrow money

from a recipient bank to make purchases. The issuer of the credit card
has the condition that the cardholder will pay back the borrowed
money with an additional agreed-upon charge.

A debit card is of a plastic card which issued by the financial organization

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to account holder who has a savings deposit account that can be used
instead of cash to make purchases. The debit card can be used only when the
fund is available in the account.

⦁ ATM (Automated Teller Machine) - It is the favourite place of the

fraudster from there they can steal our card details.

⦁ Ways to improve network security:

⦁ Choose a secure ecommerce platform

⦁ Use a secure connection for checkout (SSL)

⦁ Don't store sensitive user data

⦁ Request strong passwords from your users

⦁ Setup system alerts for suspicious activities

⦁ Use tracking numbers for all orders

⦁ Always backup your system and database

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