Unit IV
Introduction to Internet and Other emerging Technologies
Derived from the words Interconnection + Network, an internet is a world-wide collection of computers and computer networks all of which are interconnected to each other so that users can share information and communicate with each other.
In short, the Internet is a system of computer and networks that are-
- Interconnected
- Share data and information
- Act as one network or unit
The U.S. Government agency named Advanced Research Projects Agency (ARPA) in 1969 developed a network for scientific and defense related research known as ARPANET which became the base for the Internet.
Their main focus was to create a network which allows research computers of one university to interact with other university’s research computers.
But later on due to certain unavoidable conditions it was commercialized by US government in 1990’s and internet was open for general public usage.
Advantages
Here, are pros/benefits of using the Internet
- With the use of Internet one can easily send and receive emails.
- Download files is also an advantage as most of the files are easily and freely available to use.
- With the help of Internet one can post his opinion to a newsgroup or can also ask for opinions from others on a particular topic.
- One can easily chat and communicate with others easily with the help of Internet; it expands the reach of a person.
- Anyone with access to internet can surf the World Wide Web and gain information on almost any topic they like.
- A lot of businesses opportunities have been made open to the individuals to expand their business and reach global customers through Internet.
- Just like businesses it is made possible for customers to reach local and even global sellers and shop with security, ease and comfort.
- A user can easily find music, movies, games and many other entertainment things over the internet with which they can easily keep themselves busy.
Disadvantages
Here, is important cons/drawback of using the internet:
- It allows everybody to speak about everything without any limitations or censorship which sometimes could impart bad influence on others.
- Many fake news and results could come up through search engines.
- Internet could replace face to face collaborations and make us lose the human touch.
- With so much data available on internet the information has been overloaded and searching the relevant information could be a tiring process.
- It makes people lazier – as most of the people nowadays are ordering their favorite dishes, even groceries without moving out of their houses.
A network within an organisation used to connect the outsiders with the internal users in a controlled environment is termed as an Extranet. It helps a business to connect with their customers and suppliers and creates a productive environment. Extra means external and net means internet when combined it stands out for external network for outsiders.
It helps a business to combine its company’s internal network (intranet) with the supply chain. It is simply broadening the company’s network in order to provide specific information and establish a close working relation with customers and trading partners. It is up to the user how he wants to extend the company’s network as there are multiple options to do so for example one can use a private network, VPN’s (Virtual Private Network) over internet for real time communication in order to save cost or one can combine both VPN and Internet together.
One should note that an extranet has certain requirements in order to implement it correctly such as a router at every end, a firewall, an authentication software, a server, a dedicated WAN or VPN.
Extranet Applications
Here, are important applications of internet
- Supply-chain management
- Customer communications
- Distributor promotions
- Customer service
- Order status inquiry
- Inventory inquiry
- Account status inquiry
- Warranty registration
- Claims
- Online discussion forums
Advantages & Disadvantages of Extranet
Here, are pros/benefits of Extranet:
- Extranet improves the efficiency and outputs of the company as all the process are automated. The chances of mistakes are very low in automated tasks.
- Faster completion of Work in comparison to manual processes.
- Customers, Partners, Suppliers, Employees and even Stakeholders can easily access and analyse company information from anywhere anytime, this saves the conference and meeting times irrespective of geographical locations of each other.
- The information on Extranet can easily be modified, updated and changed by its members from anywhere on immediate basis thus providing with most accurate and up to date information.
- The relations with important and potential customers can substantially be improved by providing them with accurate and up to date information.
Here, are drawbacks/cons of Extranet:
- Extranets can be costly to apply and maintain within an organization.
- There is a problem of protecting the confidential information within Extranet as it is open to outsiders, if this information access is not controlled and protected correctly it might fall into wrong hands and might harm the business.
- Lack of personal face to face interaction with clients and partners is one of the biggest flaws of Extranet.
It is a kind of network within an organisation which gives the employees advantage to organize, manage and share important information within the network privately. It is a kind of private local area network based on a client/server model where every computer is connected through LAN and has a MAC address to identify the computer location within the network.
This network uses internet protocols within a network connection in order to let the employee’s access and share the information securely with each other. This model works similar as an internet and also usesthe same TCP/IP protocol for communication. The information within this network can easily be accessed with browsers and can run without running any special kind of software’s on user’s computer.
Intranet Applications
Here, are important applications of intranet
- Sharing the detail of company rules/policies & regulations
- Access employee database
- Access information of products& customers
- Common information Sharing
- Reports submission
- Make Personal or Department specific homepages
- Use as a Telephone Directory within an organization
Advantages & Disadvantages of Intranet
Here, are certain advantages of Intranet:
- Faster, much easier and low-cost implementation
- Open standards build
- Ability to connect with other systems
- Internal and External info can be easily accessed
- Better communication
Here, are drawbacks/cons of Intranet
- Threat of sharing and losing control over information
- Can be accessed illegally
- Bandwidth Limitation for business
- Too much Information leads to information overload and productivity suffers
- Unknown Complexities in managing network
- Hidden costs involved in maintenance of the network
In order to get access to the internet so that you can browse, surf, watch movies, send and receive email and do many more things you need certain components which interact with each other simultaneously so that get continuous accessible Internet. These components include:
- Personal Computer: A computer is the main piece of hardware required to access the internet, without computer you won’t be able to communicate with any of the other devices.
 | It is a combination of hardware and software, which takes users instructions and data, processes it and displays meaningful information.
It consists of Network card and other wireless receiving devices, which helps the computer to receive the signals from modem, process it and provides connectivity to the user.
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- Modem: A short form for “Modulator-Demodulator” and is used for data transfer from one computer network to another computer network through connection lines. These connection lines carry messages in Analog form while the computer network carries messages in digital form which creates a difference.
In order to correct this difference a converter is needed which is modem. Modulator in a modem converts the data from Digital form to Analog form at the transmitters side while, De-modulator in a modem converts the data from Analog form to Digital form at receivers side.
Thus, it is connected with the main connection line and it helps the user to access the internet after few settings. There are many types of modems available in the market such as wireless modem, line modem etc. for different uses. |  |
- Browser: As we have already discussed a browser is the Graphical User Interface which acts as a medium between the user and the web. It helps a user to surf, browse and navigate websites on the internet. When a user starts a web browser it approaches a web server and request for the information and after obtaining the information from web server it displays the same to the user. Chrome, Opera, Internet Explorer are some freely available browsers.
- Connection line: In order to connect to the internet a user requires a main connection line which is connected to the modem at the user’s home to provide access to the internet. This is the main medium through which the internet is provided to the user from main office. These connection lines are provided by the ISP’s to the user on demand.
The speed and network connectivity depends on these lines i.e., if these line are of optical fiber they provides much better speed and connection stability while if they are normal coaxial lines their speed and connection stability suffers.
- ISP (Internet Service Provider): An ISP is a company which provides its users with access to the internet. They sell internet packages with different data and speed limits (such as Jio Fiber, Airtel Broadband, BSNL Broadband, etc.) for certain duration (monthly, quarterly, annual etc.) depending on their existing plans which can be paid for and used by the user. You can renew the data and speed anytime you want and can even track your usage for the month through their portals or apps.
Following things can be considered while choosing an ISP:
- Speed
- Price
- Ease of Installation
- Service Record
- Technical Support
- Contract Terms
Internet provides a user to access various applications. These applications are interactive and systemized in order to perform complex business processes and can only be accessed via Internet.
These applications require a medium in order to be accessed by the user, such as a web browser. Various applications of Internet are as follows:
- The World-Wide Web (WWW):It is an interconnection of hypertext documents that are linked with each other and are accessed through the Internet. In order to view these documents an application called web browser is used. This application shows the contents of web pages which might include text, images, videos, and other multimedia items. With these browsers a user can easily browse and navigate between hyperlinks.
- Electronic Mail (E-Mail):It is an electronic medium to transmit messages from one user to the other through network communication. This is the fastest, cheapest and effective way to communicate with others. An e-mail application performs the following basic functions:
Send &Receive e-mails
Save e-mails
Print e-mails
Instant Reply to e-mails
Using Attachments to include useful files in an e-mail
- File Transfer Protocol (FTP):In order to exchange files between multiple users over the network FTP protocol is used. ATCP/IP network is mostly used to exchange files between two hosts. It is the most commonly used protocol in order to download or upload a file from the internet.
- Search Engine: An internet tool used to find meaningful information from a whole bunch of websites over the internet. This tool shows the users searched content in a search result page which has a wide variety of list including WebPages, images, videos and other file types.
- Chatting: An instant method to communicate with others over the internet is chatting. Any user from anywhere around the world can join the live chat session and can interact with others in an instant. Many users can join in a single chat session; it is a kind of free-form conversation, usually to do discussions over a particular topic. For example, Yahoo Messenger, MSN Messenger, etc.
- Video Conferencing: It is a live communication technology which allows two or more people to share their video and audio in a continuous manner. There are multiple platforms available nowadays to do video conferencing such as Skype, Google meet, etc.
- E-Commerce: E in E-Commerce stands for Electronic thus it simply means carrying out commercial activities i.e., buying and selling of products or services electronically over the Internet. All the typical processes of a business such as developing, marketing, selling, delivering, servicing and paying for products and services are carried out online or electronically.
Electronic Commerce or E-Commerce is a way of how a modern business operates; it can be defined as carrying out the ordinary business process of buying and selling of goods or services through an electronic medium i.e., the Internet.
It is a paperless exchange of business information using the following techniques−
- Electronic Data Interchange (EDI)
- Electronic Mail (e-mail)
- Electronic Bulletin Boards
- Electronic Fund Transfer (EFT)
- Other Network-based technologies
1.6.1 E-Commerce Applications
E-Commerce is used day by day to carry out business activities through a more interactive, easy and cost effective manner whereby a user can easily shop at his own comfort irrespective of the geographical boundaries. This improves the sales of the business and increases the global outreach of customers. The businesses can serve and attend the customers throughout the world with much ease. The e-business models are adopted by a lot of businesses some of the application of e-commerce includes:
- Retail & wholesale: Wholesale and retail are two different kinds of distribution channels of a supply chain whereby retailing stands for selling the goods in small quantities and wholesaling includes selling goods in bulk or larger quantities. With their own electronic stores a retailer or wholesaler can easily sell their products to the wide range of customers whereby customers can select from electronic catalogue and can place their order via shopping cart over the internet.
- Marketing: The collection of data about the preferences, behaviour, needs, and buying patterns of a user becomes so easily and readily available with the help of web and e-commerce. This facilitates the marketers to target the desired customers and perform various marketing activities such as fixing prices, product enhancement, negotiations, and even managing the relationship with the customer
- Finance: With the availability of e-commerce a customer can easily perform various financial transactions over the internet with such an ease and comfort. A customer can check his balance, can apply for a loan, can transfer money from one bank account to the other, can pay his bills and can even purchase items online. All this is facilitated by the e-commerce.
- Manufacturing:E-commerce can also be used in supply chain operations within a company which deals in electronic exchange. A company can simply buy or sell items together, check with the market demand and supply status and control their inventory flow. This speeds up the processing of raw materials and preparing finished goods for the users and avoid excessive storage of stock leading to high inventory cost.
- Auctions:With e-commerce a customer can directly engage in selling and purchasing of goods through live auctions or online bidding system whereby a pool of customers and buyers are created and each individual customer gives bids his best price for the selling item. The user with the highest bidding gets the item after paying for it at the auction.
- Education: E-commerce has a wide impact on the field of education and learning too. With the help of e-commerce it becomes possible for students to learn through online classes. The students preparing for certain exams can pay a certain sum of money and get the full course content with teachers taking live classes and solving the problems of the students. Many educational institutions has started their educational website and made their contents online for students to access for free.
- E-Banking: Online bankingis an electronic way of transacting at your bank. The e-banking allows a user to perform various branch banking operations such as sending money from one bank account to the other, checking account balance, checking bank statements, transacting online etc. at their fingertips just sitting at their home without even visiting the bank branch physically.
- Online Publishing: Digital publishing or e-publishing is a term to make the books and other study material available electronically for users to download and read. This online publishing includes creating e-books, digital magazines, digital libraries, e-catalogues etc. which is widely available for its users to read, download or save through the publishing website.
- Online Booking:Internet booking or e-booking helps those users who don’t like to stand in long queue for tickets of their favorite movies, shows, train tickets, airplane tickets, hotel reservations etc. all these booking services are now easily available over the internet on just one click. There are various modes of payments available online too using which a user can perform their booking transactions in a more secured way. Through online bookings the sales of such industries has increased drastically.
1.6.2 Electronic Data Exchange/Interchange (EDI)
An Electronic Data Exchange is simply communicating the business related documents internally or between organisations in a standardized electronic format. As EDI includes electronic data interchange thus all the paper based documents are now replaced by the digital documents such as word, excel, presentation files etc. By switching to electronic documents an organization can save its precious time, secure the essential documents and can also eliminate errors caused by the manual processing that are costly to fix.
With EDI transactions, the information is saved electronically and on a single click of the user this information transfers from one organisations computer application to that of the other organisations computer application. EDI replaced the time consumed in transferring the information on paper based transfer from one place to the other instead of days, weeks or months it is now one click away to share the documents electronically.
The EDI transmissions are divided into two basic types:
Point-to-point or direct connection: When multiple computers or systems are connected without any intermediary in between over the internet, with some secure protocols it is termed as P2P connection.
Value-added network (VAN): In this type of network a third-party network or system manages the data transmission within the organisation; this can be done using a mail box or some other system.
Electronically Exchanged Documents
These are some common types of documents that are exchanged electronically among businesses internally or externally −
- Invoices: A commercial document having a time stamp with detailed description of a transaction happened between a buyer and seller for a particular good or service. The mode of payment either cash or credit is usually mentioned on invoices.
- Purchase orders: It is a kind of offer document issued by the buyer to the seller mentioning the specific type, quantity, price, discounts and all other terms and conditions for a particular goods or services.
- Shipping Requests: These documents are generally requested by the buyer from the seller in order to complete a transaction of goods or items overseas. These documents are signed by the Authorized Seller Representative and are usually delivered by the seller to the buyer after the request is raised.
- Acknowledgement Slips: It is a kind of document which is signed by the receiving party and acts as a proof of receiving something (letter, document, payment etc.) These acknowledgement slips can be easily digitally signed and has to be returned back to the sender as a proof of receiving.
- Business Correspondence letters: These types of letter are used to interchange information within an organisation or between businesses, customers and investors regarding regular business activities as a formal written communication.
- Financial information letters: These letters mostly carries the financial information of customers’ accounts or business related information that can be used by the creditors or banks at the time of transacting.
Electronic Data Exchange Components
The Electronic Data Exchange includes various components that continuously interact with each other in order to exchange these electronic documents.
- A Computer System –Since EDI usually facilitates its users with paperless transfer of documents and thus replaces various intermediary services such as postal mail, fax, e-mail etc. These services are also used to electronically exchange files and documents but the issue with these are that human touch is still necessary in order to facilitate exchange. Since human involvement sometimes slows down the process and might also involve certain errors. In EDI’s the documents flows directly from the sender’s computer application to the receiver’s computer application and the processing of documents starts immediately without involving people and a ton lot of papers. A EDI process flow can look like this:
- Electronic Documents –Those documents which are usually interchanged in the process of EDI and include business related information. These documents may commonly include orders, invoices, etc. as explained earlier but EDI’s are not limited to exchange only these documents there are other documents also that can be exchanged using this system such as Bill of Lading, Customs, Inventory, shipping bills and payment related documents.
- A Standardized Format–Since computer applications are used to process these electronic documents thus in order to make these understandable to the computer they must be converted into a standardized format. This standard format includes details such as the type of document, information type and format, etc. If the documents are not in standardized format the computer system would not be able to understand and process them and thus will give error.
- Business Parties –The EDI system usually includes two parties i.e. the sender and the receiver. Thus, in order to make this system work there must always be two parties involved either from within the organisation or outside the organisation.
Advantages of an EDI System
EDI system has multiple advantages for its users some of these advantages are as follows:
- Low Data Entry Errors: As there is very less human touch involved and everything is done and processed with the help of a computer application on both the ends thus the chance of data entry error is very low.
- Simple and Small Process cycle: As soon as the order is received documents can be processed in a much faster manner and can be transferred from one end to the other thus reducing the time taken in processing the paper formalities.
- Electronic form of Information: The information and documents are all available in electronic format in both the places thus these can be easily accessed from anywhere and anytime and can also be used for references.
- Paper work Reduction: When these documents and information are transformed in electronic format the usage of paper work reduces and so the unnecessary formalities. These digital papers can be accessed by the users anytime and can proceed with the process cycle.
- Cost Efficient: The cost and time of the company both are saved while using the EDI system as all the paper work cost and delays are now replaced with digital documents which are readily available to take actions on from anywhere.
- Communication Standards: The EDI system implements clear standards of the data content and formats in which the data has to be made available thus making the communication much clearer and error free.
- Improves Traceability and Reporting: Since EDI system includes a strong IT system base to support the data collection, transparency and analysis which makes tracing the errors and reporting it within the system very easy.
- Positive Customer Experiences: With such efficient and prompt response by a business unit every customer experiences a very positive environment and would love to transact again and again. Due to EDI the customer retention becomes very much possible with ease.
1.6.3 Payment Systems
In simple terms, payment system refers to a process of transferring the money electronically from one person to the other for a particular transaction(either buying or selling of goods or services). Due to wide increase in e-commerce shopping sites the mode of payments has also been modified. There are many payment systems and processing devices available nowadays for the ordinary consumers with increased security measures and improved transaction processing time.
There is a four step common system followed in order to process any payment and complete the financial transaction:
- Payment instructions are the information contained in a wire transfer or check. The payer gives instructions to his own bank for transferring the value into the beneficiary’s bank account.
- Payment generation is when the instructions are entered into the system—e.g. a cheque is printed or wire transfer of money is processed.
- Clearing denotes the whole process starting from the time of committing a payment until the payment is fully processed. It involves actual transfer of money from the payer’s account to the receiver’s account.
- Settlement is the final step in the basic process and occurs when the beneficiary’s (payee’s) bank account is credited and the payer’s bank account is debited.
The actual payment process will depend on the type of payment method that the payer and payee have chosen to transact. The operating principle is the main differentiating factor between various payment methods but the payment form is either credit or debit based.
- Credit based payment system: This system is based on the term “Pay later” which simply gives the power to its holder transactions at a certain specified limit set by the financial institution or card issuer. The prepaid card has already some stored-value in it which can be used by the holder to purchase goods or services and the whole liability is borne by the financial institution in lieu of certain charges over the credit amount both borne by the cardholder.
Credit Card: This card is issued by the financial institution and allows its holder to make payments up to a certain limit (set at the time of issuing the card) online or through some electronic payment processing machine, without involvement of cash.
E-wallet: This is also a prepaid form of payment system which is linked to the individual’s bank account so as to make the transactions much easier and smoother for the user. A user can load his money from the bank account to these wallets and can use it to transact in simply one click.
Smart card: These are simply plastic cards which have a microprocessor chip that stores information in digital form related to the users funds and can be used to transact with much ease.
CREDIT-BASED PAYMENT SYSTEM
- Debit based payment system: This system is based on “Pay First” basis which means the user first has to have that much amount in order to process the transaction. In this system the user can only involve in a transaction if he has that much amount in his bank account in real time, there is no credit facility, and the transaction amount must be present in real within the users account to make him able to transact.
Debit Card: These are plastic cards issued by the financial institutions on opening of savings account with them. The limit of these cards are dependent on the amount user has deposited in his account with these financial institutions. These cards can be used to withdraw money from the ATM’s and to transact anywhere around the world.
Direct Transfers: This is another facility provided by banks in order to transfer money from savings accounts to some other account so that user can transact easily. This option can be opted through net banking or mobile banking and is a card less option which does not involve any cards. The same transaction amount limitation is there as that in Debit cards that you can only pay what you have in your savings account.
E-cheques: This is a digital form of old paper cheques used in banks to transfer amount from one person’s account to others. This is also a form of electronic money transfer from the financial institution after opening a specific account with them. The cheque offers a digital mode of transaction without usage of paper.
E-cash: In this option some amount of money is generated by the user on his device by performing certain tasks which can later be used in order to pay for online transactions up to its available unit. This is different from paper and coin based currency which is converted into electronic form to pay for transactions. This money is anonymous kind of money and can be used to make micropayments by the individuals. A basic example is Crypto-currencies.
Stored-value card: These cards are stored with some amount of money which can later be used by the user to perform transactions only within the issuer’s store. Amazon gift cards are an example of this.
DEBIT-BASED PAYMENT SYSTEM
Advantages and Disadvantages of Payment Systems
Advantages
- Global reach will help the business to get more clients from across the world, which leads to increase in sales for the business.
- The transactions are carried out with more speed and simplicity as they are done within seconds on the click of the user and save much time and efforts.
- The payments on e-commerce websites are so convenient that customers can make payments from anywhere and anytime with just an active internet connected device.
- The cost of the transactions and the technology involved is so low that most of the e-business can easily afford it.
- There is a facility for customers to check their virtual accounts online instantly and find the transaction history which acts as an expense control method.
- Adding cards and making payments on the e-commerce sites are so easy that even a person with less technical knowledge can also transact with ease and within seconds.
- These payment gateways and providers have enhanced security and anti-fraud tools that make your transactions more secure and reliable.
Disadvantages
- There are chances of frauds and risks in e-commerce websites that are not secured thus it is highly recommended to choose e-commerce store wisely as transacting with unsecured stores have high risk of data breach and identity theft.
- It should be noted that most of your payment information is stored in the databases of these e-commerce sites and providing such information at unknown places always has a risk as you don’t know who you are providing such information to.
- There is always a constant and strong internet connection requirement in order to transact securely and safely any drop in internet speed will lead to unprocessed transactions and situations where your account is debited with money but the transaction is still not completed.
- There is sometimes a small percentage of service fee is charged from the buyer by some of the payment gateways and third-party payment processors in order to process the transaction which may lead to increase in the cost of the actual transaction and is only known at the time of doing final payment.
1.6.4 Risk and Security Considerations
Risk in E-Commerce
Since e-commerce interacts with a lot of consumers from around the globe thus making it prone to certain risks and threats which might affect the business and pushes the e-commerce website towards losses if they are not timely addressed. Some of these risks include:
- Breach in Online Security: With increase in worldwide global e-commerce store there is also an increase in the threats these stores faces due to various malwares, phishing attacks, hacking, spam mails etc. In order to survive the e-commerce store must protect themselves and their users from being a victim of these attacks. In order defend from such threats the e-commerce stores can regularly update the security features and use strong security on their sites.
- Reliability on ISP: The server from an Internet Service Providers might get crash or respond slow which might result in errors in online payments thus there is always a risk in receiving payment or system errors due to slow transfer speed.
- Privacy Concern: Since these e-commerce website provides feature to its users to store their private confidential payment information in their database which might get compromised and there is always a risk of spamming, identity theft or unauthorized transactions from your account. To protect against these risks always use a strong password for your account.
- Addressing Customer Issues: There might be certain risks such as, delay in delivering the order to the user, wrong item delivery, double charging of credit cards for a particular order, receiving different product then the online description, etc. thus it is necessary to provide resolution to such customers facing these issues by creating a strong customer service to provide speedy resolution and rectify the delivery or transaction mistakes.
- Credit Card Frauds: Since credit cards can be used without much enhanced security thus if stolen or hacked these credit cards can be used by others to make online purchase on your behalf or steal your personal information. Thus it is recommended to always check for any suspicious transactions and beware of fake e-commerce websites meant just for such burglaries.
- Intellectual Property Issues: Every website uses images, logos, music, even product descriptions that are unique for them but sometimes these items are copied from original websites and are used by others to promote their fake websites or even copy the websites thus there is always a risk of violation of Intellectual property right.
- Modification in SEOs: Search Engine Optimization as explained earlier uses certain algorithms to search for unique and relevant websites and list them to the user as search result of their queries. There is always a risk that these search engines might change their complete algorithms and the way you have optimized your site to stay on the top might get outdated resulting in your traffic drop overnight.
- Different Taxation System: Since the e-commerce websites are globally available and each state or country has their own taxation system thus it becomes risky for e-businesses to miss a sales tax of state or paying unfair shipping and/or import/export taxes.
- Handling Returned and Exchanged Goods: The main challenging task for e-commerce business is handling the returns and exchanges as these could lead to high inventory cost and shipping fees and reselling the same item is also a tricky task.
- Issues with Logistics and Warehouse storage: Since every business has limited stock and sometimes the order demand for such stock is high which might lead to delay in shipment of the product or delivering the wrong product to wrong recipient which again increases the cost of returning of the product.
Security Consideration in E-Commerce
Security is an essential part of any transaction that takes place over the internet. Any e-business is based on the trust of the customer. A secured e-commerce website will have much footfall of the customers due to better security and privacy but if the transactions security and privacy is compromised the customers will start losing their faith in that e-business website. Thus, every business must ensure the following security consideration in their e-commerce website:
- Confidentiality of Data: The main consideration in any security is to make sure that the data of the user is confidential and any unauthorized person is not able to access this data then only an e-commerce website can become reliable.
- Data Integrity: The data or information processed by any website should be genuine and non-alterable the user gets what he asked for and any alteration or change in this information without the knowledge of the user or the business should be taken care of.
- Information Availability: The information or data should be available to the user and the business anytime anywhere over the internet within a specified time limit. If any delay or issue in this information availability happens then it must be checked and avoided in time.
- Authenticity of Data: The data provided by the user must be checked for authenticity before processing any transaction in order to avoid any fraudulent activities in payments or product replacement.
- Non-Reputability: It is an assurance that someone cannot deny the order or deny the payment once they are done. It simply means to ensure that to both the parties involved in the transaction cannot deny from the transaction or communication happened between them. This is used to make sure that both the buyer and the seller once entered into a transaction has to complete it and either of them cannot deny of this transaction.
- Encrypted Information: The communication between the buyer and the seller must be encrypted and it must be assured that this information reaches only in the hands of an authorized party which only can decrypt this information and complete the transaction.
- Audit ability of Data: All the data and information collected from the buyer must be safely and efficiently recorded so that if at times the data has to be audited for integrity requirements then it can be fetched easily.
1.6.5 Legal Issues
Every business either online or offline, new or old has to carry out their operations within some legal framework. A wide perspective and detailed look over the various legal internet laws will always give the business a competitive edge else many legal issues and fines have to be borne by the business time to time.
Merely creating a website safe and secure for its users is not just the only task of the business, the website just acts as a shopping window through which the customer browse and select suitable products to buy, it is the main business which is being carried out at the back of the website which has to be legally adaptive. Some of the legal issues to be taken care of while using an e-commerce platform are:
- Domain name Issues: Choosing a domain name in e-commerce website is always an issue with every business. There are many factors which one has to assess first before selecting a suitable website name. There are various legal aspects such as, similarities in website names, unlawful advertising, similar website name as that of registered trademarks, etc. which cannot be neglected or ignored while considering a legal name for your business.
There is a term named “cyber squatting” to address the issue of registering domain names closer or similar to that of a brand name and there are various databases which check the website’s domain name for similarities with registered trademarks.
- Incorporation Problem: There are many people online who are operating only on the internet and through their websites they are not incorporated as legal entity which is a very serious issue. Without incorporation businesses are legally not allowed to do any purchase or sale activity of their products and if carried out will be considered illegal. If a customer engages with such business and on happening of any fraud or corruption the customer will not be able to claim anything as they have engaged with an illegal business activity and might have no shelter in this case.
- Websites Creation: Creating a well optimized and flawless operational website with friendly user interface is the most basic task of any e-business. There must be a legal website creation contract or terms which have to be clearly stated and the website must be created in accordance with these terms. The website must be functional, bug free, tested and come with a warranty and liability contract.
- Copyright Issue: It is necessary that after getting the website created from the developer all the copyright and related rights to use the website contents should be legally transferred to the owner through an agreement. The owner must get all the right to use the website freely without any restrictions and shall be able to make changes to the website such as update, edit and delete the contents as per his requirements. The website creator must provide a written consent to the owner that the website does not violate any legal copyright and intellectual property rights of others contents.
- Trademark Security Problem: Many website owners fail to protect their contents by not getting them trademarked due to which other website creators or users freely copy the company logo, symbols and contents to misrepresent the business to consumers against which the business cannot do anything. This infringement issue is increasing day by day and is a very common legal issue and threat which an e-commerce website faces now days. Thus, it is very important for a business to get their website contents trademarked and secure the legal existence of their business.
- Terms & conditions and other essential information: While creating the presence of your business online it is very much essential to include all the legal information related to the company and the sale of the product on to the e-commerce website such as, name and address of the company, the characteristics and description of the goods and services, product prices, taxes and fees, transportation or delivery charges, estimate delivery date, terms and conditions of return, way of communication with the company, modes of payments, right of the consumer to withdraw the contract etc. everything must be clearly stated to the user lack of which might attract legal fines and charges against the company.
- Privacy and security of data: All the information online most of the time is facing the concern of privacy and security. With an increase in hacking and phishing attacks the data and privacy of the user is on the edge. Thus, it is legally binding that the websites must collect and store all this consumer data with adequate security measures and use latest technology to assure the customers regarding their privacy and personal data.
If a website is taking data from the user it must first take consent from the user by showing a Legal Agreement on agreeing of which only the data of the user must be collected. Also, there are very strict laws for those websites that collect and sell users data without their consent.
- Online offers and deals: As many e-commerce websites are opening day by day there is a cut throat competition between them. In order to increase the sales every business provides its customers with certain offers and deals which should be sometimes not clearly stated and customers are made fool out of it this attracts legal action against those websites. In order to stay safe and secure from such legal obligations every e-commerce site must clearly state the applicability and offer terms and conditions to the user before entering into the transaction.
- Issue with Return policies: Every customer has a right to return the online purchased item within seven days from the date of delivery as included in the legal provisions of Consumer Protection Laws. But there is a catch in here the customer cannot just use the product and return it, there must be some defect or issue with the product and after carefully examining and proving the same then only the product can be replaced.
There are many websites who are not abiding to these laws they find some loophole and make the customer suffer with the defective products such businesses are prone to legal actions. Thus, it is must that every e-commerce site should mention all the conditions and scenarios earlier to the customer regarding the sale and return process before the purchase of the good or service so as to engage in a fair transaction.
- Transaction Issues: There must be a clear and complete information regarding all the hidden costs and fees included or excluded within the products final price. Also, the various modes of payments and the charges (if charged) by each mode should be clearly stated to the consumer before carrying out the transaction. As there are many websites who at the time of final payment charges some hidden fees from the consumer which is also a legal ground to sue the company with heavy penalty.
- Increased Fraud on the Internet: The cyber frauds is increasing day by day a lot of fake e-commerce websites are available who looks like genuine but at the time of transaction captures all the financial information of the consumer and makes unauthorised transactions and even sell this information for money. Customers should be aware of such sites and inform to the local authority regarding such fake websites committing illegal frauds.
1.6.6 Other Emerging Technologies
The e-commerce industry is going through drastic changes year by year. The customers are meeting new sellers and vice versa, e-commerce is providing a platform to all those shoppers to shop globally and save tons of money. There isa lot of advancement in the way a user shops, their buying history and patterns are analyzed so that the marketing and advertising can be modified as per each individual user’s behavior.
Technology developed many advanced and sophisticated ways to target a consumer and provides them with fully customized and personalized experience so that their time and money both can be saved and high quality products can be delivered to them. A list of some of these new technologies is presented below.
- AI powered shopping: Artificial Intelligence is changing the way a user used to shop earlier it creates a more personalized shopping experience for the shoppers. As soon as someone visits an e-commerce website the AI bot will search for the user’s profile and information and on the basis of their purchase history, location, and product browsing pattern the products and suggestions are displayed to the user.
These suggestions are provided to the user through various Ads, widgets, popup etc. clicking on which the user is taken to the advertised item on the concerned website.
- AR Virtual Stores: After AI the Augmented Reality (AR) is stepping its foot in providing the users with a virtual look and feel of a real store. This application works best with Virtual Reality Glasses and on combining both it becomes hard to tell the difference between an online or offline store. The user can take a look at the original product and can even try the product by creating a 3D avatar of them.
- Social media marketing: The social media marketing is a very useful tool for e-commerce websites as they help in promoting the websites and creating awareness among the people regarding the newly launched products and special offers. With social media marketing the consumers are directly attracted towards the e-commerce websites this also helps in promoting the website among consumer’s family and friends too and thus results in creating a larger pool of potential customers.
- Online stores mixed with offline experience: Many online e-commerce sites which has a physical store in many cities can also mix the experience of both online and offline store where a consumer can select a product of his choice online and can buy the same from the physical store by first looking and trying the same product or the opposite customers can check a product offline and can find more information about the product online and can also purchase the same from the online store too. With this the sale of both online and offline stores can be maintained and many customers with fear of buying products online can be targeted.
- Voice search: This is an interactive tool used to give much easier and comfortable experience to the user. Instead of typing and searching for the whole product, name and number the user can simply search the product with their voice. They just have to speak to the voice assistant available at the store search box and the rest will be taken care by the e-commerce website. The input of user’s voice is understood and converted to text and then all the categories and pages on the website will be searched for the user’s search term.
- Video marketing: The most trending type of marketing is Video marketing whereby the video or short clip of a product or service is created by local social media influencers and is then shared with the consumers through a social media platform. As video is very interactive and much effective medium to target a large mass of customers.
Through video one can easily get reviews, do live stream of the product, provide live solutions to user’s queries, provide description and usage details of a product and can also actively interact with the users. There are many websites such as YOUTUBE, INSTAGRAM, etc. whereby the users shares their videos of un boxing new products, providing details of a particular product, opinions about the product and much more.
- Subscription services: Subscription services are like renting or paying recurring charges at regular intervals for a particular product or service. As the trend nowadays keeps on changing and certain consumers instead of buying the actual products prefers renting the product thus this service helps target such customers. Subscription helps an e-commerce to increase their sales and side by side create loyal customers for a longer period of time. There are subscriptions available for almost everything from personalized products to free deliveries and even for products that are about to be launched in the near future. Netflix and Amazon are example of such services.
- Chatbot's: Chatbots are simply AI powered bots that are meant for users to get answers to questions that are commonly asked by users such as, finding a particular service, creating an account, purchasing a product, delivery information etc. These chatbots provide answers to these general questions in a fraction of time and won’t let users to wait for an email response or for a human being to answer the query. These chatbots can be applied to both websites and apps and are able to easily handle simple queries related to various products, services and offers.
- Customizable products: Now days many users want their products to be unique and customized as per their taste and preferences thus this option is getting more preferred among consumers. Many e-commerce websites are providing customization not just for the product but also for the packaging and the way delivery is made.
- Digital supply chain: A faster and on time delivery is the main factor which differentiates different e-commerce website from each other. Many companies are focusing most of their resources in this direction. An optimized and properly planned supply chain management plays a crucial role to ensure efficient and effective delivery systems. Innovative technology is also helping these e-commerce businesses to provide faster and timely delivery of products in far places. Some of these technologies includes:
Launch of new freight shuttles with proper seaport management.
Management of Inventory through secured chips and devices.
Invisible digital marks for brand protection from counterfeit products
Usage of robots for better management of warehouses
In order to support Infrastructure development and shipment of deliveries drones are being used by many e-commerce businesses.
Reference Books:
- Dave Shaffey, Tanya Hemphill, David Edmundson-Bird― “Digital Business and E-Commerce Management”, Pearsons Seventh Edition.
- Janice Reynolds― “The Complete E-Commerce Book”―CRC Press.
- Gary P Schneider ―“E-Business International Edition” CENAGE Learning
- Tanner Larsson― “E-Commerce Evolved”, BGS Publications
