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E-Commerce Tutorial
E-COMMERCE TUTORIAL
Simply Easy Learning by tutorialspoint
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ABOUT THE TUTORIAL
E-Commerce Tutorial
E-Commerce or Electronics Commerce is a methodology of modern business which addresses the need of business
organizations
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Audience
This reference has been prepared for the beginners to help them understand the basic to advanced concepts related to
e-commerce
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Copyright & Disclaimer Notice
All the content and graphics on this tutorial are the property of tutorialspoint
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Any content from tutorialspoint
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This tutorial may contain inaccuracies or errors and tutorialspoint provides no guarantee regarding the accuracy of the site
or its contents including this tutorial
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errors, please contact us at webmaster@tutorialspoint
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Audience
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Copyright & Disclaimer Notice
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1
Traditional Commerce v/s E-Commerce
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5
Advantages to Customers
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7
Disadvantages
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Non-Technical Disadvantages
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Business - to - Business (B2B)
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Consumer - to - Consumer (C2C)
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Business - to - Government (B2G)
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Government - to - Citizen (G2C)
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Credit Card
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Debit Card
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E-Money
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Security Systems
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Security Protocols in Internet
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Secure Hypertext Transfer Protocol (SHTTP)
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B2B Business Model
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Architectural Models
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Consumer Shopping Procedure
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EDI
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Steps in an EDI System
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About tutorialspoint
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iii
1
CHAPTER
E-Commerce Overview
This chapter gives a basic idea about e-commerce starting with its features and
comparison between traditional and e-commerce
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E-commerce
refers to paperless exchange of business information using following ways
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24x7 Service availability: E-commerce automates business of enterprises and
services provided by them to customers are available anytime, anywhere
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Advertising / Marketing: E-commerce increases the reach of advertising of products
and services of businesses
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Improved Sales: Using E-Commerce, orders for the products can be generated
anytime, anywhere without any human intervention
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Support: E-Commerce provides various ways to provide pre sales and post sales
assistance to provide better services to customers
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Reports get generated instantly when required
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Communication improvement: E-Commerce provides ways for faster, efficient,
reliable communication with customers and partners
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Traditional Commerce
No
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Information sharing is made easy via
electronic communication channels
making little dependency on person to
person information exchange
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Manual intervention is required
for each communication or
transaction
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Electronics system automatically
handles when to pass communication
to required person or do the
transactions
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A uniform strategy can be easily
established and maintain in ecommerce
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In e-Commerce or Electronic Market,
there is no human intervention
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E-Commerce website provides user a
platform where al l information is
available at one place
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E-Commerce provides a universal
platform to support commercial /
business activities across the globe
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E
-Commerce advantages can be broadly classified in three major categories:
Advantages to Organizations
Advantages to Consumers
Advantages to Society
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Advantages to Organizations
Using E-Commerce, organization can expand their market to national and
international markets with minimum capital investment
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E-Commerce helps organization to reduce the cost to create process,
distribute, retrieve and manage the paper based information by digitizing the
information
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E-commerce helps organization to provide better customer services
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E-Commerce reduces paper work a lot
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It supports "pull"
type supply management
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Advantages to Customers
24x7 support
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Here 24x7 refers to 24 hours of each seven days of a week
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E-Commerce application provides user more options to compare and select
the cheaper and better option
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E-Commerce provides option of virtual auctions
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A customer can see the relevant detailed
information within seconds rather than waiting for days or weeks
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Advantages to Society
Customers need not to travel to shop a product thus less traffic on road and
low air pollution
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E-Commerce has enabled access to services and products to rural areas as
well which are otherwise not available to them
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3
CHAPTER
Disadvantages
This section describes disadvantages of e-commerce
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Software development industry is still evolving and keeps changing rapidly
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Special types of web server or other software might be required by the vendor
setting the e-commerce environment apart from network servers
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There could be software/hardware compatibility issue as some E-Commerce
software may be incompatible with some operating system or any other
component
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There could be delay in launching the E-Commerce
application due to mistakes, lack of experience
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Such mistrust makes it difficult to make user switch from physical stores to
online/virtual stores
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Lack of touch or feel of products during online shopping
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Internet access is still not cheaper and is inconvenient to use for many
potential customers like one living in remote villages
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E
-Commerce or Electronics Commerce business models can generally categorized in following categories
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As an example, a wholesaler places an
order from a company's website and after receiving the consignment, sells the end
product to final customer who comes to buy the product at wholesaler's retail outlet
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A
customer can view products shown on the website of business organization
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Website will send a notification to
the business organization via email and organization will dispatch the product/goods to
the customer
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or rent a room by publishing their
information on the website
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Another consumer may opt to buy the product of the first customer by viewing
the post/advertisement on the website
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Consumer places an estimate of amount he/she
wants to spend for a particular service
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Business organization
that fulfills the consumer's requirement within specified budget approaches the
customer and provides its services
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Such websites are used by government to trade
and exchange information with various business organizations
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Government - to - Business (G2B)
Government uses B2G model website to approach business organizations
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Government - to - Citizen (G2C)
Government uses G2C model website to approach citizen in general
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Such website also
provides services like registration for birth, marriage or death certificates
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5
CHAPTER
Payment Systems
This section describes various electronics ways of payment like credit cards, debit cards,
smart cards etc
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Electronic payment has
revolutionized the business processing by reducing paper work, transaction costs,
labour cost
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Some of the
modes of electronic payments are following
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Credit
card is small plastic card with a unique number attached with an account
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When
a customer purchases a product via credit card, credit card issuer bank pays on behalf
of the customer and customer has a certain time period after which he/she can pay the
credit card bill
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Following are the actors
in the credit card system
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The card issuer bank - card holder's bank
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The acquirer bank - the merchant's bank
The card brand - for example, visa or mastercard
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Step 2
Customer presents credit card information to merchant site or
to merchant from whom he/she want to purchase a
product/service
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Step 4
Card brand company authenticates the credit card and paid the
transaction by credit
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Step 5
Merchant submits the sales slip to acquirer banks and gets the
service chargers paid to him/her
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Step 6
Now card brand company asks to clear amount from the issuer
bank and amount gets transferred to card brand company
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It is required to have a bank account before getting a debit
card from the bank
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Debit cards free customer to carry cash, cheques and even merchants accepts debit
card more readily
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Smart Card
Smart card is again similar to credit card and debit card in appearance but it has a
small microprocessor chip embedded in it
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Smart card is also used to store money which is reduced
as per usage
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Smart cards are secure as
they stores information in encrypted format and are less expensive / provide faster
processing
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E-Money
E-Money transactions refer to situation where payment is done over the network and
amount gets transferred from one financial body to another financial body without any
involvement of a middleman
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Online payments done via credit card, debit card or smart card are examples of emoney transactions
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In case of e-cash, both
customer and merchant both have to sign up with the bank or company issuing e-cash
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Accounts can be in same bank or different bank
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Now a day, internet based EFT is getting popularity
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Customer logins to the bank's website and registers
another bank account
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Customer's bank transfers amount to other account if it is in same bank
otherwise transfer request is forwarded to ACH (Automated Clearing House) to transfer
amount to other account and amount is deducted from customer's account
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6
CHAPTER
Security Systems
This section describes security concerns of e-commerce
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Customer will lose his/her faith in e-business if its security is compromised
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It
should not be intercepted during transmission
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Availability - Information should be available wherever and whenever
requirement within time limit specified
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Non-Repudiabiity - It is protection against denial of order or denial of
payment
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Similarly the recipient of message should not be able to
deny receipt
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Auditability - Data should be recorded in such a way that it can be audited for
integrity requirements
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Sender of the information encrypts the
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data using a secret code and specified receiver only can decrypt the data
using the same or different secret code
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A digital signature is a e-signature authentic authenticated through encryption
and password
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Security Protocols in Internet
Following are the popular protocols used over the internet which ensures security of
transactions made over the internet
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It meets
following security requirements:
Authentication
Encryption
Integrity
Non-reputability
"https://" is to be used for HTTP urls with SSL, where as "http:/" is to be used for HTTP
urls without SSL
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Secure HTTP supports multiple security
mechanism providing security to end users
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Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration
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It has following components:
Card Holder's Digital Wallet Software - Digital Wallet allows card holder to
make secure purchases online via point and click interface
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Payment Gateway Server Software - Payment gateway provides automatic
and standard payment process
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Certificate Authority Software -This software is used by financial institutions
to issue digital certificates to card holders and merchants and to enable them
to register their account agreements for secure electronic commerce
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Website following B2B business model sells its product to an intermediate buyer who
then sells the product to the final customer
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B2B implies that seller as well as buyer is business entity
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Following are the leading items in B2B e-Commerce
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Internet - Internet represents world wide web or network of networks
connecting computers across the world
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Back-End Information System Integration - Back End information systems
are database management systems used to manage the business data
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A supplier offers an e-stores for sales promotion
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He invites suppliers to bid on product's catalog
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Intermediary Oriented marketplace - In this type of model, an intermediary
company runs a market place where business buyers and sellers can transact
with each other
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I
n B2C model, business Website is a place where all transactions take place
between a business organization and consumer directly
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After receiving the order, goods would
be dispatched to the customer
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of customers
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Support or good customer care service
Consumer Shopping Procedure
Following are the steps used in B2C e-commerce:
A consumer
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determines the requirement
searches available items on the website meeting the requirement
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gives the order
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receives the delivered item and review/inspect them
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Disintermediation and Reintermediation
In traditional commerce, there are intermediating agents like wholesalers, distributors,
retailers between manufacturer and consumer
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This process of removal of business layers responsible
for intermediary functions is called Disintermediation
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This process of shifting of business layers responsible
for intermediary functions from traditional to electronic mediums is called
Reintermediation
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EDI stands for Electronic Data Exchange
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In EDI, paper documents
are replaced with electronic documents like word documents, spreadsheets etc
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A program generates the file which contains the processed document
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The file containing the document is send electronically on network
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An acknowledgement document is generated and sent to the originating
organization
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Reduction in data entry errors
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Shorter processing life cycle - As orders can be processed as soon as they
are entered into the system
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Electronic form of data - It is quite easy to transfer or share data being in
electronic format
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Cost Effective - As time is saved and orders are processed very effectively,
EDI proves to be higly cost effective
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APPENDIX
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