Unit 1

Introduction
The term e-commerce was coined back in the 1960s, with the rise of electronic commerce – the buying
and selling of goods through the transmission of data – which was made possible by the introduction of
the electronic data interchange. Fast forward fifty years and e-commerce has changed the way in which
society sells goods and services.
E-commerce has become one of the most popular methods of making money online and an attractive
opportunity for investors. For those interested in buying an e-commerce business,
In 1997, IBM marketing, with its agency Ogilvy & Mather began to use its foundation in IT solutions and
expertise to market itself as a leader of conducting business on the Internet through the term "e-
business." Then CEO Louis V. Gerstner, Jr. was prepared to invest $1 billion to market this new brand.
E-business includes E-Commerce, but also covers internal processes such as production, inventory
management, product development, risk management, finance, knowledge management and human
resources. E-business strategy is more complex, more focused on internal processes, and aimed at cost
savings and improvements in efficiency, productivity and cost savings.
What is e commerce
E-Commerce or Electronics Commerce is a methodology of modern business, which addresses the need
of business organizations, vendors and customers to reduce cost and improve the quality of goods and
services while increasing the speed of delivery. Ecommerce refers to the paperless exchange of business
information using the following ways −
 Electronic Data Exchange (EDI)
 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
Other Network-based technologies
Traditional Commerce began at the time of the barter system which was introduced in the early millions
of years ago. The barter system defines the exchange of goods with other goods instead of money where
money was not available during those days. This is where Traditional Commerce began and has been
continuing till today in the form of exchanging money rather than with only goods. Nowadays Traditional
Commerce lost its popularity and got reduced due to the E-commerce introduction in the early
20th century
Traditional commerce is a branch of business which focuses on the exchange of products and services,
and includes all those activities which encourages exchange, in some way or the other. e-
Commerce means carryng out commercial transactions or exchange of information, electronically on the
internet
Traditional commerce refers to the practice of selling products and services within a single
industry and in some cases, within a specific geographical area. Traditional commerce relies on
operating business hours during a specific period of time and requires housing inventory or occupying a
retail store.
Traditional commerce often relies on face to face interaction with consumers and thrives based on word
of mouth, networking and customer referrals for new and repeat business. Personal interaction is a key
component of businesses experience success with traditional commerce
Differences between e-commerce and traditional commerce
1. Cost effective
E-commerce is very cost effective when compared to traditional commerce. In traditional commerce, cost
has to be incurred for the role of middlemen to sell the company’s product The total overhead
cost required to run e-business is comparatively less, compared to traditional business.
2. Time saving
It takes a lot of time to complete a transaction in traditional commerce. E-commerce saves a lot of
valuable time for both the consumers and business. A product can be ordered and the transaction can be
completed in few minutes through internet
3. Convenience
E-commerce provides convenience to both the customers and the business.
Customers can browse through a whole directories of catalogues, compare prices between products and
choose a desired product any time and anywhere in the world
4. Geographical accessibility
In traditional commerce, it may be easy to expand the size of the market from regional to national level.
Business organizations have to incur a lot of expenses on investment to enter international market. In e-
commerce it is easy to expand the size of the market from regional to international level
6 It helps the organization to enjoy greater profits by increasing sales, cutting cost and streamlining
operating processes. The cost incurred on the middlemen, overhead, inventory and limited sales pulls
down the profit of the organization in traditional commerce
7. Physical inspection
E-commerce does not allow physical inspection of goods. In purchasing goods in e-commerce, whereas in
traditional commerce, it is possible to physically inspect the goods before the purchase.
 8 Human resource
To operate in electronic environment, an organization requires technically qualified staff with an
aptitude to update
Traditional commerce does not have such problems associated with human resource in non electronic
environment.
9 Customer interaction
In traditional commerce, the interaction between the business and the consumer is a “face-to-face” In
electronic commerce, the interaction between the business and the consumer is “screen-to-face”
10 Process
There is an automated processing of business transactions in electronic commerce. It helps to minimize
the clerical errors. There is manual processing of business transactions in traditional commerce
11. Business relationship
The business relationship in traditional commerce is vertical or linear, whereas in electronic commerce
the business relationship is characterized by end-to-end.
12 Fraud in traditional commerce is comparatively less as there is personal interaction between the
buyer and the seller.
Lot of cyber frauds take place in electronic commerce transactions. People generally fear to give credit
card information.
THE SCENARIO OF E COMMERCE
According to Internet and Mobile Association of India (IAMAI) & market research firm IMRB, the number
of mobile internet users in India is estimated to reach around 420 million
 Create your own product
If you are retail startup, then you need to think about to bring the new & exclusive products to the
marketplace. For ex: With the help of special deals with top brands like Nike, Clavin
 Registration
 Basket
 Payment
 Product management
 Orders management
 VAT and shipping costs
Registration
In order to make a purchase, users must register with the site, providing all the information needed for
shipping and billing.
The data will be stored on a database and will be available from the back office.
 Basket
The basket is a tool that, like a shopping basket, allows users to select the products they want and then go
to the checkout for payment. Managing the basket means:summarising user requests within the
possibilities offered by the catalogue
checking the basket and possibly cancel/modify the items placed in it starting the payment process for
the selected products
Payment
The payment system is a mechanism that facilitates dialogue between the parties involved in financial
transactions: the bank, the store and you with your credit card.
cancelled.
Product management
This is the main part of the e-commerce system and provides all the features required for product
placement, order fulfilment, etc.., key to the management of online sales.

In detail the features in the system are:

 Product management: this makes it possible to define a product via a set of standard fields:
o product code
o category
o subcategory
o product name
o description
o image, zoom
o sizes available
o price in euros
o 'pieces' in stock
The products can be searched by category and subcategory.
The back-office feature that allows you to associate related products to further stimulate online sales is
very useful.
 Order management: the order is the card that summarises all the delivery and order information to
enable correct delivery. It includes:
o list of products purchased
o user information
o details of place of delivery
o delivery time information
o payment information
Managing the order means crossing the information on the registration database, the data in the basket,
the delivery information and verification data relating to the payment credit rating.
All this information is summarised in a form identified by a number or reference code (order number).
Listing orders and customer details
From the back office of the site you can search and sort orders by:
 customer
 order status
 date
 payment
Orders may be printed for attachment to the shipment (packing list).
VAT and shipping costs
In addition to the cost of products purchased, the system manages the VAT and the shipping charges.
The e-commerce module is able to manage VAT rates in countries within and outside the EU.
Shipping costs both fixed and variable based on the weight and volume of the shipment.
Discounts
Discounts and promotions are managed for a single product or product category.
This second phase of the site requires a detailed analysis of your current storage and order management
systems with which it will be necessary to integrate
Advantages
E-Commerce advantages can be broadly classified in three major categories −
 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society
Advantages to Organizations
 Using e-commerce, organizations can expand their market to national and international markets
with minimum capital investment. An organization can easily locate more customers, best
suppliers, and suitable business partners across the globe.
 E-commerce helps organizations to reduce the cost to create process, distribute, retrieve and
manage the paper based information by digitizing the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organization to provide better customer services.
 E-commerce helps to simplify the business processes and makes them faster and efficient.
 E-commerce reduces the paper work.
  E-commerce increases the productivity of organizations. It supports "pull" type supply
management. In "pull" type supply management, a business process starts when a request comes
from a customer and it uses just-in-time manufacturing way.
Advantages to Customers
 It provides 24x7 support. Customers can enquire about a product or service and place orders
anytime, anywhere from any location.
 E-commerce application provides users with more options and quicker delivery of products.
 E-commerce application provides users with more options to compare and select the cheaper and
better options.
 A customer can put review comments about a product and can see what others are buying, or see
the review comments of other customers before making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the relevant detailed information
within seconds, rather than waiting for days or weeks.
 E-Commerce increases the competition among organizations and as a result, organizations
provides substantial discounts to customers.
Advantages to Society
 Customers need not travel to shop a product, thus less traffic on road and low air pollution.
 E-commerce helps in reducing the cost of products, so less affluent people can also afford the
products.
 E-commerce has enabled rural areas to access services and products, which are otherwise not
available to them.
 E-commerce helps the government to deliver public services such as healthcare, education, social
services at a reduced cost and in an improved manner.
Disadvantages
The disadvantages of e-commerce can be broadly classified into two major categories −
 Technical disadvantages
 Non-Technical disadvantages
Technical Disadvantages
 There can be lack of system security, reliability or standards owing to poor implementation of e-
commerce.
 The software development industry is still evolving and keeps changing rapidly.
 In many countries, network bandwidth might cause an issue.
  Special types of web servers or other software might be required by the vendor, setting the e-
commerce environment apart from network servers.
 Sometimes, it becomes difficult to integrate an e-commerce software or website with existing
applications or databases.
 There could be software/hardware compatibility issues, as some e-commerce software may be
incompatible with some operating system or any other component.
Non-Technical Disadvantages
 Initial cost − The cost of creating/building an e-commerce application in-house may be very high.
There could be delays in launching an e-Commerce application due to mistakes, and lack of
experience.
 User resistance − Users may not trust the site being an unknown faceless seller. Such mistrust
makes it difficult to convince traditional users to switch from physical stores to online/virtual
stores.
 Security/ Privacy − It is difficult to ensure the security or privacy on online transactions.
 Lack of touch or feel of products during online shopping is a drawback.
 E-commerce applications are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for many potential customers, for
example, those living in remote villages.
 very important E-Commerce models are elaborately explained as follows:
 Business - to - Business (B2B):
 Business - to - Business (B2B) is a transaction that occurs between two companies, as opposed to
a transaction involving a consumer. This term may also describe a company that provides goods
or services for another company. Business - to - Business (B2B) is a transaction that exists
between businesses, such as those involving
 • a manufacturer and wholesaler, or,
 • a wholesaler and a retailer. Website following B2B business model sells its product to an
intermediate buyer who then sells the product to the final customer. 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. Example:
Examples of B2B Model: Let us take an example of www.amazon.com. As we know,
www.flipkart.com is an online store that sells various products from various companies. Assume
that the skyward publishers want to sell the books online. In this case, the publishers have the
option of either developing their own site or displaying their books on the Amazon site
(www.flipkart.com), or both. The publishers mainly choose to display their books on
 www.flikart.com at it gives them a larger audience. Do Now, to do this, the publishers need to
transact with flipkart, involving business houses on the both the ends, is the B2B model. Consider
another example. ABC company sells automobile parts and XYZ company assembles these parts
and then sells the automobile to customers. XYZ company comes across the website of ABC and
finds it suitable. XYZ therefore, a request for more information about ABC and finally, decides to
purchase automobile parts automobile from ABC. To do this, XYZ places an order on the website of
ABC. After ABC receives the order details, it validates the information. As soon as the order is
confirm, the payment procedures are settled. Finally, ABC sends an acknowledgement of payment
to XYZ and delivers the goods as per the shipment details decided between the two organizations.
Following are the leading items in B2B r-Commerce:- Electronics • Shipping and Warehousing •
Motor Vehicles Examples of some of the B2B Websites: 1. www.Getrespons.com: It is an
innovative B2B service based company that has revolutionized the small business email marketing
niche. Providing a web based email marketing platform aimed at the small business owner
wanting to market their own business online. 2. www.Incorporate.com: Incorporate.com who
have reduced the cost and streamlined the process of creating, limited liability companies. In a few
easy steps online, anyone can create their own company for a fraction of the cost a corporate
lawyer would charge The impact of B2B markets on the economy: B2B E-Commerce have a
significant impact on the economy as they help to lower various cost involved in business
transactions. There are the cost areas that are significantly reduced through the conduct of B2B E-
Commerce :
 (a) Search costs: Buyers need not go through intermediaries to search for information about
suppliers, products and prices as in a traditional supply chain. Internet is more efficient
information channel then its traditional counterpart. So effort, time and money can be saved. In
B2B, buyers and sellers are gathered together into a single online trading community and
reducing search cost even further.
 (b )Processing cost: Reduction in the costs of processing transactions (e.g. invoices, purchase
orders and
 payment schemes), as B2B allows for the automation of transaction processes and therefore the
quick implementation of the same compared to telephone and fax.
 (c) Avoid intermediaries: Through B2B e-markets, suppliers are able to interact and transact
directly with buyers there by eliminating intermediaries and distributors.
 (d) Transparency in pricing: The gathering of a large number of buyers and sellers in a single e-
market reveals market price information and transactions processing to participants. Thus
increases the price transparency. Advantages and Disadvantages of B2B Model Advantages:
 • It can efficiently maintain the moment of the supply chain and the manufacturing and procuring
processes.
 • It can automate corporate processes to deliver the right products and services quickly and cost-
effectively.
 • B2B is global trade market, where we can but anything at anytime.
 • Creates new sales opportunities
 • It lowers the search cost and time for buyers to find products and vendors
 • Delay of goods where the earliest to receive goods would be the next day • Some goods cannot be
purchased online such as perishable items
 • Enable to experience the product before purchasing
 • Fraudulent websites and scams • Security issues leading to credit card fraud or identity theft
 (2) Business - to – Consumer(B2C):
 Business - to – Consumer(B2C) is a transaction in which the businesses sells their products or
services to the consumers directly. It refers to the online online selling of products, or, e-tailing, in
which the manufacturers or retailers sell their products directly to the consumers over the
internet. Website following B2C business model sells its product directly to a customer. A
customer can view products shown on the website of business organization. The customer can
choose a product and order the same. Website will send a notification to the business organization
via email and organization will dispatch the product/goods to the customer. Business2consumer
(B2C) : Online transactions are made between businesses and individual consumers e-Tailing
(online retailing)
 Examples: amazon.com, dell.com Examples of B2C Model • Consider an example in which a
transaction is conducted between a business organisation and a consumer. A business house,
www.bagskart.com, displays and sells a range of bags on their Website. The details information of
all their products is wants to buy a gift for his wife. He therefore, logs on to the site and selects a
gift from the catalog. He also gets the detailed information about the gift such as, the price,
availability, discounts, and so on from their catalog. Finally, when he decides to buy the gift, he
places an order for the gift on their Web site. To place an order, he needs to specify his personal
and credit card information on the site. The credit card details will be passed to the bank for
verification. This information is then validated by bank and stored in their database. On
verification of the information the order is processed. Therefore, as we can see, the B2C model
involves transactions between a consumer and one or more business organisations.
 • The example of the www.flipkart.com site also involves the B2C model in which the consumer
searches for a book on their site and places an order, if required. This implies that a complete
 business solution might be an integration solution of more than one business model. For example,
www.flipkart.com includes the B2B model in which the publishers transact with flipkart and the
B2C model in which an individual consumer transact with the business organization. Examples of
some of the B2C Websites: 1. Fashion & Lifestyle Sunglassesindia.com, Brandsndeals.com,
Shopperstop.com 2. Custom designed T-shirt, mug, calendar etc Myntra.com, Zoomin.com 3. Gifts,
cakes etc. Infibeam.com, IndianGiftsPortal.com, Giftsandlifestyle.com Key features of a B2C model:
 • Heavy advertising required to attract large number of customers.
 • High investment in terms of hardware/ software.
 • Support or good customer care service.
 • Consumer Shopping Procedure Steps used in B2C E-Commerce :
 Types of B2C: Different types of B2C Ecommerce are: direct sellers, online intermediaries,
advertisingbased models, community-based models and fee-based models. Each type is so
different from the other that they are not directly comparable. Some B2C businesses utilize more
than one type to reach different audiences. Type of B2C Description
 (a) Direct Sellers Direct sellers, such as online retailers, sell a product or service directly to the
customer via a website. Direct sellers are divided into e-tailers and manufacturers. Etailers are
electronic retailers that either ship products from other their own warehouses or trigger
deliveries from other companies Product manufacturers use the Internet as a catalog and sales
channel to eliminate intermediaries.
 (b) Online Intermediaries Online intermediaries perform the same function as any other broker.
The business allows non-B2C companies to reap some Altering the price-setting processes. Of the
benefits. Brokers offer buyers a service and help by Advantages and Disadvantages of B2C Model:
Advantages:
 1) Advantages for the Business:
 • It can reach worldwide market with unlimited volume of customers.
 • It can display information, pictures, and prices of products or services without spending a
fortune on colourful advertisements.
 • Order processing an easier task than before.
 • It can operate on decreased, little, or even no overhead.
 2) Advantages for the Consumers:
 • Convenience: Consumers can shop at any time of day, from the privacy of their own home.
Internet shopping can be done at time either day or night.
 • Many choice: Consumers is offered many choices for the same products under various brands
 • Less Hassle: Consumers can shop online without hassles like traffic, congestion of the malls etc.
Disadvantages: 1) Disadvantages for the Business:
 • Many websites offering the same product to the customers
 • Technological problems can cause the website to not operate properly thereby loosing the
customer.
 • People are hesitant to enter the credit card details if the website does not have proper security
norms.
 2) Disadvantages for the consumer:
 • Security issues, especially credit card information which is very sensitive. Fraud, rip-offs are
very common on the web.
 • Customer service may not be satisfactory for the consumers.
 (3) Consumer - to - Consumer (C2C):
 C2C, or customer-to-customer, or consumer-to-consumer, is a business model that facilitates the
transaction of products or services between customers. An example of C2C would be the
classifieds section of newspaper, or an auction. In both of these cases, a customer, not a business,
sells goods or services to another customer. The goal of a C2C is to enable this relationship,
helping buyers and sellers locate each other. Customers can benefit from the competition for
products and easily find products that may otherwise be difficult to locate. Website following C2C
business model helps consumer to sell their assets like residential property, cars, motorcycles etc.
or rent a room by publishing their information on the website. Website may or may not charge the
consumer for its services. Another consumer may opt to buy the product of the first customer by
viewing the post/advertisement on the website. consumer-to-consumer (C2C) Consumers sell
directly to other consumers
 Example of Consumer to Consumer (C2C) Model Let us take an example of E-Bay. When a
customer plan to sell his products to other customers on the Website of E-Bay, he first needs to
interact with an E-Bay site, which in this case acts as a facilitator of the overall transaction. Then,
the seller can host his product on www.E-Bay.in which in turn charges him for this. Any buyer can
now browse the site of E-Bay to search for the product he interested in. If the buyer comes across
such a product, he places an order for the same on the Web site of E-Bay. EBay now purchase the
product from the seller and then, sells it to the buyer. In this way, though the transaction is
between two customers, an organization acts as an interface between the two organizations.
Examples of C2C websites:
 1) Craigslist: Craigslist is one of the top websites in the world and the leading service for classified
ads. Consumers can not only buy, sell and trade items, but also conduct other transactions such as
housing and job searches.
 2) E-Bay: E-Bay is a global online shopping and auction website that offers millions of consumers
a wide variety of goods and services. Sellers pay a fee or commission to sell their items and buyers
can shop and make purchases for free. Buyers place bids just like in a traditional auction and only
acquire an item if they are the highest bidder. Monetary transactions are typically completed
through PayPal, a service for online money transfers. Once a transaction is complete, buyers and
sellers can rate each other based on their trustworthiness. 3) Examples of other C2C websites:
 • www.olx.in (internet classified)
 • www.carwale.com (internet classified) • www.gaadi.com (internet classified) Key features of a
C2C model: Consumers interact directly with other consumers. They exchange information such as
:
 • Expert knowledge where one person asks a question about anything and gets an email reply
from the community of other individuals.
 • Opinions about companies and products There is also an exchange of goods between people both
with consumer auction sites such as e-bay, swapitshop.com, where individuals swap goods with
each other without the exchange of money. In more recent times the blogging phenomenon has
incorporated this business model well. The development of online communities with specific
niche interests can gain huge followings. Most current C2C sites, such as E-Bay, have both
streamlined and globalised traditional person-to-person trading, which was usually conducted
through such forms as garage sales, collectibles shows, flea markets and more, with their web
interface. This facilities easy exploration for buyers and enables the sellers to immediately list an
item for sale within minutes of registering. C2C sites make money by charging fees to sellers.
Although it’s free to shop and place bids, sellers place fees to list items for sale, add on
promotional features, and successfully complete transactions. Advantages and disadvantages of
C2C Model: Advantages:
 • Customers can directly contact sellers and eliminate the middle man.
 • Anyone can now sell and advertise a product in the convenience of one’s home.
 • Sellers can reach both national and international customers and greatly increase their market.
 • Feedback on the purchased product helps both the seller and potential customers.
 • The transactions occur at a swift rate with the use of online payments systems such as paypal.
Disadvantages
 • Although online auctions allow one to display his or her products, there is often a fee associated
with such exhibitions. Other times, websites may charge a commission when products are sold.
With the growing use of online auctions, the number of internet-related auction frauds has also
increased.
 • Identity theft has become a rising issue. Scam artists often create sites with popular domain
names such as “e bay “ in order to attract unknowing E-Bay customers. These sites will ask for
personal information including credit card numbers. Numerous cases have been documented in
which users find unknown charges on their credit card statements and withdrawals in their bank
statements after purchasing something online.
 • Illegal or restricted products and services have been found on auction sites. Anything from
illegal drugs, pirated works have appeared on such sites. (4) Consumer - to - Business (C2B):
Definition of Consumer to Business (C2B): Consumer to business E-Commerce refers to the
transactions taking place between consumers to business organisations. The C2B model
completely transposes the traditional business-toconsumer (B2C) model, where a business
produces services and products for consumer consumption. Customer to business (C2B),
sometimes known as Consumer to Business is the most recent ECommerce business model. In this
model, individual customers offer to sell products and services to companies who are prepared to
purchase them. This business model is the opposite of the traditional B2C model. The idea is that
the individual/end user provides a product or service that the business can use to complete a
business process or gain competitive advantage. In this model, a consumer approaches website
showing multiple business organizations for a particular service. Consumer places an estimate of
amount he/she wants to spend for a particular service. For example, comparison of interest rates
of personal loan/ car loan provided by various banks via website. Business organization that fulfils
the consumer's requirement within specified budget approaches the customer and provides its
services. Consumer2business (C2B) Individuals use the Internet to sell products or services to
organizations The C2B model involves a transaction that is conducted between a consumer and a
business organization. It is similar to the B2C model, however, the difference is that in this a case
the consumer is the seller and the business organisation is the buyer. In this kind of a transaction,
the consumers decide the price of a particular product rather than the supplier. This category
includes individuals who sell products and services to organisations. In the C2B model, a
consumer provides a business with a fee-based opportunity to market a product or service on the
consumer’s website or blog. In this type of relationship, a website owner is paid to review the
product or service through blog posts, videos or podcasts. In most cases, paid advertisement space
is also available on the consumer website. For the C2B relationship to be fulfilled, the players must
 be clearly defined. The consumer could be any individual who has something to offer a business,
either a service or a good. Examples could be a blogger, as mentioned before, or a photographer
offering stock images to businesses. This could also be someone answering a poll through a survey
site, or offering job hiring service by referring someone through referral hiring sites. Example of
C2B Model: There are only a few kinds of companies whose trading models could be considered as
C2B.
 • Online Advertising sites like Google Ad sense, affiliation platforms like Commission Junction and
affiliation programs like Amazon are the best examples of C2B schemes. Individuals can display
advertising banners, contextual text ads or any other promotional items on their personal
websites. Individuals are directly commissioned to provide an advertising/selling service to
companies.
 • Online surveys (GozingSurveys, Surveyscout, and Survey Monkey) are also typical C2B models.
Individuals offer the service to reply to the company’s survey and companies pay individual for
this service. Key features of a C2B model: Exchange of products, information or services are from
individuals to business. A classic example of this would be individuals selling their services to
businesses. Steps involved in C2B model:
 • Consumer approaches website showing multiple business organisations for a particular service.
Consumer places an estimate of amount he/she wants to spend for a particular service.
 • Business organisation who fulfils the consumer’s requirement within specified budget
approaches the customer and provides its services.. Example: Comparison of interest rates of
personal loan/ car loan provided by various banks via website.
 Peer – to – to peer (P2P) - A New Model: Definition of Peer to Peer Model: A peer-to-peer (P2P)
network is a type of decentralized and distributed networks architecture in which individuals
nodes in the network (called “peers”) act as both suppliers and consumers of resources, in
contrast to the centralized client-server model where client nodes request access to resources
provided by central servers. Users in a P2P network can pool their resources, sharing each other’s
files, storage systems, and applications, thereby paving the way for extensive collaboration and
efficient information sharing. P2P is not only a E-Commerce type, but also a technology that allows
people to share computer files and computer resources without going through a central web
server. The required software should be installed by both sides so that they can communicate on
the common platform. As from the beginning this type of E-Commerce has been launched to the
free usage, it has quite low revenue. It consists in mutual help of consumers. The main
disadvantage of this model of transaction often entangles cyber laws. Peer – to – to peer (P2P)
technology enables the internet users to share the files and computer resources directly without
 going to the central web server. Therefore, P2P works without an intermediary. Example: (A)
Napster.co., which was established to aid the internet users in finding and sharing the online
music files known as MP3 files, is perhaps the most well known example of Peer – to – to
peer(P2P) E-Commerce . Also, it is important to note that Napster is partially Peer – to – to
peer(P2P), because, it relies on a central database to show which users are sharing the music files.
Since 1999, entrepreneurs and venture capitalists have attempted to adapt various aspects of
peerto-peer technology into peer-to-peer (P2P) E-Commerce . In a peer-to-peer network, tasks
such as searching for files or streaming audio/video are shared amongst multiple interconnected
peers who each make a portion of their resources such as processing power, disk storage or
network bandwidth directly available to other network participants, without the need for
centralized coordination by servers. Security, of course, is a major concern for businesses looking
to implement P2P networks. Since P2P allows users direct access to other’s hard drives. Another
obvious security concern was the heightened need to safeguard against malicious or careless P2P
users uploading viruses directly into other’s computers. P2P or Peer to Peer is sometimes unified
with E-Commerce type, C2C, because of the same parties participating in the transaction. Like C2C
model, P2P model links users, enabling them to share the files and computer resources without a
common server. The focus in P2P companies is on helping individuals make information available
for anyone’s use connecting users on the web. Historically, P2P software technology has been used
to allow the sharing of copyrighted music files in violation of digital copyright law. The challenge
for P2P ventures is to develop viable, legal business models that will enable them to make money
 C2G
 Consumer-to-Government (C2G)
 In this model, an individual consumer interacts with the government. For example,
a consumer can pay his income tax or house tax online. The transactions involved in this case are
C2G transactions. Examples where consumers provide services to government have yet to be
implemented
applications usually include tax payment, issuance of certificates or other documents, etc. Although we
cannot
strictly define consumer or citizen to government as e-Commerce we can see several C2G applications
under the scope of transactions that are done and handled more efficiently and effectively with e-
Commerce systems and technologies
G2G
(Government to Government) is a term that refers to the relationship
between organizations (subjects) of public administration. This designation can be used for any
relationship between subjects of public administration. However, mostly it is used as one of basic
relationships within e-Government models.

Use of the G2G in practice: G2G concept is used as an abbreviation for expressing the relationship
between two government entities. The relationship may refer to the information and data exchange,
business relationship or it can describe the ICT solution that helps in communication between two
federal organizations (e.g. document exchange, sharing public administration registers, cadastral
system, etc.)

The aim of G2G is to enable governments and organizations related to them to more easily work
together and to better serve citizens within key lines of business.

B2G

Business-to-government (B2G) is a business model that refers to businesses selling products, services or
information to governments or government agencies.
B2G networks or models provide a way for businesses to bid on government projects or products that
governments might purchase or need for their organizations. This can encompass public sector
organizations that propose the bids. B2G activities are increasingly being conducted via the Internet
through real-time bidding.

B2G is not an insignificant chunk of business. The federal government alone spends about $8.5 billion a
day. Notably, a portion of its business is supposed to be spent on small business suppliers.

B2A

Business to administration and reverse of it Administration to business looks they are same in
ebusiness models, so that we will try to compare these models of e-business here.

The B2A category covers all transactions that are carried out between businesses and government
bodies using the Internet as a medium. This category has steadily evolved over the last few years.

Example of B2A
An example of a B2A model, is that of Accela.com, a software company that provides round the clock
public access to government services for asset management, emergency response, permitting, planning,
licensing, public health, and public works.

B2P

By B2P meaning is a set of methods for achieving optimal feedback between the business and the end
user. If B2B strategy uses in its arsenal detailed analytical reports about demand, competitive offers and
the amount of investment, then B2P-concept is aimed at the emotional component of advertising and
establishing personal contact with the consumer.

For example, Amazon.com examines preferences of visitors in order to offer another product. Dell
Computers reveals a creative potential of individuals by allowing them to “build their own gadgets”
based on corporation’s components. Companies with pages in social networks could cooperate with fans
through mailings and congratulations on memorable holidays. I.e., firms of all sizes are required to have
several ways for communicating with customers, such as a chat or forum

C2A

Consumer-to-consumer or C2A e-commerce business model encompasses electronic transactions

online between the individuals and the public administration. The C2A e-commerce model helps the
consumers to post their queries and request information regarding public sectors directly from their
local governments/authorities.

UNIT 2
The Internet is our digital information superhighway which we use so ubiquitously today. The term
“online” has become synonymous with the Internet. We are actually almost always online and
sometimes we are not aware of it. This is because of the transparency in service that Internet Service
Providers (ISP) and cellular phone providers have given us. Our Internet plan and Smartphone service
provide data access to the Internet 24/7/365
It all started with ARPANET in October 29, 1969 when the first successful message was sent from a
computer in UCLA to another computer (also called node) at the Stanford Research Institute (SRI).
These computers were called Interface Message Processors (IMP)
TCP/IP — Transmission Control Protocol/Internet Protocol are the standard set of data communications
protocols used on the Internet. It was developed under the DARPA (DoD Advanced Research Projects
Agency) by Robert Kahn and Vint Cerf. It is now a de facto standard for the Internet and is maintained
by the IETF. These protocols are what gave the Internet e-mail, file transfer, newsgroups, web pages,
instant messaging, voice over IP just to name some. This is like a common language that computers use
to communicate with one another on the network.
World Wide Web and HTML — This is credited to Tim Berners-Lee who developed a system that would
allow documents to be linked to other nodes. This was the beginning of hypertext, which are links to
information stored on other computers in the network. Users would no longer need to know the actual
location or computer name to access resources through the use of HTML (Hypertext Markup Language)
hyperlinks. Thus a resource called a website can be accessed that provides these links which can be
clicked with the mouse. This whole linked system became called the World Wide Web and to access
resources on it one must type “www” followed by the domain name “servername.com”.
Browser — The World Wide Web would be useless if not for a software program called a browser. Early
development of the web browser started with Mosaic in 1993. Prior to browsers, there was a software
called Gopher that provided access to websites, but it was tedious and not user friendly. Eventually
more robust features evolved with a new generation of browsers like Mozilla and then Netscape. It was
actually Microsoft’s introduction of Internet Explorer (IE) in 1995 that led to wider adoption of the
World Wide Web and use of the Internet.
Search Engines — In order to get information and content from the Internet, a search engine software
was needed. The early days of searching began with Gopher. It became less popular when browser
based search engines emerged. Other web based systems evolved like Lycos, Yahoo and Webcrawler.
Then Google appeared toward the late 1990’s and became the most popular search engine. It was simple
and fast, offering the best way for users to get information on the Internet. The term “google” now
became synonymous with searching on the Internet and is also the most well known search engine.
Internet Service Providers — The early days of the Internet required a dial-up modem connected to a
telephone line with data speeds of 14.4–28.8 kbps. That was sufficient to meet the data demands during
the late 80’s and early 90’s since most Internet was text based. As the Internet grew more popular and
businesses began to adopt it, more content required faster data speeds. This led to Internet Service
Providers (ISP) beginning with the likes of AOL bundling service by mailing free CD software to
encourage users to sign up. The catch was getting an e-mail address and free hour of Internet use. ISP’s
continued to improve service by offering faster DSL and ADSL service as alternatives to dial-up. DSL
service bumped speeds up to 128 kbps. Cable companies then provided even faster Internet speed using
cable modems that became known as broadband service. The infrastructure was built by
telecommunications companies and cable TV giants to offer even faster speeds that would allow users to
stream video, chat, browse active content on the web, video conference and faster data downloads.
Cable modem speeds, based on DOCSIS (Data Over Cable Service Interface Specification) offer speeds
between 20 to 100 Mbps and even greater (depends on how many users are connected on the
subscriber circuit).
Basic Network architecture
Computer Network Architecture is defined as the physical and logical design of the software, hardware,
protocols, and media of the transmission of data. Simply we can say that how computers are organized
and how tasks are allocated to the computer.
o Peer-To-Peer network
o Client/Server network
Peer-To-Peer network
o Peer-To-Peer network is a network in which all the computers are linked together with equal
privilege and responsibilities for processing the data.
o Peer-To-Peer network is useful for small environments, usually up to 10 computers.
o Peer-To-Peer network has no dedicated server.
Advantages of a peer-to-peer network
 Does not require a dedicated server which means its less costly.
 If one computer stops working, the other computers connected to the network will continue
working.
 Installation and setup is quite painless because of the built-in support in modern operating
systems.
Disadvantages of a peer-to-peer network
 Security and data backups are to be done to each individual computer.
 As the numbers of computers increases on a P2P network... performance, security, and access
becomes a major headache.
Client/Server Network
o Client/Server network is a network model designed for the end users called clients, to access the
resources such as songs, video, etc. from a central computer known as Server.
o The central controller is known as a server while all other computers in the network are
called clients.
o A server performs all the major operations such as security and network management.
o A server is responsible for managing all the resources such as files, directories, printer, etc.
o All the clients communicate with each other through a server.
Advantages of a client/server network
 Resources and data security are controlled through the server.
 Not restricted to a small number of computers.
 Server can be accessed anywhere and across multiple platforms.
Disadvantages of a client/server network
 Can become very costly due to the need of a server as well as networking devices such as hubs,
routers, and switches.
 If and when the server goes down, the entire network will be affected.
 Technical staff needed to maintain and ensure network functions efficiently.
NIC
  NIC stands for network interface card.
 NIC is a hardware component used to connect a computer with another computer onto a
network
 It can support a transfer rate of 10,100 to 1000 Mb/s.
Hub
A Hub is a hardware device that divides the network connection among multiple devices. When
computer requests for some information from a network, it first sends the request to the Hub through
cable. Hub will broadcast this request to the entire network. All the devices will check whether the
request belongs to them or not. If not, the request will be dropped.
Switch
A switch is a hardware device that connects multiple devices on a computer network. A Switch contains
more advanced features than Hub. The Switch contains the updated table that decides where the data is
transmitted or not. Switch delivers the message to the correct destination based on the physical address
present in the incoming message. A Switch does not broadcast the message to the entire network like
the Hub. It determines the device to whom the message is to be transmitted. Therefore, we can say that
switch provides a direct connection between the source and destination. It increases the speed of the
network
Router
 A router is a hardware device which is used to connect a LAN with an internet connection. It is
used to receive, analyze and forward the incoming packets to another network.
 A router works in a Layer 3 (Network layer) of the OSI Reference model.
 A router forwards the packet based on the information available in the routing table.
 It determines the best path from the available paths for the transmission of the packet.
Modem
 A modem is a hardware device that allows the computer to connect to the internet over the
existing telephone line.
 A modem is not integrated with the motherboard rather than it is installed on the PCI slot found
on the motherboard.
 It stands for Modulator/Demodulator. It converts the digital data into an analog signal over the
telephone lines.


Network Architecture Basics

Physical
This layer is the actual physical media that carries the data. Different types of media use different
standards. For example, coaxial cable, unshielded twisted pair (UTP), and fiber optic cable each serve a
different purpose: coaxial cable is used in older LAN installations as well as Internet service through
cable TV networks, UTP is generally used for in-house cable runs, while fiber optic is generally used for
long-haul connections that require a high load capacity.
Data Link
This layer relates to different pieces of network interface hardware on the network. It helps encode the
data and put it on the physical media. It also allows devices to identify each other when trying to
communicate with another node. An example of a data link layer address is your network card's MAC
address. (No, the MAC address doesn't have anything to do with Apple computers; it's the Medium
Access Control number that uniquely identifies your computer's card on the network.) On an Ethernet
network, MAC addresses are the way your computer can be found. Corporations used many different
types of data link standards in the 1970s and 80s, mostly determined by their hardware vendor. IBM
used Token Ring for their PC networks and SNA for most of their bigger hardware, DEC used a different
standard, and Apple used yet another. Most companies use Ethernet today because it is widespread and
cheap.
Network
This layer is the first part that you really see when interacting with TCP/IP networks. The network layer
allows for communications across different physical networks by using a secondary identification layer.
On TCP/IP networks, this is an IP address. The IP address on your computer helps get your data routed
from place to place on the network and over the Internet. This address is a unique number to identify
your computer on an IP-based network. In some cases, this number is unique to a computer; no other
machine on the Internet can have that address. This is the case with normal publicly routable IP
addresses. On internal LANs, machines often use private IP address blocks. These have been reserved
for internal use only and will not route across the Internet. These numbers may not be unique from
network to network but still must be unique within each LAN. While two computers may have the same
private IP address on different internal networks, they will never have the same MAC address, as it is a
serial number assigned by the NIC manufacturer. There are some exceptions to this (see the sidebar
Follow the MAC), but generally the MAC address will uniquely identify that computer (or at least
Transport
This level handles getting the data packet from point A to point B. This is the layer where the TCP and
UDP protocols reside. TCP (Transmission Control Protocol) basically ensures that packets are
consistently sent and received on the other end. It allows for bit-level error correction, retransmission
of lost segments, and fragmented traffic and packet reordering. UDP (User Datagram Protocol) is a
lighter weight scheme used for multimedia traffic and short, low-overhead transmissions like DNS
requests. It also does error detection and data multiplexing, but does not provide any facility for data
reordering or ensured data arrival. This layer and the network layer are where most firewalls operate.
Session
The session layer is primarily involved with setting up a connection and then closing it down. It also
sometimes does authentication to determine which parties are allowed to participate in a session. It is
mostly used for specific applications higher up the model.
Presentation
This layer handles certain encoding or decoding required to present the data in a format readable by the
receiving party. Some forms of encryption could be considered presentation. The distinction between
application and session layers is fine and some people argue that the presentation and application
layers are basically the same thing.
Application
This final level is where an application program gets the data. This can be FTP, HTTP, SMTP, or many
others. At this level, some program handling the actual data inside the packet takes over. This level gives
security professionals fits, because most security exploits happen here.
Web Application Architecture?

Web Application Architecture is a framework that is comprised of the relationships and

interactionsbetween application components, such as middleware systems, user interfaces, and
databases.

 A user browses for a specific URL, which the browser locates and requests.

 Over the network, data is sent from the server to the browser, then executed by the browser so
that it is able to display the requested page.

 The user views and interacts with the page.

 UI/UX Web Application Components – This includes activity logs, dashboards, notifications,
settings, statistics, etc. These components have nothing to do with the operation of a web
application architecture. Instead, they are part of the interface layout plan of a web app.
 Structural Components – The two major structural components of a web app are client and
server sides.
 Client Component - The client component is developed in CSS, HTML, and JS. As it exists within
the user’s web browser, there is no need for operating system or device-related adjustments. The
client component is a representation of a web application’s functionality that the end-user
 interacts with.
 Server Component - The server component can be build using one or a combination of several
programming languages and frameworks, including Java, .Net, NodeJS, PHP, Python, and Ruby on
Rails. The server component has at least two parts; app logic and database. The former is the
main control center of the web application while the latter is where all the persistent data is sto

Models of Web Application Components

1. One Web Server, One Database

It is the most simple as well as the least reliable web app component model. Such a model uses a single
server as well as a single database. A web app builds on such a model will go down as soon as the server
goes down. Hence, it isn’t much reliable.

2. Multiple Web Servers, One Database (At a Machine Rather than the Web server)

The idea with this type of web application component model is that the webserver doesn’t store any
data. When the webserver gets information from a client, it processes the same and then writes it to the
database, which is managed outside of the server. This is sometimes also referred to as a stateless
architecture.

3. Multiple Web Server, Multiple Databases

It is the most efficient web application component model because neither the webservers nor the
databases have a single point of failure. There are two options for this type of model. Either to store
identical data in all the employed databases or distribute it evenly among them

HTTP - Overview

The Hypertext Transfer Protocol (HTTP) is an application-level protocol for distributed, collaborative,
hypermedia information systems. This is the foundation for data communication for the World Wide
Web (i.e. internet) since 1990. HTTP is a generic and stateless protocol which can be used for other
purposes as well using extensions of its request methods, error codes, and headers.

Basic Features

HTTP is connectionless: The HTTP client, i.e., a browser initiates an HTTP request and after a request is
made, the client waits for the response. The server processes the request and sends a response back
after which client disconnect the connection

HTTP is media independent: It means, any type of data can be sent by HTTP as long as both the client
and the server know how to handle the data content.

HTTP is stateless: As mentioned above, HTTP is connectionless and it is a direct result of HTTP being a
stateless protocol. The server and client are aware of each other only during a current request.
Afterwards, both of them forget about each other. Due to this nature of the protocol, neither the client
nor the browser can retain information between different requests across the web pages.

Basic Architecture

The following diagram shows a very basic architecture of a web application and depicts where HTTP
sits:

The HTTP protocol is a request/response protocol based on the client/server based architecture where
web browsers, robots and search engines, etc. act like HTTP clients, and the Web server acts as a
server.
Client

The HTTP client sends a request to the server in the form of a request method, URI, and protocol
version, followed by a MIME-like message containing request modifiers, client information, and
possible body content over a TCP/IP connection.

Server

The HTTP server responds with a status line, including the message's protocol version and a success or
error code, followed by a MIME-like message containing server information, entity meta information,
and possible entity-body content

HTTP is an extensible protocol that is easy to use. The client-server structure, combined with the ability
to simply add headers, allows HTTP to advance along with the extended capabilities of the Web.

URL

A uniform resource locator (URL) is the address of a resource on the Internet. A URL indicates the
location of a resource as well as the protocol used to access it.

A URL contains the following information:

 The protocol used to a access the resource

 The the location of the server (whether by IP address or domain name)
 The port number on the server (optional)
 The location of the resource in the directory structure of the server
 A fragment identifier (optional)

Parts of a URL

Using the URL https://whatis.techtarget.com/search/query?q=URL as an example, components of a

URL can include:

 The protocol or scheme. Used to access a resource on the internet. Protocols include http, https,
ftps, mailto and file. The resource is reached through the domain name system (DNS) name. In this
example, the protocol is https.

 Host name or domain name. The unique reference the represents a webpage. For this example,
whatis.techtarget.com.
 Port name. Usually not visible in URLs, but necessary. Always following a colon, port 80 is the
default port for web servers, but there are other options. For example, :port80.

 Path. A path refers to a file or location on the web server. For this example, search/query.

 Query. Found in the URL. The query consists of a question mark, followed by parameters. For this
example, ?.

 Parameters. Pieces of information in a query string of a URL. Multiple parameters can be separated
by ampersands (&). For this example, q=URL.

 Fragment. This is an internal page reference, which refers to a section within the webpage. It
appears at the end of a URL and begins with a hashtag (#). Although not in the example above, an
example could be #history in the URL https://en.wikipedia.org/wiki/Internet#History.

Unit 3
A website following the B2B business model sells its products to an intermediate buyer who then sells
the products to the final customer. As an example, a wholesaler places an order from a company's
website and after receiving the consignment, it sells the endproduct to the final customer who comes to
buy the product at the wholesaler's retail outlet.

B2B identifies both the seller as well as the buyer as business entities. B2B covers a large number of
applications, which enables business to form relationships with their distributors, re-sellers, suppliers,
etc. Following are the leading items in B2B eCommerce.
 Electronics
 Shipping and Warehousing
  Motor Vehicles
 Petrochemicals
 Paper
 Office products
 Food
 Agriculture
Key Technologies
Following are the key technologies used in B2B e-commerce −
 Electronic Data Interchange (EDI) − EDI is an inter-organizational exchange of business
documents in a structured and machine processable format.
 Internet − Internet represents the World Wide Web or the network of networks connecting
computers across the world.
 Intranet − Intranet represents a dedicated network of computers within a single organization.
 Extranet − Extranet represents a network where the outside business partners, suppliers, or
customers can have a limited access to a portion of enterprise intranet/network.
 Back-End Information System Integration − Back-end information systems are database
management systems used to manage the business data.
Architectural Models
Following are the architectural models in B2B e-commerce −
 Supplier Oriented marketplace − In this type of model, a common marketplace provided by
supplier is used by both individual customers as well as business users. A supplier offers an e-
stores for sales promotion.
 Buyer Oriented marketplace − In this type of model, buyer has his/her own market place or e-
market. He invites suppliers to bid on product's catalog. A Buyer company opens a bidding site.
 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.
SUPPLIER-ORIENTED MARKETPLACE
The most common model is the supplier-oriented marketplace. Most of the manufacturerdriven
electronic stores belong to this category. In this model, both individual consumers and business buyers
use the same supplier-provided marketplace as depicted in Figure below.
Characteristics of the Supplier-Oriented Marketplace Supplier-Oriented Marketplaces offer a group of
customers a wide spectrum of products and services and also support them in their own business.
Furthermore, there are large potentials through customer communities, individualized products and
direct customer-relationships. By using Supplier-Oriented Marketplaces, suppliers are offered new
types of market channels in marketing and distribution. Products can be sold directly to the customer
without using intermediaries.
Example of the Supplier-Oriented Marketplace: Cisco Connection Online Case11 Cisco uses the Supplier-
Oriented Marketplace successfully. The market is operated by Cisco Connection Online. In 1997 Cisco
sold more than US$ 1 billion online (total: US$ 6.4 billion) of routers, switches and other network
interconnect devices.
Online Ordering
Cisco builds virtually all its products to order, so there are very few off-the-shelf products. Before the
Cisco Web site, ordering a product could have been lengthy and complicated. Cisco began deploying
Web-based commerce tools in July 1995, and as of July 1996, the Internet Product Center allowed users
to purchase any Cisco product over the Web. In 1999, the same customer's engineer could sit down at a
PC, configure a product online, know immediately if there are any errors, and route the order to its
procurement department.
Finding Order Status Each month in 1998 Cisco's Web site received about 150,000 order status
inquiries such as: "When will the order be ready? How should it be classified for customs? Is it eligible
for NAFTA? What export control issues apply?" Cisco gives customers the tools on its Web site to find
the answers by themselves. In addition, Cisco records a shipping date, the method of shipment, and the
current location of each product. The company's primary domestic and international freight forwarders
regularly update Cisco's database electronically with the status of each shipment, typically by EDI. The
new information in the database automatically updates Cisco's Web site, keeping the customer current
on the movement of each order. As soon as an order ships, Cisco sends the customer a notification
message by e-mail or fax.
Benefits
• Reduced operating cost: Cisco estimates that putting its applications online in 1998 saved the
company $363 million per year, or approximately 17.5 percent of the total operating costs.
• Enhanced technical support and customer service: With 70 percent of its technical support and
customer service calls handled online, Cisco's technical support productivity has increased by 200
percent to 300 percent peryear.
• Reduced technical support staff cost: The online technical support reduced technical support staff
costs by roughly $125 million.
• Reduced software distribution cost: Customers download new software releases directly from Cisco's
site, saving the company $180 million in distribution, packaging, and duplicating costs. Having product
and pricing information on the Web and Webbased CD-ROMs saves Cisco an additional $50 million in
printing and distributing catalogs and marketing materials to customers.
BUYER-ORIENTEDMARKETPLACE Under the platform of supplier-oriented marketplace, the buyer's
acquisition department has to manually enter the order information into its own corporate information
system. Searching estores and e-mails to find and compare suppliers and products can be very costly to
companies like GE, who purchase thousands of items on the Internet. Therefore, such big buyers would
prefer to open their own marketplace, which we call the buyer-oriented marketplace, as depicted in
Figure below. Under this model, a buyer opens an electronic market on its own server and invites
potential suppliers to bid on the announced RFQs, as the GE case illustrates. This model offers a greater
opportunity to committed suppliers.
By supporting transactions and procurement processes, these marketplaces offer great potentials in
cost savings. Buyer-Oriented Marketplaces are found in industrial sectors with few and dominant
buyers.
guidelines for transactions 12 Turban
Internet-based product and supplier catalogue
- availability check - informational support of negotiations
- invitation to bid in auctions and submissions
- catalogue ordering
- support of transactions
- delivery inspection
- quality management
BENEFITS TO BUYERS
The GE TPN Post system can improve the productivity of the buyer's sourcing process and allow buyers
to access quality goods and services from around the world. This larger pool of suppliers fosters
competition and enables the buyers to spend more time negotiating the best deals and less time on
administrative procedures. The benefits of joining GE TPN Post as buyers are:
• Identifying and building partnerships with new suppliers worldwide
• Strengthening relationships and streamlining sourcing processes with cur rent business partners
• Rapidly distributing information and specifications to business partners
• Transmitting electronic drawings to multiple suppliers simultaneously
• Cutting sourcing cycle times and reduce costs for sourced goods
• Quickly receiving and comparing bids from large numbers of suppliers to negotiate better prices •
Since GE has opened TPN to other buyers, this benefit can be shared with other companies; but GE can
earn fees from them. BENEFITS TO SELLERS
Sellers in the GE TPN Post system can gain instant access to global buyers with over $1 billion in
purchasing power. Sellers may dramatically improve the productivity of bidding and sales activities.
The benefits of joining GE TPN Post as sellers are:
• Boosted sales
• Expanded market reach
• Lowered costs for sales and marketing activities
• Shortened selling cycle
• Improved sales productivity
• Streamlined bidding process
Intermediary-Oriented Marketplace
Just in Time (JIT)

The just-in-time (JIT) inventory system is a management strategy that aligns raw-material orders from
suppliers directly with production schedules. Companies employ this inventory strategy to increase
efficiency and decrease waste by receiving goods only as they need them for the production process,
which reduces inventory costs. This method requires producers to forecast demand accurately.
The JIT inventory system contrasts with just-in-case strategies, wherein producers hold sufficient
inventories to have enough product to absorb maximum market demand.
One example of a JIT inventory system is a car manufacturer that operates with low inventory levels but
heavily relies on its supply chain to deliver the parts it requires to build cars, on an as-needed basis.
Consequently, the manufacturer orders the parts required to assemble the cars, only after an order is
received.
Just-in-Time (JIT) Inventory System Advantages
JIT inventory systems have several advantages over traditional models. Production runs are short,
which means that manufacturers can quickly move from one product to another. Furthermore, this
method reduces costs by minimizing warehouse needs. Companies also spend less money on raw
materials because they buy just enough resources to make the ordered products and no more.
Disadvantages of the Just-in-Time System
The disadvantages of JIT inventory systems involve potential disruptions in the supply chain. If a raw
materials supplier has a breakdown and cannot deliver the goods in a timely manner, this could
conceivably stall the entire production process. A sudden unexpected order for goods may delay the
delivery of finished products to end clients
Example of Just-in-Time
Famous for its JIT inventory system, Toyota Motor Corporation orders parts only when it receives new
car orders. Although the company installed this method in the 1970s, it took 15 years to perfect it.
Intermediary-Oriented Marketplace
Characteristics of the Intermediary-Oriented Marketplace This business model is established by an
intermediary company which runs a marketplace where business buyers and sellers can meet. There
are two types of Intermediary-Oriented Marketplaces: horizontal and vertical marketplaces. Vertical
marketplaces concentrate on one industrial sector whereas horizontal marketplaces offer services to all
industrial sectors.
Intermediary-Oriented Marketplace is a neutral business platform and offers the classical economic
functions of a usual market. The difference is that the participants do not have to be physically present.
There are thousands of Intermediary-Orientated Marketplaces and many of them are very different in
the services they offer. These marketplaces can contain a “virtual catalogue of the industrial sector”.
Companies have the possibility to present themselves in this virtual catalogue. On an Internet based
“notice board” single offers or requests of companies can be found.
Example of the Intermediary-Oriented Marketplace: Buzzsaw25
There are varied business relationships between all participants. The complex structure leads to
inefficient processes of planing and communication. Buzzsaw offers software to improve planning and
communication between the parties. This helps reducing the usual overspending of the project’s budget
and schedule. The heart of Buzzsaw’s services is a software, which administrates the construction
project (administrator). This software can be used to carry out the entire construction plan of many
participants involved in the process. Functions like e.g. the design, the planning of the project and the
supervision of the building’s progress can be supported. Buzzsaw also offers detailed information about
the building industry (e.g. news affecting the sector, a classified directory and a local weather forecast).
The marketplace also provides the option to do business. All products relevant for the building industry
can be traded
Auction and Service
in real-time auctions online. Simply referred to as Internet or B2B auctions, these websites and
software packages operate across a range of industries and instantly connect buyers and vendors on an
international scale in real-time. One of the most prominent examples of this technology is the nationally
renowned Exchange and Mart website, which sells a wide range of vehicles online to both private and
commercial clients. The most simplistic and effective type of auction site, vendors can sell to the highest
bidder without incurring significant marketing costs
While this type of website is more synonymous with private or residential users, there are more
advanced and complex systems available for commercial transactions. The advantages remain largely
unchanged, however, except for the fact that business owners can benefit even further through reduced
marketing, sale and distribution costs. In addition to accessing a global target audience in real-time,
companies can also shift products in volume and maximise their bottom line profitability. This has
resulted in the widespread adaptation and development of B2B auction software, with statistics
suggesting that an estimated 25% of all e-commerce transactions occur though associated platforms.
The role software agent in b2b e commerce
oftware agents provide security to the information. ... Business needs lots of communication skills
which is provided by software agents. Software agents are responsible for customer satisfaction in
terms of B2B E-commerce. Software agents can be thus proved as an important entity with respect to E-
Commerce
Software agents furnish protection to the information. Since E-commerce administers with business
online, protection plays the heart of the business. Software agents are accountable for consumer relief
in expressions of B2B E-commerce. Software representatives can be thus proved as an essential entity
with regard to E-Commerce. Some of the important roles of a software agent in b2b e-commerce are as
follows;Software representatives can do their duty without any outsource interference.Social
communication with other software agents and human.Software representatives are explicit in their
purposes.The good software instrument is the one which has the position to accept and adopt changes.
The agent must be programmed in a strong language so as to display the rules.
Software Agents (SAs) to e-commerce systems (it is assumed that providers are already associated with
SAs). We studied why, how, and when users could entrust a part of the e-commerce operations they
undertake to SAs [1]. Usually, most of these operations are complex and though repetitive with a large
segment suitable for computer aids and automation. In addition, users are already overwhelmed with
information that needs to be filtered and sorted out before this information could be used efficiently
and effectively. To assist users in their daily e-commerce operations, we suggest first, associating users
with software agents and second, decomposing an e-commerce scenario into three phases:
investigation, negotiation, and settlement. This is illustrated in Figure 1 where texts in italic summarize
the operations that occur and their outcome. Currently, several implementations of agent-based e-
commerce systems are available on the Internet
In an e-commerce scenario, agents are in charge of multiple operations that can be summarized as
follows: ? Investigation phase:
o Build users’ profile based on their interests and needs;
o Map users’ needs into requests;
o Suggest modifications to users’ requests;
o Recommend products/services based on users’ requests and agents’ experiences;
o Be aware of the market trends for notification purposes;
o Recommend alternate products/services in case of the investigation phase fails;
o And, compare products/services. ?
Negotiation phase:
o Keep track of changing negotiation conditions;
o Recommend negotiation strategies based on users’ requests;
o Suggest to users to relax/not-relax certain constraints in case of the negotiation phase fails.
o Switch from one provider to another during negotiations while retaining negotiation contexts;
o Compare negotiations’ results;
o And, recommend to users the decisions to make. ? Settlement phase: o Pay for the agreed upon
products/services; o Enforce the clauses of the signed contracts;
o Ensure that the agreed upon products/services are delivered; o Notify users in case of delays and
assess the consequences of these delays;
o And, suggest corrective action
Managerial issue in B2B marketing
The need for customer-specific pricing. ...

Customers with incredibly tight delivery schedules. ...

Promote multiple product lines or brands under one parent company. ...

Branch into B2C while avoiding multi-channel sales conflicts. ...

Too many products with only slight variations. ...

The need to custom-configure products.

Other management issues which arise are primarily related to managing change so as to ensure system
acceptance. This issue has often been associated with education and training and was recognised as a
partly controllable factor

While there was an initial reluctance to participate in such mandated initiatives, in the more recent
developments, the case appreciated the benefits of such systems and the initiatives have successfully
obtained participation from business

Regardless of the high expectations concerning the use of Internet-based B2B eCommerce in Australia,
we found that the over-riding issue was its relatively slow adoption by almost all our case study
participants. This “slow adoption” further confirms recent studies undertaken overseas

Unit 4
E-Commerce - Payment Systems
E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by reducing the
paperwork, transaction costs, and labor cost. Being user friendly and less time-consuming than manual
processing, it helps business organization to expand its market reach/expansion. Listed below are some
of the modes of electronic payments −
Credit Card
Debit Card
Smart Card
E-Money
Electronic Fund Transfer (EFT)
Credit Card
Payment using credit card is one of most common mode of electronic payment. Credit card is small
plastic card with a unique number attached with an account. It has also a magnetic strip embedded in it
which is used to read credit card via card readers. 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. It is usually credit card monthly payment cycle. Following are
the actors in the credit card system.
The card holder − Customer
The merchant − seller of product who can accept credit card payments.
The card issuer bank − card holder's bank
The acquirer bank − the merchant's bank
The card brand − for example , visa or Mastercard.
Credit Card Payment Proces
 Step Description
 Step 1 Bank issues and activates a credit card to the customer on his/her request.
 Step 2 The customer presents the credit card information to the merchant site or to the
merchant from whom he/she wants to purchase a product/service.
 Step 3 Merchant validates the customer's identity by asking for approval from the card brand
company.
 Step 4 Card brand company authenticates the credit card and pays the transaction by credit.
Merchant keeps the sales slip.
 Step 5 Merchant submits the sales slip to acquirer banks and gets the service charges paid to
him/her.
 Step 6 Acquirer bank requests the card brand company to clear the credit amount and gets the
payment.
 Step 6 Now the card brand company asks to clear the amount from the issuer bank and the
amount gets transferred to the card brand company.
Debit Card
Debit card, like credit card, is a small plastic card with a unique number mapped with the bank account
number. It is required to have a bank account before getting a debit card from the bank. The major
difference between a debit card and a credit card is that in case of payment through debit card, the
amount gets deducted from the card's bank account immediately and there should be sufficient balance
in the bank account for the transaction to get completed; whereas in case of a credit card transaction,
there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card readily.
Having a restriction on the amount that can be withdrawn in a day using a debit card helps the customer
to keep a check on his/her spending.
Smart Card
Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or
personal information. Smart cards are also used to store money and the amount gets deducted after
every transaction.
Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards are
secure, as they store information in encrypted format and are less expensive/provides faster processing.
Mondex and Visa Cash cards are examples of smart cards.
E-Money
E-Money transactions refer to situation where payment is done over the network and the amount gets
transferred from one financial body to another financial body without any involvement of a middleman.
E-money transactions are faster, convenient, and saves a lot of time.

Secure Socket Layer (SSL)

It is the most commonly used protocol and is widely used across the industry. It meets following
security requirements –
For shoppers and even banking institutions to feel confident that their electronic transactions were safe
on the internet, there needed to be a universally accepted protocol used by all consumers and vendors.
These safety measures also had to work across different platforms and applications, such as HTTP,
Telnet and FTP for example.
So in 1994, Netscape rolled out SSL and within a year this became the most widely accepted way to
encrypt data, provide client and vendor authentications and secure the integrity of data transmitted
over insecure networks. In other words, SSL is a digital certificate that establishes trust between
entities.
SSL tends to be used to secure data in emails, web browsers, internet faxing, instant messaging and
VoIP. Since SSL uses a mix of plain text and encrypted text, SSL had become vulnerable to attack and
some larger organizations, notably the US Government, have decided not to send sensitive data using
SSL protocols.
This problem came to a head in 2013 when Google realized there was a very serious problem with the
security of SSL 3.0, allowing hackers to access passwords and reveal users’ account information on
websites. So any website that uses SSL 3.0 is vulnerable to this type of attack,

 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.
This protocol using a combination of public - private key cryptography and digital certificate [13] so it
provides communications privacy over the Internet. SSL provides a private between the server and the
client. A handshake between the cardholder’s browser and the merchant server has a role in the
encryption process of the information transmitted by the cardholder [7] [8]. International Journal of
Computer Science & Information Technology (IJCSIT) Vol 9, No 2, April 2017 119 Figure 3 shows
transferring sensitive data over the internet via SSL connection in order to,only the server is
authenticated using a digital certificate. Figure 3. SSL Secured Connection Steps [25] 5.2.1 SSL Protocol
for Securing Data We need to force the web pages with sensitive data to be accessed through SSL as it’s
important to use it for securing the data that passes between the server and the client’s browser. In
case for example, if customer tried to access the next link http://localhost/mobileshop/credit-card-
details/ , the customer should be redirected to https://localhost/mobileshop/credit-card-details/ At
the same time, enforcing SSL protocol will not needed in all places of the site, and because that makes
web pages invisible to search engines and reduces performance. We want to make sure that the,
customer logout, customer registration, and modification pages detail of customer are accessible only
via SSL.
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration. Theoretically, it is the best
security protocol. It has the following components −
 Card Holder's Digital Wallet Software − Digital Wallet allows the card holder to make secure
purchases online via point and click interface.
  Merchant Software − This software helps merchants to communicate with potential customers
and financial institutions in a secure manner.
 Payment Gateway Server Software − Payment gateway provides automatic and standard
payment process. It supports the process for merchant's certificate request.
 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.
 SET is a very
comprehensive protocol.It
SSL is basically an encryption provides Privacy, integrate
mechanism for order taking, and authenticity.It is not
queries and other applications used frequently due to its
and available on customer’s complexity and the need
browser. It does not protect for a special card reader by
against all security hazards and the user. it may be
is natural simple and widely abandons if it is not
used. simplified.
SSL is a protocol for general SET is tailored to the credit
purpose secure message card payment to the
exchange. merchant.
SSL protocol may use a SET protocols hides the
certificate, but the payment customer’s credit card
gateway is not available .so, the information from merchant
merchant need to receive both and also hides the order
the ordering information and information to banks to
credit card information because protect privacy called dual
the capturing process should be signature.
generated by merchant. SET protocol is a complex
SSl protocol has been the and more secure protocol.
industry standard for securing SET protocol was jointly
internet communication. developed by MasterCard
SSL protocol was developed by and visa with the goal of
Netscape for securing online securing web browsers for
transaction. bank card transaction.

Security schemes in E-payment system

yment System As electronic payment system increased the opportunity for the fraud on the web,
security is becoming an important component of electronic payment system.
Public Key Infrastructure (PKI): PKIs provide a systematic framework to generate, distribute, and
maintain the cryptographic key pairs78 required for achieving properties like authentication,
authorization, data confidentiality, data integrity, non-repudiation of communications over Internet,
Public Key cryptograph
A key advantage of PKC86 is that it permits individuals to use two different but related keys to
authenticate each other and maintain the confidentiality and integrity of their communications. It also
allows them to digitally sign87 a document or a transaction. One key, the private key is kept secret by
the owner, while the other, the public key, can be widely distributed. The two keys are mathematically
related, but an important feature is that it is computationally unfeasible to derive one key from the
knowledge of the other; PKC provides an easy mechanism for the data encryption and integrity (e.g.,
SSL). The authentication of these parties,
Digital Signature: a digital signature in the electronic world (e.g., in an exchange of payment
information) provides same kind of characteristics90 that are expected from a handwritten signature in
the paper-based world. It is applicable to providing authentication of the signer, integrity of information
being signed and nonrepudiation of the transaction. Digital signatures are being used for the protection
electronic payment, exchange of information via web browser,
digital certificate

A digital certificate is an electronic identification card that establishes a user’s authenticity in the
electronic world. The digital certificate (conceptually similar to credit card) contains information, such
as name, e-mail address, a serial number, expiration dates, a copy of certificate holder’s public key and
the digital signature of the certificate- issuing authority so that a recipient can verify that the certificate
is real.
Firewalls: the most commonly accepted network protection is a barrier-a firewall "-between the
corporate network and the outside (untrusted) world (Kalakota and Whinston, 2004),0°. A firewall
protects networked computers from intentional hostile intrusion that could compromise confidentiality
or result in data corruption or denial
There are two access denial methodologies used by firewalls. A firewall may allow or deny all traffic
unless it meets certain criteria. The types of criteria used to determine whether traffic should be
allowed through varies from one type of firewall to another. Firewall may be concerned with the type of
traffic, or with source of destination addresses and ports.
Non-technoiogical Measures for Securing Electronic Payment
• Never send credit card details by e-mail. Pay attention to credit card billing J * ,1AO^ cycles, and follow
up the creditors if bill do not arrive on time (Sumanjeet) . This could be a sign that someone has changed
the address or other information from the consumer file to hide illegal changes from consumer.
• Make a print out of all the web pages or e-mail directly related to the purchase, so that the consumer
will have complete records on the event of any problem.
• When making payment online, check the lock or icons on the screen to make sure that the site is
secure. A broken icon indicates that the site is not secure.
Sign on the signature panel ofthe debit card immediately upon the receipt. And protect the magnetic
strip from the exposure to direct sunlight, magnets and scratches.
• Never keep a copy of PIN (Personal Identification Number) in wallet and never write PIN number on
the card.
• Keep a photocopy offront and back of card.
• In case the card is stolen/misplaced110 call bank help line to inform about the same.
• Keep the charge slips safe, to tally them against the billing statement.
• Never have PIN or passwords, which are easily identifiable by the others like your name, date of birth
and your car number etc

Basic cryptography for enabling E commerce

Introduction to Cryptography
The origin of the word cryptology lies in ancient Greek. The word cryptology is made up of two
components: “kryptos”, which means hidden and “logos” which means word. Cryptology is as old as
writing itself, and has been used for thousands of years to safeguard military and diplomatic
communications. For example, the famous Roman emperor Julius Caesar used a cipher to protect the
messages to his troops. Within the field of cryptology one can see two separate divisions: cryptography
and cryptanalysis. The cryptographer seeks methods to ensure the safety and security of conversations
while the cryptanalyst tries to undo the former’s work by breaking his systems.
User Authentication
If you log to a computer system there must (or at least should) be some way that you can convince it of
your identity. Once it knows your identity, it can verify whether you are entitled to enter the system.
The same principal applies when one person tries to communicate with another: as a first step you want
to verify that you are communicating with the right person. Therefore there must be some way in which
you can prove your identity. This process is called user authentication. There are several ways to obtain
user authentication
Data authentication
Data authentication consists of two components: the fact that data has not been modified (data
integrity) and the fact that you know who the sender is (data origin authentication).
Data integrity
A data integrity service guarantees that the content of the message, that was sent, has not been
tampered with. Data integrity by itself is not meaningful: it does not help you to know that the data you
have received has not been modified, unless you know it has been sent directly to you by the right
person. Therefore it should always be combined with data origin authentication.
Data origin authentication
Here one wants to make sure that the person who is claiming to be the sender of the message really is
the one from whom it originates. If A sends a message to B, but the enemy intercepts it and sends it to B,
claiming A has sent it, how can B be sure of the real origin of this data? A variation on this theme is: the
enemy could send a message to B claiming it A is the originator. Thanks to cryptography, there are
techniques to ensure against this type of fraud
Data confidentiality
This aspect of data security certainly is the oldest and best known. The example of Caesars cipher given
in the introduction clearly demonstrates this. The fact that confidentiality was considered to be much
more important than authentication of both sender and data, together with non-repudiation of origin
can be explained as follows: the latter services have been provided implicitly by the physical properties
of the channel: a letter was written in a recognizable handwriting, with a seal and a signature. With data
confidentiality we try to protect ourselves against unauthorized disclosure of the message.
If A sends a message to B, but the enemy intercepts it, one wants to make sure that this enemy never
understands his contents. Confidentiality protection is very important in the medical world and also in
the banking sector. World-wide there are several million transactions each day and all of these have to
be passed from one financial institution to another.
Encryption primitives
In cryptography one often makes use of encryption. With encryption we transform the clear-text (or
plaintext) into cipher-text. To get back to the original text, we apply the inverse transformation, called
decryption. These transformations themselves are public: this makes it possible to analyze these
algorithms and to develop efficient implementations. However they use a secret parameter: the keys
which are known only by the sender and/ or the receiver
We discuss two types of encryption primitives, symmetric or conventional ciphers and asymmetric or
public-key ciphers.
Symmetric ciphers
Basically there are two kinds of encryption-schemes. The oldest ones and most used until now are the
symmetric ciphers. In these schemes, the key used to decipher the cipher-text is equal to the one used to
encipher the plaintext.
Asymmetric ciphers
The asymmetric or public-key ciphers are the most recent cryptographic tools. In contrary to the
symmetric systems the key used to encipher and the one used to decipher are different. Each partner
thus has two keys. He keeps one key secret and makes the other one public. If A wants to send a message
to B, he just enciphers it with B’s public key. Since B is the only one who has access to the secret key, B is
the only one who can decipher the message and read the contents.
Managerial issue for epayment system
 Privacy in electronic payment system it may be necessary to protect the identity of buyers.other
privacy issues may involve tracking of internet
 Justifying e-commerce by conducting a cost benefit analysis
 Is very difficult.Many intangible benefits and lack of experience may produce grossly inaccurable
 estimates of costs and benefits

 Order fulfillment-taking order in EC may be easier than fulfilling them

 Managing the impacts the impacts of E-commerce on organizational structure people marketing
procedure and profitablilly may be dramatic .Therefore establishing a commiteev organizational
unit to develop strategy and to manage e-commerce nevessary

 Implementation plan because of the complexity and multifaceted nature of EC .it makes sense to
prepare an implementation plan.such a plan should include goals.budgets.timetable and
contingency plans
 Choosing the companys strategy toward e commerce-generally speaking there are three majo
options
1 lead conduct large-scale innovative e-commerce activities
2 watch and wait do nothing but carefully watch what is going on on the field in order to
determine when EC is mature enough to enter it.
3 Experiment start some e-commerce experimental projects
 Managing resistance to change EC can result in a fundamental change in how business is
done.Resistance to change from employement ,vendors and customers may develop education
training and publicity over an extended time period offer possible solution to the problem

n
 

Unit 4
E-Commerce - Payment Systems
E-commerce sites use electronic payment, where electronic payment refers to paperless monetary
transactions. Electronic payment has revolutionized the business processing by reducing the paperwork,
transaction costs, and labor cost. Being user friendly and less time-consuming than manual processing, it
helps business organization to expand its market reach/expansion. Listed below are some of the modes
of electronic payments −
Credit Card
Debit Card
Smart Card
E-Money
Electronic Fund Transfer (EFT)
Credit Card
Payment using credit card is one of most common mode of electronic payment. Credit card is small
plastic card with a unique number attached with an account. It has also a magnetic strip embedded in it
which is used to read credit card via card readers. 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. It is usually credit card monthly payment cycle. Following are
the actors in the credit card system.
The card holder − Customer
The merchant − seller of product who can accept credit card payments.
The card issuer bank − card holder's bank
The acquirer bank − the merchant's bank
The card brand − for example , visa or Mastercard.
Credit Card Payment Proces
 Step Description
 Step 1 Bank issues and activates a credit card to the customer on his/her request.
 Step 2 The customer presents the credit card information to the merchant site or to the merchant
from whom he/she wants to purchase a product/service.
 Step 3 Merchant validates the customer's identity by asking for approval from the card brand
company.
 Step 4 Card brand company authenticates the credit card and pays the transaction by credit.
Merchant keeps the sales slip.
 Step 5 Merchant submits the sales slip to acquirer banks and gets the service charges paid to
him/her.
  Step 6 Acquirer bank requests the card brand company to clear the credit amount and gets the
payment.
 Step 6 Now the card brand company asks to clear the amount from the issuer bank and the
amount gets transferred to the card brand company.
Debit Card
Debit card, like credit card, is a small plastic card with a unique number mapped with the bank account
number. It is required to have a bank account before getting a debit card from the bank. The major
difference between a debit card and a credit card is that in case of payment through debit card, the
amount gets deducted from the card's bank account immediately and there should be sufficient balance
in the bank account for the transaction to get completed; whereas in case of a credit card transaction,
there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants accept a debit card readily.
Having a restriction on the amount that can be withdrawn in a day using a debit card helps the customer
to keep a check on his/her spending.
Smart Card
Smart card is again similar to a credit card or a debit card in appearance, but it has a small
microprocessor chip embedded in it. It has the capacity to store a customer’s work-related and/or
personal information. Smart cards are also used to store money and the amount gets deducted after
every transaction.
Smart cards can only be accessed using a PIN that every customer is assigned with. Smart cards are
secure, as they store information in encrypted format and are less expensive/provides faster processing.
Mondex and Visa Cash cards are examples of smart cards.
E-Money
E-Money transactions refer to situation where payment is done over the network and the amount gets
transferred from one financial body to another financial body without any involvement of a middleman.
E-money transactions are faster, convenient, and saves a lot of time.

Secure Socket Layer (SSL)

It is the most commonly used protocol and is widely used across the industry. It meets following security
requirements –
For shoppers and even banking institutions to feel confident that their electronic transactions were safe
on the internet, there needed to be a universally accepted protocol used by all consumers and vendors.
These safety measures also had to work across different platforms and applications, such as HTTP, Telnet
and FTP for example.
So in 1994, Netscape rolled out SSL and within a year this became the most widely accepted way to
encrypt data, provide client and vendor authentications and secure the integrity of data transmitted over
insecure networks. In other words, SSL is a digital certificate that establishes trust between entities.
SSL tends to be used to secure data in emails, web browsers, internet faxing, instant messaging and VoIP.
Since SSL uses a mix of plain text and encrypted text, SSL had become vulnerable to attack and some
larger organizations, notably the US Government, have decided not to send sensitive data using SSL
protocols.
This problem came to a head in 2013 when Google realized there was a very serious problem with the
security of SSL 3.0, allowing hackers to access passwords and reveal users’ account information on
websites. So any website that uses SSL 3.0 is vulnerable to this type of attack,

 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.
This protocol using a combination of public - private key cryptography and digital certificate [13] so it
provides communications privacy over the Internet. SSL provides a private between the server and the
client. A handshake between the cardholder’s browser and the merchant server has a role in the
encryption process of the information transmitted by the cardholder [7] [8]. International Journal of
Computer Science & Information Technology (IJCSIT) Vol 9, No 2, April 2017 119 Figure 3 shows
transferring sensitive data over the internet via SSL connection in order to,only the server is
authenticated using a digital certificate. Figure 3. SSL Secured Connection Steps [25] 5.2.1 SSL Protocol
for Securing Data We need to force the web pages with sensitive data to be accessed through SSL as it’s
important to use it for securing the data that passes between the server and the client’s browser. In case
for example, if customer tried to access the next link http://localhost/mobileshop/credit-card-details/ ,
the customer should be redirected to https://localhost/mobileshop/credit-card-details/ At the same
time, enforcing SSL protocol will not needed in all places of the site, and because that makes web pages
invisible to search engines and reduces performance. We want to make sure that the, customer logout,
customer registration, and modification pages detail of customer are accessible only via SSL.
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration. Theoretically, it is the best
security protocol. It has the following components −
 Card Holder's Digital Wallet Software − Digital Wallet allows the card holder to make secure
purchases online via point and click interface.
 Merchant Software − This software helps merchants to communicate with potential customers
and financial institutions in a secure manner.
 Payment Gateway Server Software − Payment gateway provides automatic and standard
payment process. It supports the process for merchant's certificate request.
 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.
SSL is basically an encryption  SET is a very
mechanism for order taking, comprehensive protocol.It
queries and other applications provides Privacy, integrate
and available on customer’s and authenticity.It is not
browser. It does not protect used frequently due to its
against all security hazards and complexity and the need
is natural simple and widely for a special card reader by
used. the user. it may be
SSL is a protocol for general abandons if it is not
purpose secure message simplified.
exchange. SET is tailored to the credit
SSL protocol may use a card payment to the
certificate, but the payment merchant.
gateway is not available .so, the SET protocols hides the
merchant need to receive both customer’s credit card
the ordering information and information from merchant
credit card information because and also hides the order
the capturing process should be information to banks to
generated by merchant. protect privacy called dual
SSl protocol has been the signature.
industry standard for securing SET protocol is a complex
internet communication. and more secure protocol.
SSL protocol was developed by SET protocol was jointly
Netscape for securing online developed by MasterCard
 and visa with the goal of
securing web browsers for
transaction. bank card transaction.

Security schemes in E-payment system

yment System As electronic payment system increased the opportunity for the fraud on the web, security
is becoming an important component of electronic payment system.
Public Key Infrastructure (PKI): PKIs provide a systematic framework to generate, distribute, and
maintain the cryptographic key pairs78 required for achieving properties like authentication,
authorization, data confidentiality, data integrity, non-repudiation of communications over Internet,
Public Key cryptograph
A key advantage of PKC86 is that it permits individuals to use two different but related keys to
authenticate each other and maintain the confidentiality and integrity of their communications. It also
allows them to digitally sign87 a document or a transaction. One key, the private key is kept secret by the
owner, while the other, the public key, can be widely distributed. The two keys are mathematically
related, but an important feature is that it is computationally unfeasible to derive one key from the
knowledge of the other; PKC provides an easy mechanism for the data encryption and integrity (e.g., SSL).
The authentication of these parties,
Digital Signature: a digital signature in the electronic world (e.g., in an exchange of payment information)
provides same kind of characteristics90 that are expected from a handwritten signature in the paper-
based world. It is applicable to providing authentication of the signer, integrity of information being
signed and nonrepudiation of the transaction. Digital signatures are being used for the protection
electronic payment, exchange of information via web browser,
digital certificate

A digital certificate is an electronic identification card that establishes a user’s authenticity in the
electronic world. The digital certificate (conceptually similar to credit card) contains information, such as
name, e-mail address, a serial number, expiration dates, a copy of certificate holder’s public key and the
digital signature of the certificate- issuing authority so that a recipient can verify that the certificate is
real.
Firewalls: the most commonly accepted network protection is a barrier-a firewall "-between the
corporate network and the outside (untrusted) world (Kalakota and Whinston, 2004),0°. A firewall
protects networked computers from intentional hostile intrusion that could compromise confidentiality
or result in data corruption or denial
There are two access denial methodologies used by firewalls. A firewall may allow or deny all traffic
unless it meets certain criteria. The types of criteria used to determine whether traffic should be allowed
through varies from one type of firewall to another. Firewall may be concerned with the type of traffic, or
with source of destination addresses and ports.
Non-technoiogical Measures for Securing Electronic Payment
• Never send credit card details by e-mail. Pay attention to credit card billing J * ,1AO^ cycles, and follow
up the creditors if bill do not arrive on time (Sumanjeet) . This could be a sign that someone has changed
the address or other information from the consumer file to hide illegal changes from consumer.
• Make a print out of all the web pages or e-mail directly related to the purchase, so that the consumer
will have complete records on the event of any problem.
• When making payment online, check the lock or icons on the screen to make sure that the site is secure.
A broken icon indicates that the site is not secure.
Sign on the signature panel ofthe debit card immediately upon the receipt. And protect the magnetic strip
from the exposure to direct sunlight, magnets and scratches.
 • Never keep a copy of PIN (Personal Identification Number) in wallet and never write PIN number on
the card.
• Keep a photocopy offront and back of card.
• In case the card is stolen/misplaced110 call bank help line to inform about the same.
• Keep the charge slips safe, to tally them against the billing statement.
• Never have PIN or passwords, which are easily identifiable by the others like your name, date of birth
and your car number etc

Basic cryptography for enabling E commerce

Introduction to Cryptography
The origin of the word cryptology lies in ancient Greek. The word cryptology is made up of two
components: “kryptos”, which means hidden and “logos” which means word. Cryptology is as old as
writing itself, and has been used for thousands of years to safeguard military and diplomatic
communications. For example, the famous Roman emperor Julius Caesar used a cipher to protect the
messages to his troops. Within the field of cryptology one can see two separate divisions: cryptography
and cryptanalysis. The cryptographer seeks methods to ensure the safety and security of conversations
while the cryptanalyst tries to undo the former’s work by breaking his systems.
User Authentication
If you log to a computer system there must (or at least should) be some way that you can convince it of
your identity. Once it knows your identity, it can verify whether you are entitled to enter the system. The
same principal applies when one person tries to communicate with another: as a first step you want to
verify that you are communicating with the right person. Therefore there must be some way in which you
can prove your identity. This process is called user authentication. There are several ways to obtain user
authentication
Data authentication
Data authentication consists of two components: the fact that data has not been modified (data integrity)
and the fact that you know who the sender is (data origin authentication).
Data integrity
A data integrity service guarantees that the content of the message, that was sent, has not been tampered
with. Data integrity by itself is not meaningful: it does not help you to know that the data you have
received has not been modified, unless you know it has been sent directly to you by the right person.
Therefore it should always be combined with data origin authentication.
Data origin authentication
Here one wants to make sure that the person who is claiming to be the sender of the message really is the
one from whom it originates. If A sends a message to B, but the enemy intercepts it and sends it to B,
claiming A has sent it, how can B be sure of the real origin of this data? A variation on this theme is: the
enemy could send a message to B claiming it A is the originator. Thanks to cryptography, there are
techniques to ensure against this type of fraud
Data confidentiality
This aspect of data security certainly is the oldest and best known. The example of Caesars cipher given in
the introduction clearly demonstrates this. The fact that confidentiality was considered to be much more
important than authentication of both sender and data, together with non-repudiation of origin can be
explained as follows: the latter services have been provided implicitly by the physical properties of the
channel: a letter was written in a recognizable handwriting, with a seal and a signature. With data
confidentiality we try to protect ourselves against unauthorized disclosure of the message.
If A sends a message to B, but the enemy intercepts it, one wants to make sure that this enemy never
understands his contents. Confidentiality protection is very important in the medical world and also in
the banking sector. World-wide there are several million transactions each day and all of these have to be
passed from one financial institution to another.
Encryption primitives
 In cryptography one often makes use of encryption. With encryption we transform the clear-text (or
plaintext) into cipher-text. To get back to the original text, we apply the inverse transformation, called
decryption. These transformations themselves are public: this makes it possible to analyze these
algorithms and to develop efficient implementations. However they use a secret parameter: the keys
which are known only by the sender and/ or the receiver
We discuss two types of encryption primitives, symmetric or conventional ciphers and asymmetric or
public-key ciphers.
Symmetric ciphers
Basically there are two kinds of encryption-schemes. The oldest ones and most used until now are the
symmetric ciphers. In these schemes, the key used to decipher the cipher-text is equal to the one used to
encipher the plaintext.
Asymmetric ciphers
The asymmetric or public-key ciphers are the most recent cryptographic tools. In contrary to the
symmetric systems the key used to encipher and the one used to decipher are different. Each partner
thus has two keys. He keeps one key secret and makes the other one public. If A wants to send a message
to B, he just enciphers it with B’s public key. Since B is the only one who has access to the secret key, B is
the only one who can decipher the message and read the contents.
Managerial issue for epayment system
 Privacy in electronic payment system it may be necessary to protect the identity of buyers.other
privacy issues may involve tracking of internet
 Justifying e-commerce by conducting a cost benefit analysis
 Is very difficult.Many intangible benefits and lack of experience may produce grossly inaccurable
estimates of costs and benefits

 Order fulfillment-taking order in EC may be easier than fulfilling them

 Managing the impacts the impacts of E-commerce on organizational structure people marketing
procedure and profitablilly may be dramatic .Therefore establishing a commiteev organizational
unit to develop strategy and to manage e-commerce nevessary

 Implementation plan because of the complexity and multifaceted nature of EC .it makes sense to
prepare an implementation plan.such a plan should include goals.budgets.timetable and
contingency plans
 Choosing the companys strategy toward e commerce-generally speaking there are three majo
options
4 lead conduct large-scale innovative e-commerce activities
5 watch and wait do nothing but carefully watch what is going on on the field in order to
determine when EC is mature enough to enter it.
6 Experiment start some e-commerce experimental projects
 Managing resistance to change EC can result in a fundamental change in how business is
done.Resistance to change from employement ,vendors and customers may develop education
training and publicity over an extended time period offer possible solution to the problem

Unit 5

1. Language and Localization

 When operating in a single country, language issues are few and far between. Even if you’re not a native
speaker, the fact that you have a single language to master means your attention can be devoted to this
task

With international ecommerce, things get complicated as the need to provide consistent customer
experiences increases. When a prospect comes from China or Germany,

2. Content and Cultural Perceptions

Worse, different people groups have different cultural standards and customs. What can be considered
funny or casual in one culture may be nonsensical or downright offensive to those from different
backgrounds.

3. Technical Infrastructure and Speed

Infrastructure within most developed countries is more or less uniform, and — unless you opt for a cheap
solution — your visitors will enjoy solid uptimes and loading speeds

4. Customer Support and Service

Depending on your products, customer support can be a critical consideration. For example, if you sell
electronic equipment or anything with that requires assembly, you may need to provide both static
instructions and live support in native languages.

5. Currency and Payment Preferences

Converting prices into local currency is a fairly straightforward task that can be accomplished through
your store’s theme, customer-facing apps, or multiple storefronts.

Software Agents:

Although the theory of agents stated that agent is given a very famous with the growth of internet.
Software agents are a piece of software which works for the user. However software agent is not just a
program. An agent is a system situated within and a part of an environment that senses that environment
and acts on it. Over time in pursuit of its own agenda and so as to effect what it senses in the future [4]?
Important use of agent concept is, as the tool for analysis not as dosage. As the system changes on can
understand it.

Characteristics of Software agents: Software agents are like guards and locomotives of most E-Commerce.
The following are very few characteristics:  Software agents can do their task without any outsource
intervention. Social interaction with other software agents and human. Software agents are specific in
their goals.  Good software agent is the one which has the attitude to receive and adopt changes [9]. The
agent must be programmed in a powerful language so as to express the rules.  Safety of the information
must be promised by the agent. Effective usage of the existing resources. Agent must be a good sailor 
Agents must be very careful in handling unauthorized users. The same information must be accessed by
the user to which they have right.