BUSINESS

Economic system in which goods and services are exchanged for one another or
money, on the basis of their perceived worth. Every business requires some form of
investment and a sufficient number of customers to whom its output can be sold at profit
on a consistent basis.

SELLER
A person or entity who sells a thing or property in exchange for other property
often money).

OR
Party which acquires, or agrees to acquire, ownership (in case of goods), or benefit
or usage (in case of services), in exchange for money or other consideration under a
contract of sale. Also called purchaser.
OR

A buyer is any person who contracts to acquire an asset in return for some form of
consideration.

RETAILER

A merchant who sells goods at retail (Selling directly to consumers. In commerce,

a retailer buys goods or products in large quantities from manufacturers or importers,
either directly or through a wholesaler, and then sells smaller quantities to the end-user.

BRICKS AND MORTAR BUSINESS

A brick and mortar business is a company that has a physical location, that is, a
store you can walk into and purchase merchandise. Mostly merchants such as book store,
computer shops, and pizza delivery services are doing this type of business.

CLICK AND MORTAR BUSINESS

A click and mortar business is a company that has a brick and mortar location as
well as an online presence. Click and mortar businesses also are referred to as multi
channel marketers because they provide customers with more than one shopping channel

ELECTRONIC NEWSPAPER

An electronic newspaper is a self-contained, reusable, and refreshable version of a

traditional newspaper that acquires and holds information electronically. (The electronic
newspaper should not be confused with newspapers that offer an online version at a Web
site.)

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
INTER-ORGANIZATIONAL SYSTEMS (IOS)

With respect to Electronic Commerce, an IOS involves the flow of information

among two or more organizations. IOS support efficient transaction processing for
example transmitting orders, bills and payments using EDI or extranets. In IOS all
relationships are predetermined. There is no need of negotiation. Whereas in electronic
markets sellers and buyers negotiate, submit bids, agree on an order and finish the
transaction. IOS are used mainly for B2B applications. Whereas electronic markets exist
in both B2B and B2C cases.

E-COMMERCE

E-commerce refers to all forms of business activities conducted across the internet.
This can include E-tailing, B2B, intranets and extranets, online advertising (eg.
advertising banners), and simply online presences of any form that are used for some type
of communication (customer service for example).
OR
E-commerce sometimes called e-business is a financial business transaction that
occurs over an electronic network. Anyone with access to a computer, a network
connection such as internet, and a means to pay for purchased goods or services can
participate in e-commerce.
OR
Ecommerce (e-commerce) or electronic commerce, a subset of e-business, is the
purchasing, selling, and exchanging of goods and services over computer networks (such
as the Internet) through which transactions or terms of sale are performed electronically.
OR
Electronic commerce or ecommerce is a term for any type of business, or
commercial transaction that involves the transfer of information across the Internet. It
covers a range of different types of businesses, from consumer based retail sites, through
auction or music sites, to business exchanges trading goods and services between
corporations. It is currently one of the most important aspects of the Internet to emerge.

BUSINESS APPLICATIONS

Some common applications related to electronic commerce are the following:

E-mail and messaging

Content Management Systems

Documents, spreadsheets, database

Accounting and finance systems

Orders and shipment information

Enterprise and client information reporting

Domestic and international payment systems

Newsgroup

On-line Shopping

Messaging

Conferencing
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
There are a many reasons why you might would want to add e-commerce facilities to
your web site:

Purchases can be made 24 hours a day, 7 days a week.

Customers can compare prices easily.

Feedback can be immediate.

FAQ (Frequently asked questions) pages provide easy access to customer support.

Ability to gather customer information, analyze it and react.

Manufacturers can buy and sell directly, avoiding the cost of middleman.

Distribution cost for information is reduced or eliminated.

Options to create a paperless environment.

Ease of purchasing goods.

Your marketplace is larger.

Payment for your goods or services can be making immediately.

More convenient for customers.

Can increase your profit and turnover.

Transactions can be processed quicker.

You can quickly update prices.

More secure than a cheque.

Can increase your sales potential.

Can lead to increased profits.

Can lead to lower phone costs and cuts down on paperwork.

Leads to increased productivity.

E-COMMERCE ADVANTAGES

Some advantages that can be achieved from e-commerce include:

Being able to conduct business 24 x 7 x 365.

E-commerce systems can operate all day every day. Your physical storefront does
not need to be open in order for customers and suppliers to be doing business with you
electronically.
Access the global marketplace.
The Internet spans the world, and it is possible to do business with any business or
person who is connected to the Internet. Simple local businesses such as specialist record
stores are able to market and sell their offerings internationally using e-commerce.
Speed.
Electronic communications allow messages to traverse the world almost
instantaneously. There is no need to wait weeks for a catalogue to arrive by post: that
communications delay is not a part of the Internet / e-commerce world.
Marketspace.
The market in which web-based businesses operate is the global market. It may
not be evident to them, but many businesses are already facing international competition
from web-enabled businesses.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
Opportunity to reduce costs.
The Internet makes it very easy to 'shop around' for products and services that may
be cheaper or more effective than we might otherwise settle for. It is sometimes possible
to, through some online research, identify original manufacturers for some goods -
thereby bypassing wholesalers and achieving a cheaper price.
Computer platform-independent.
Many, if not most, computers have the ability to communicate via the Internet
independent of operating systems and hardware. Customers are not limited by existing
hardware systems.
Efficient applications development environment
In many respects, applications can be more efficiently developed and distributed
because the can be built without regard to the customer's or the business partner's
technology platform. Application updates do not have to be manually installed on
computers. Rather, Internet-related technologies provide this capability inherently
through automatic deployment of software updates.
Stepping beyond borders to a global view.
Using aspects of e-commerce technology can mean your business can source and
use products and services provided by other businesses in other countries.

E-COMMERCE DISADVANTAGES AND CONSTRAINTS

Some disadvantages and constraints of e-commerce include the following.

Time for delivery of physical products.
It is possible to visit a local music store and walk out with a compact disc or a
bookstore and leave with a book. E-commerce is often used to buy goods that are not
available locally from businesses all over the world, meaning that physical goods need to
be delivered, which takes time and costs money.

Physical product, supplier & delivery uncertainty.

When you walk out of a shop with an item, it's yours. You have it; you know what
it is, where it is and how it looks. In some respects e-commerce purchases are made on
trust. This is because, firstly, not having had physical access to the product, a purchase is
made on an expectation of what that product is and its condition. Secondly, because
supplying businesses can be conducted across the world, it can be uncertain whether or
not they are legitimate businesses and are not just going to take your money. It's pretty
hard to knock on their door to complain or seek legal recourse! Thirdly, even if the item
is sent, it is easy to start wondering whether or not it will ever arrive.

Limited and selected sensory information.

The Internet is an effective tool for visual and auditory information. However it
does not allow full scope for our senses: we can see pictures of the flowers, but not smell
their fragrance; we can see pictures of a hammer, but not feel its weight or balance. This
lack of sensory information means that people are often much more comfortable buying
via the Internet generic goods - things that they have seen or experienced before and
about which there is little ambiguity, rather than unique or complex things.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
Returning goods.
Returning goods online can be an area of difficulty. The uncertainties are involved
in this process. Will the goods get back to their source? Who pays for the return postage?
Will the refund be paid? Will I be left with nothing? How long will it take? Contrast this
with the offline experience of returning goods to a shop.

Privacy, security, payment, identity, contract.

Many issues arise - privacy of information, security of that information and
payment details, whether or not payment details (e.g credit card details) will be misused,
identity theft, contract, and, whether we have one or not, what laws and legal jurisdiction
apply.

Size and number of transactions.

E-commerce is most often conducted using credit card facilities for payments, and
as a result very small and very large transactions tend not to be conducted online.

TECHNICAL LIMITATIONS OF E-COMMERCE

costs of a technological solution

some protocols are not standardized around the world

reliability for certain processes

insufficient telecommunications bandwidth

Software tools are not fixed but constantly evolving (ie. Netscape 3,4,4.7,4.75 etc.)

access limitations of dial-up, cable, ISDN, wireless

some vendors require certain software to show features on their pages, which is
not common in the standard browser used by the majority

Difficulty in integrating e-Commerce infrastructure with current organizational IT
systems.
NON-TECHNICAL LIMITATIONS OF E-COMMERCE

customer fear of personal information being used wrongly

privacy issues

customer expectations unmet

rules and regulations

security and privacy

vulnerability to fraud and other crimes

lack of trust and user resistance

fear of payment information being insecure

legal issues outstanding such as jurisdiction

cultural obstacles

limitations of support services

financial cost

lack of critical mass in certain market areas for sellers and buyers

higher employee training required to be click and mortar

people's resistance to change

people not used to faceless / paperless / non-physical transactions
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
DISADVANTAGES OF TRADITION BUSINESS APPLICATIONS:

Catalog Inflexibility
The catalog needs to regenerate every time when there is some new information or
items to add in.
High Marketing / Advertising Expenses
Reduced marketing/advertising expenses compete on equal footing with much
bigger companies; easily compete on quality, price, and availability
Limited Market Place
Normally, customer will only locally and limited to certain area.
High Sale Cycle
Usually, a lot of phone calls and mailings are needed.
Higher Cost of Doing Business
Cost regarding inventory, employees, purchasing costs, and order-processing costs
associated with faxing, phone calls, and data entry, and even physical stores.
Subsequently, increase transaction costs.
May Require a Middlemen
Some sales or transaction may taking part indirectly or gone through third party to
your customers.
Inefficient Business Administration
Store inventory levels, shipping and receiving logs, and other business
administration tasks might need to be categorized and updated manually in and done only
when have time. This cause the information might not the latest or updated.
Need to employ number of staff
Need staff who give customer service and sales support

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
 ECOMMERCE CAN BE BROKEN INTO FIVE MAIN CATEGORIES:
B2B, B2C, C2B, C2CAND B2E.

1..B2B (BUSINESS-TO-BUSINESS)
B2B E-commerce consists of the sale and exchange of products and service
between businesses. In B2B, companies do business with each other such as
manufacturers selling to distributors and wholesalers selling to retailers. Pricing is based
on quantity of order and is often negotiable. For example, a company that manufactures
bicycles might use the internet to purchase tires from its suppliers.
The volume of B2B transaction is much higher than the volume of B2C
transaction. One reason for this is that businesses have adopted e-commerce in greater
number than consumers. i.e organizations such as “Intel” (chip maker) and “Cisco” have
been exploiting the benefits of B2B e-commerce for several years.
Four basic examples of B2B e-commerce sites are vendor, service, broker and
infomediary sites.
A vendor B2B site, also called an e-procurement site, is a product supplier that
allows purchasing agents to use a network to shop, submit request for quotes and
purchase items.
A service B2B site uses a network to provide one or more services to business
such as financing, warehousing or shopping.
A brokering B2B site acts as a middleman by negotiating the contract of a
purchase and a sale.
An infomediary short for information intermediary B2B site provides
specialized information about suppliers and other businesses.

2. B2C (BUSINESS-TO-CONSUMER)
B2C e-commerce consists of the sale of products or services from a business to a
general public or end user. Businesses selling to the general public typically through
catalogs utilizing shopping cart software. In this the seller is the business and buyer is the
consumer. For example amazon.com (world largest online book store).
Products for sale can be physical objects such as books, flowers, computers,
groceries, prescription drugs, music, movies and cars. They also can be intangible items.
For example, you can subscribe to an online magazine or download purchased software.
BENEFITS OF B2C E-COMMERCE

Sellers that use a B2C business model can maximize benefits by eliminating the
middleman. This enables some B2C companies to sell products at a lower cost and with
faster service than comparable brick and mortar businesses.

Consumers have access to a variety of products without the constraints of time or
distance.

Consumers easily can comparison shop to find the best buy.

Many B2C web sites provide consumer services such as access to product reviews,
chat rooms and other product related information. These services often attract and retain
customers.
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
3. C2B (CONSUMER-TO-BUSINESS)
The business in which Individuals sell products or services to organizations is
known as C2B transaction.
A consumer posts his project with a set budget online and within hours companies
review the consumer's requirements and bid on the project. The consumer reviews the
bids and selects the company that will complete the project. For example Elance
empowers consumers around the world by providing the meeting ground and platform for
such transactions

4. C2C (CONSUMER-TO-CONSUMER)

C2C e-commerce consists of individuals using the internet to sell products and
services directly to other individuals. The most popular vehicle for C2C e-commerce is
the online auction. An online auction is similar to negotiating, in which one consumer
auction goods to other consumers. If interested you bid on item. The highest bidder at the
end of the bidding period purchases the item.
An excellent example of C2C is found at “ebay.com” where consumers sell their
goods and services to other consumers. An eBay's auction service is a great example of
where person-to-person transactions take place everyday since 1995.

Other examples of Consumer-to-Consumer applications are service and

employment websites such as Monster.com, Seek.com.au and CareerOne.com.au. These
websites provide a valuable service to consumers looking for jobs. Employers can
advertise on these websites and potential employees can contact their organization for an
interview.

5. B2E (BUSINESS-TO - EMPLOYEE E-COMMERCE)

B2E e-commerce sometimes called intra-business e-commerce refers to the use of

intranet technology to handle activities that take place within a business. B2E e-
commerce does not generate revenue like previously discussed types, instead it increases
profits by reducing expenses within a company. For example using B2E e-commerce,
employees collaborate with each other, exchange data and information, and access in-
house databases, sales information, market news, and competitive analysis. By having
instantaneous access to this type of technology, employees do not send time manually
looking up information.

G2G (Government-to-Government), G2E (Government-to-Employee), G2B (Government-

to-Business), B2G (Business-to-Government), G2C (Government-to-Citizen), C2G
(Citizen-to-Government) are other forms of ecommerce that involve transactions with the
government--from procurement to filing taxes to business registrations to renewing
licenses.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
BUSINESS MODELS

A business model is the method of doing business by which a company can sustain
itself -- that is, generate revenue. The business model spells-out how a company makes
money by specifying where it is positioned in the value chain.
Some models are quite simple. For example a company produces a good or service
and sells it to customers. If all goes well, the revenues from sales exceed the cost of
operation and the company realizes a profit.
Other models can be more complex. Broadcasting is a good example. Radio and
later television programming has been broadcasted over the airwaves free to anyone with
a receiver. The broadcaster is part of a complex network of distributors, content creators,
advertisers (and their agencies), and listeners or viewers. Who makes money and how
much is not always clear at the outset. The bottom line depends on many competing
factors.
The basic categories of business models discussed in the table below include:
i. Auction
ii. Merchant
iii. Advertising
iv. Subscription
v. Information site
vi. Vanity sites
vii. Brokerage
viii. Manufacturer (Direct)
ix. Utility

1. AUCTION MODEL

In an auction the price of a product or services is made dependent on what

the buyers are willing to pay. There are number of models for performing auction.
OPEN AUCTION
In an open auction the participant rapidly place higher bids for a product.
The person who places the highest bid is awarded the product. i.e ebay.com
RESERVE AUCTION
It is also known as Dutch auction. In this auction the price is initially set at
a very high level and drop at regular interval.
2. MERCHANT MODEL OR STORE FRONT MODEL

A merchant is a retailer or whole seller of goods and services. Merchant

provide a web site with a product information and online ordering mechanism.
The user selects the product they want to buy and place an order. Normally the
price of the product is fixed. This business model is mainly suitable for physical
goods and services. Following are the main kinds of merchant model
VIRTUAL MODEL MERCHANT
They are also called e-tailors. Virtual merchants are the merchants that
operate completely over the web having no physical outlet of goods and services.
For example amazon.com.
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
 CLICK AND MORTAR MERCHANT.
A click and mortar merchant has a brick and mortar location as well as an
online presence. Click and mortar businesses also are referred to as multi channel
marketers because they provide customers with more than one shopping channel.
BIT VENDORS.
A merchant that deals only in digital products and services. For example
apple.com

3. ADVERTISING MODEL

The web advertising model is an extension of the traditional media

broadcast model. The broadcaster, in this case, a web site, provides content and
services mixed with advertising messages in the form of banner ads. The banner
ads may be the major or sole source of revenue for the broadcaster. The
advertising model works best when the volume of viewer traffic is large or highly
specialized.
Following are the some kinds of advertising model.
PORTAL
Portal is a place where variety of contents and services are available. It also
includes the facility of search engine. Yahoo is the web biggest and largest portal.
It contains anything you imagine. A high volume of user traffic on these portals,
make the advertising more profitable.
CLASSIFIED
Classified model list items for sale or wanted for purchase. Listing fees are
common, but there also may be a membership fee. (www.Monster.com,
www.rozee.com.pk)
USER REGISTRATION
These are content-based sites that are free to access but require users to
register and provide demographic data. (NYTimes)
QUERY BASED PAID PLACEMENT
In this model we sell sponsored link regarding to the particular search i.e
google.com.
INTROMERCIALS
They have animated full-screen ads placed at the entry of a site before a
user reaches the intended content. [CBS MarketWatch]

4. SUBSCRIPTION MODEL
Many service operators provide a subscription base access to their services.
Subscriptions can be paid on a weekly, monthly, or annual basis. Payment through
a credit card account is a common payment scheme for subscription sites because
of the ability to periodically process the purchase transaction electronically. For
example www.spider.com, www.ieee.org

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
5. INFORMATION SITES
Information sites (also called brochure or billboard sites) are designed to
derive economic benefit through indirect means from either referred sales, reduced
cost, or both. Revenue comes from creating awareness of its products or services
via the web.
These web sites are just like a billboard on a highway. Most corporate sites
today put up these electronic brochures to provide information about their
products, employment opportunities, investor relations, or customer service.

6. VANITY SITES
Many web sites started as vanity sites. These sites are often created by
individuals as an outlet of self expression, to share a hobby, promote a cause, or
find others with similar interests. These sites are created with no intension of
driving revenues. These are free sites. For example www.earthquake.com

7. BROKERAGE MODEL
Brokers are market-makers: they bring buyers and sellers together and
facilitate transactions. Brokers play a frequent role in business-to-business (B2B),
business-to-consumer (B2C), or consumer-to-consumer (C2C) markets. Usually a
broker charges a fee or commission for each transaction it enables. The formula
for fees can vary.

8. MANUFACTURER (DIRECT) MODEL

The manufacturer or "direct model", it is predicated on the power of the web to
allow a manufacturer (i.e., a company that creates a product or service) to reach
buyers directly and thereby compress the distribution channel. The manufacturer
model can be based on efficiency, improved customer service, and a better
understanding of customer preferences. [Dell Computer]
Purchase -- the sale of a product in which the right of ownership is transferred to
the buyer.
Lease -- in exchange for a rental fee, the buyer receives the right to use the
product under a “terms of use” agreement. The product is returned to the seller
upon expiration or default of the lease agreement.
License -- the sale of a product that involves only the transfer of usage rights to
the buyer, in accordance with a “terms of use” agreement. Ownership rights
remain with the manufacturer (e.g., with software licensing).
9. UTILITY MODEL
The utility or "on-demand" model is based on metering usage, or a "pay as
you go" approach. Unlike subscriber services, metered services are based on actual
usage rates. Traditionally, metering has been used for essential services (e.g.,
electricity water, long-distance telephone services). Internet service providers
(ISPs) in some parts of the world operate as utilities, charging customers for
connection minutes, as opposed to the subscriber model

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
E-BANKING

Electronic banking is the process by which a customer may perform banking

transactions electronically without visiting a brick-and-mortar institution. The following
terms all refer to one form or another of electronic banking: personal computer (PC)
banking, Internet banking, virtual banking, online banking, home banking, remote
electronic banking, and phone banking. PC banking and Internet or online banking are
the most frequently used designations. It should be noted, however, that the terms used to
describe the various types of electronic banking are often used interchangeably.

BENEFITS TO CONSUMERS:

General consumers have been significantly affected in a positive manner by E-

banking.

Customer’s account is extremely accesses able with an online account.

Customer can withdraw can at any time through ATMs that are now widely available
throughout the country.

Besides withdrawing cash customers can also have mini banks statements, balance
inquiry at these ATMs.

Through Internet Banking customer can operate his account while sitting in his office
or home. There is no need to go to the bank in person for such matter.

E banking has also greatly helped in payment of utility bill. Now there is no need to
stand in long queues outside banks for his purpose.

All services that are usually available from the local bank can be found on a single
website.

The Growth of credit card usage also owes greatly to E-banking. Now a customer can
shop world wide without any need of carrying paper money with him.

Banks are available 24 hours a day, seven days a week and they are only a mouse
click away.

Benefits to Banking Industry:

Banking industry has also received numerous benefits due to growth of E-Banking
infrastructure. There are highlighted below:

The growth of E-banking has greatly helped the banks in controlling their over heads
and operating cost.

Many repetitive and tedious tasks have now been fully automated resulting in greater
efficiency, better time usage and enhanced control.

The rise of E-banking has made banks more competitive. It has also led to expansion
of the banking industry, opening of new avenues for banking operations.

Electronic banking has greatly helped the banking industry to reduce paper work,
thus helping them to move the paper less environment.

Electronic banking has also helped bank in proper documentation of their records and
transactions.

The reach and delivery capabilities of computer networks, such as the Internet, are
far better than any branch network.
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
BENEFITS TO GENERAL ECONOMY:
Electronic Banking as already stated has greatly serviced both the general public
and the banking industry. This has resulted in creation of a better enabling environment
that supports growth, productivity and prosperity. Besides many tangible benefit in form
of reduction if cost, reduced delivery time, increased efficiency, reduced wastage, e-
banking electronically controlled and thoroughly monitored environment discourage
many illegal and illegitimate practices associated with banking industry like money
laundering, frauds and embezzlements. Further E-banking has helped banks in better
monitoring of their customer base. As e banking provide opportunity to banking sector to
enlarge their customer base, a consequence to increase the of volume of credit creation
which results in better economic condition, Besides all this E-banking has also helped in
documentation of the economic activity of the masses

VIRTUAL BANK

Virtual banks are banks without bricks; from the customer's perspective, they exist
entirely on the Internet, where they offer pretty much the same range of services and
adhere to the same federal regulations as your corner bank.

A virtual bank is a bank with a very small or nonexistent branch network. It offers its
financial services by:

Telephone banking

Online banking

Automated teller machines (often through interbank network alliances)

Mail banking

Mobile banking

TELEPHONE BANKING

Telephone banking is a service provided by a financial institution which allows its

customers to perform transactions over the telephone.

Most telephone banking use an automated phone answering system with phone
keypad response or voice recognition capability. To guarantee security, the customer
must first authenticate through a numeric or verbal password or through security
questions asked by a live representative .With the obvious exception of cash withdrawals
and deposits, it offers virtually all the features of an automated teller machine: account
balance information and list of latest transactions, electronic bill payments, funds
transfers between a customer's accounts, etc.

ONLINE BANKING
Online banking uses today's computer technology to give you the option of bypassing the
time-consuming, paper-based aspects of traditional banking in order to manage your
finances more quickly and efficiently.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
MAIL BANKING

Mail banking is a service provided by a financial institution which allows its

customers to deposit cheques into their account by mail. It is primarily used by virtual
banks and by customers who live too far from a branch. Typically, the institution that
advertises such a service will provide its own self-addressed stamped envelopes as a
courtesy.

AUTOMATED TELLER MACHINE

An automated teller machine (ATM) is a computerized telecommunications device
that provides the customers of a financial institution with access to financial transactions
in a public space without the need for a human clerk or bank teller. On most modern
ATMs, the customer is identified by inserting a plastic ATM card with a magnetic stripe
or a plastic smart card with a chip that contains a unique card number and some security
information.
Using an ATM, customers can access their bank accounts in order to make cash
withdrawals (or credit card cash advances) and check their account balances as well as
purchasing mobile cell phone prepaid credit.

MOBILE BANKING
Mobile banking (also known as M-Banking, mbanking, SMS Banking etc.) is a
term used for performing balance checks, account transactions, payments etc. via a
mobile device such as a mobile phone.

ADVANTAGES OF ONLINE BANKING

Convenience:
Unlike your corner bank, online banking sites never close; they're available 24
hours a day, seven days a week and they're only a mouse click away.
Ubiquity:
If you're out of state or even out of the country when a money problem arises, you
can log on instantly to your online bank and take care of business, 24/7.
Transaction speed:
Online bank sites generally execute and confirm transactions at or quicker than
ATM processing speeds.
Efficiency:
You can access and manage all of your bank accounts from one secure site.
Effectiveness:
Many online banking sites now offer sophisticated tools, including account
aggregation, stock quotes, rate alerts and portfolio managing programs to help you
manage all of your assets more effectively.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
DISADVANTAGES OF ONLINE BANKING

Start-up may take time:

In order to register for your bank's online program, you will probably have to
provide ID and sign a form at a bank branch.
Learning curve:
Banking sites can be difficult to navigate at first. Plan to invest some time and/or
read the tutorials in order to become comfortable in your virtual lobby.
Bank site changes:
Even the largest banks periodically upgrade their online programs, adding new
features in unfamiliar places. In some cases, you may have to re-enter account
information.
The trust thing:
For many people, the biggest hurdle to online banking is learning to trust it. Did
my transaction go through? Did I push the transfer button once or twice? Best bet: always
print the transaction receipt and keep it with your bank records until it shows up on your
personal site and/or your bank statement.

INTERNET BANKING

Internet banking is usually carried out through a computer that connects to a

banking website via the Internet. Internet banking also can be conducted via wireless
technology through Personal Digital Assistants (PDAs) or cellular phones.

Internet banks are also known as virtual, cyber, net, interactive, online, or web banks.

Internet banking, Internet banks, online banking, virtual banks, cyber banks are
some of the jargons being bandied about everywhere. But can all these terms be used
interchangeably? Yes and no. There is a subtle difference.

An Internet bank, is a virtual bank, or a cyber bank, one that does its business
entirely on the web. Meaning, it is a branchless bank. Internet banking and online
banking can of course be used interchangeably. The underlying principle here is the
same, that is, using the internet to perform banking transactions.

An important distinction between an Internet Bank and online banking is that you
don't need any special software to access the Internet banking services. You just need a
computer and an Internet connection. Whereas to access the services of a traditional bank
online, special software may be required (for some services, at least).

What attracts people to Internet-only banks? The primary reason is convenience, as in

free bill paying and the fact that there is no need to change banks if you relocate. Another
important is the free service they offer.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
E PAYMENT

E payment is a subset of an e-commerce transaction to include electronic payment

for buying and selling goods or services offered through the Internet. Generally we think
of electronic payments as referring to online transactions on the internet, there are
actually many forms of electronic payments.

COMPONENTS OF E-PAYMENT SYSTEM

• Money transfer applications,

• Network infrastructures
• Rules & procedures

MAJOR ACTORS OF E-PAYMENT

• Payer
• Payee
• Banks
• Trusted third Party

ADVANTAGES OF E-PAYMENT

• Increase payment efficiency

o Reduce transaction costs
o Enable trade in goods and services of very low value
• Increase convenience of making payments
o Payment can be made swiftly and remotely using various devices
• Can be used for
o e-commerce / e-Trade
o For other purposes like paying bills, taxes, etc

• Potential for great flexibility

DISADVANTAGES :

– Perfect copying of transactions is possible

– Vulnerability to world-wide attack
– Lack of anonymity, potential for privacy intrusion

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
REQUIREMENTS OF E-PAYMENT METHODS

 Enable an honest customer to convince a seller to accept payment

 Prevent a dishonest customer from making unauthorized or fraudulent payments
 Ensure the privacy of honest participants
 Scalable to very large numbers of customers

The following types of electronic payments are most common today. That said, it is
important to realize that new payment types are continual being discovered and there are
additional methods that exist or are being developed continuously.

CARDS
Credit cards, debit cards and prepaid cards currently represent the most common
form of electronic payments. The cardholder gives his or her card or card number to a
merchant who swipes the card through a terminal or enters the data to a PC. The terminal
transmits data to his or her bank, the acquirer. The acquirer transmits the data through a
card association to the card issuer who makes a decision on the transaction and relays it
back to the merchant, who gives goods or services to the cardholder. Funds flow later for
settlement with credit cards and are debited immediately for debit or pre-paid cards.

INTERNET

Online payments involve the customer transferring money or making a purchase

online via the internet. Consumers and businesses can transfer money to third parties
from the bank or other account, and they can also use credit, debit and prepaid cards to
make purchases online.

MOBILE PAYMENTS

Mobile phones are currently used for a limited number of electronic transactions.
However, the percentage seems likely to increase as mobile phone manufacturers enable
the chip and software in the phone for easier electronic commerce.

FINANCIAL SERVICE KIOSKS

Companies and service providers in several countries have set up kiosks to enable
financial and non-financial transactions. These kiosks are fixed stations with phone
connections where the customer usually uses a keyboard and television-like screen to
transaction or to access information.

Located at convenient public locations such as bus or subway stations,

convenience stores or shopping malls, these kiosks enable electronic payments by
individuals who may not have regular access to the internet or mobile phones.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
TELEVISION SET-TOP BOXES AND SATELLITE RECEIVER
Specialized boxes attached to a television can also be used for payments in some
locations. The set-top box attaches to the television and a keyboard or other device, and
customers can make purchases by viewing items on the television. Payment is made
electronically using a credit card or other account. While usage is presently low, it could
grow substantially in countries with a strong cable or satellite television network.

BIOMETRIC PAYMENTS
Electronic payments using biometrics are still largely in their infancy. Most
biometric payments involve using fingerprints as the identification and access tool,
though companies like Visa International are piloting voice recognition technology and
retina scans are also under consideration.

ELECTRONIC PAYMENTS NETWORKS

Various countries have electronic payments networks that consumer can use to
make payments electronically. ACH (Automated Clearing House) in the US, domestic
EFTPOS networks in Australia and Singapore, and other networks enable electronic
payments between businesses and between individuals.

PERSON-TO-PERSON (P2P) PAYMENTS

P2P payments enable one individual to pay another using an account, a prepaid
card or another mechanism that stores value. PayPal in the US is one of the most
frequently used P2P mechanisms. In the future other devices, such as mobile phones or
PDAs, could also be used to enable P2P electronic payments.

TYPES OF ELECTRONIC PAYMENT

An electronic payment is any kind of non-cash payment that doesn't involve a
paper check. Methods of electronic payments include credit cards, debit cards and the
ACH (Automated Clearing House) network.
For all these methods of electronic payment, there are three main types of transactions:

A one-time customer-to-vendor payment is commonly used when you shop online

at an e-commerce site, such as Amazon. You click on the shopping cart icon, type in your
credit card information and click on the checkout button. The site processes your credit
card information and sends you an e-mail notifying you that your payment was received.

You make a recurring customer-to-vendor payment when you pay a bill through
a regularly scheduled direct debit from your checking account or an automatic charge to
your credit card. This type of payment plan is commonly offered by car insurance
companies, phone companies and loan management companies.

To use automatic bank-to-vendor payment, your bank must offer a service called
online bill pay. You log on to your bank's Web site, enter the vendor's information and
authorize your bank to electronically transfer money from your account to pay your bill.
In most cases, you can choose whether to do this manually for each billing cycle or have
your bills automatically paid on the same day each month.
KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
 METHODS OF ELECTRONIC PAYMENT

DEBIT CARD
A debit card (also known as a bank card) is a plastic card which provides an
alternative payment method to cash when making purchases. Functionally, it can be
called an electronic cheque, as the funds are withdrawn directly from either the bank
account or from the remaining balance on the card. In some cases, the cards are designed
exclusively for use on the Internet, and so there is no physical card.

Debit card is also known as bank card or cheque card.

It is a card that authorizes EFT (Electronic Funds Transfer).

When you use the debit card, the amount is immediately deducted from your account.

ATM cards are actually debit cards.

They are accepted at many locations including grocery store, retail store, Gasoline
stations and restaurants.

It is an alternative to carrying a cash or cheque book.

You can use your card anywhere where merchant display the debit card brand or
logo.

Obtaining a debit card is much easier than obtaining credit card.

Merchants accept debit cards more easily than cheques.

When a customer uses a debit card, no fee is charged to the merchant so there is
strong incentive for merchant to offer discount to encourage payment by debit card
instead of credit card.
DEBIT CARDS AND THE ATM
For some people, the main reason to have a debit card is to use it at an ATM. For a
while, banks issued "ATM Cards" which were only useful if you were standing in front
of an ATM trying to take out cash. Eventually, banks started to add more features so that
a debit card can now be used at almost any location.

CREDIT CARDS
The way credit cards work is fairly straightforward: The credit card issuer gives
you a card. You use the card to pay for items and services up to a certain total amount --
your credit limit. The store merchant or service provider collects what you owe from the
card issuer, whom you repay.
A credit card is part of a system of payments named after the small plastic card
issued to users of the system. The issuer of the card grants a line of credit to the consumer
(or the user) from which the user can borrow money for payment to a merchant or as a
cash advance to the user. A credit card is different from a charge card, which requires the
balance to be paid in full each month. In contrast, credit cards allow the consumers to
'revolve' their balance, at the cost of having interest charged. Most credit cards are issued
by local banks or credit unions, and are the same shape and size, as specified by the ISO
7810 standard.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
E-BUSINESS

E-business (electronic business) is the conduct of business on the Internet, not

only buying and selling but also servicing customers and collaborating with business
partners.

Today, major corporations are rethinking their businesses in terms of the Internet
and its new culture and capabilities. Companies are using the Web to buy parts and
supplies from other companies, to collaborate on sales promotions, and to do joint
research.

ADVANTAGES OF E-BUSINESS

1. Develop a more cost-effective Communication and Marketing Strategy

The most obvious advantage of "upgrading" to eBusiness is that it gives you a

vital web presence. In an upgraded "eBusiness environment" your company web site
becomes the focal point of your communications and marketing strategy.

2. You can reach New Markets World Wide

The internet offers exciting ways of reaching new markets that could only be
dreamed of in the past. There are methods of promoting your products online that allow
you to precisely target the customers you are after whether they are in your town or on
the other side of the world.

3. Decrease Advertising and Marketing Costs

Online advertising is not only more efficient, but it is often less expensive than
traditional advertising. After sales training expenses can also be reduced by utilizing
online seminars, training videos and tutorials.

4. You can streamline the Ordering Process by taking orders online

Implementing an online ordering system allows you to eliminate manual paper

work or telephone order taking. It also offers the possibility of integrating your sales
order system with order fulfillment and delivery so customers can be up to speed on the
progress of their orders at all times.

5. Removes Location and Availability Restrictions

Users need not be in the same physical location as an e-business and the exchange
of information and transactions may take place at any given time, twenty-four hours a
day, seven days a week and from any location in the world with Internet access.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
6. Reduces Time and Money Spent

In e-business, there is often a reduction in costs required to complete traditional

business procedures. For example, compare the cost of sending out 100 direct mailings
(paper, postage, staff and all), to sending out a bulk e-mail. Also think about the cost of
paying rent at a physical location opposed to the cost of maintaining an online site.

7. Heightens Customer Service

With e-business customers receive highly customizable service, and

communication is often more effective. There is far more flexibility, availability and
faster response times with online support. The internet is a powerful channel for reaching
new markets and communicating information to customers and partners. Having a better
understanding of your customers will help to improve customer satisfaction.

8. Gives a Competitive Advantage

The internet opens up a brand new marketplace to businesses moving online. Easy
access to real time information is a primary benefit of the internet, enabling a company to
give more efficient and valid information and helping to gain the competitive advantage
over those that are not online.

9. Bulk Transactions

One can do bulk transactions during the visit to an e-shop, since there is no
limitation of collecting or carrying goods in contrast to shopping from a traditional
offline shop.

DISADVANTAGES OF E-BUSINESS
1. No physical proximity with item purchase
In certain cases the customer can not decide about buying a thing before physical
examine for it that is the customer would actually want to smell the perfume before
purchasing it.
Similarly a customer would ideally want to touch and feel the quality of the cloth before
buying.
2. Less security
The biggest obstacle I the growth of e-commerce is the issue of security. Internet
is not the secure medium of communication .There is tools available to hackers whereby
they can not only monitor but also control any communication over the internet. People
are not comfortable while providing their financial information due to fact that this
information can be hacked or misused.
3. Less Privacy

The nature of internet technology is such that the private information of online
customer can be easy made available to public. So there is less privacy in E-business as
compared to traditional business.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
ELECTRONIC DATA INTERCHANGE

Electronic Data Interchange (EDI) is the transfer of data between different

companies using networks, such as VANs or the Internet. Previously, fax machines or
traditional mail was used to exchange documents. Mailing and faxing are still used in
business, but EDI is a much quicker way to do the same thing.

WHAT ARE EDI BENEFITS?

Builds closer business partnerships

Reduces/eliminates manual handling of data, errors and rework

Transfers information faster and more accurately

Automates routine transactions

Improves productivity and business controls

Reduces costs

Shortens transaction processing cycles

Enhances data accuracy

Contributes to better in-stock positions

Provides Quick Response capability

Improves cash-flow management

Creates a competitive advantage

WHY MOVE TO EDI?

Allow machines to process business transactions while people develop and

enhance business relationships

Strengthen internal and external business relationships through "information
partnering"

Promote Electronic Commerce through EDI and other information solutions

Improve the supply chain by making accurate information available quickly and
inexpensively

Reduce operating costs by re-designing business processes and automating routine
tasks

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
IMPORTANCE OF EDI

EDI is used by a huge number of businesses. Over 100,000 businesses have

replaced the more traditional methods with EDI. This new system has a number of
benefits; cost is one of them. Computer to computer exchange is much less expensive
than traditional methods of document exchange.

As a computer processes the documents in EDI, there is also less chance of human
error. Speed is another benefit. A paper purchase order can take ten days to two weeks
from the time the buyer requests it to the time the shipper sends it off. Now, the same
order can be processed in less than a day.

These faster transaction times help maintain efficient inventory levels. They also
contribute to a better use of warehouse space, and less out-of-stock problems. This in turn
leads to a reduction in freight costs, as there should be no need for last minute urgent
delivery surcharges.

HERE ARE A FEW DRAWBACKS TO THE PROCESS.

EDI can only work if everyone the company has deals with is using the same
method. If the changeover has not been made within some businesses, other companies
dealing with them may have to use EDI as well as the more traditional methods. This can
be costly and time consuming. It may involve one member of staff maintaining the
mailing process while another worker sends documents electronically.
The process of using EDI for purchasing is very simple. Once a purchase order has
been written, the document is translated into a specific format and submitted to the
supplier via the Internet. It must be ensured that the document used by both parties is in
exactly the same format.
Security is an important issue for companies using EDI. Data security is controlled
throughout the process using passwords, encryption and user identification.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
FIVE KEY BENEFITS OF ELECTRONIC DATA INTERCHANGE (EDI)

BENEFIT ONE: REMOVE DOCUMENT RE-KEYING

By removing the manual keying of key business documents such as Orders, Invoices,
Acknowledgments and Dispatch Notes your company can benefit significantly by:
Reduced labour costs
Elimination of human keying errors
Faster document processing
Instant document retrieval
Remove reliance on the postal service
BENEFIT TWO: ELIMINATE PAPER

Paper-based trading relationships have some inherent disadvantages when compared with
their electronic trading equivalents:
Stationery and printer consumable costs
Document storage costs
Lost documents
Postage costs
BENEFIT THREE: REDUCE LEAD TIMES AND STOCKHOLDING

Electronic trading documents can be delivered far more quickly than their paper
counterparts, thus the turnaround time from order to delivery can be reduced.
By using EDI for forecasting and planning, companies are able to get forward warning of
likely orders and to plan their production and stock levels accordingly.
Companies receiving advanced shipping notes or acknowledgments know in advance
what is actually going to be delivered, and are made aware of shortages so alternate
supplies can be sourced.
BENEFIT FOUR: INCREASE QUALITY OF THE TRADING RELATIONSHIP

Electronic trading documents when printed are much easier to read than copies faxed or
generated on multi-part stationery by impact printers.
Accurate documents help ensure accurate supplies.
Batches of electronic documents are usually sequentially numbered, therefore missing
documents can easily be identified, not causing companies to wade through piles of
paper.

BENEFIT FIVE: COMPETITIVE EDGE

Because electronic data interchange (EDI) makes you attractive to deal with from your
customers' point of view, and you are in their eyes cheaper and more efficient to deal
with than a competitor trading on paper, your costs will be lower because you will require
less manpower to process orders, deliveries or payments.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
WHAT ARE THE BENEFITS OF EDI INTEGRATION?

Because EDI facilitates the digital exchange of business documents, most if not all
of the associated business processes (such as data entry and verification) can be
automated so that they occur with little or no manual intervention. As such, key benefits
of integration include the reduction or elimination of data entry errors and transaction
processing that is more expeditious and streamlined.

WHO CAN USE EDI?

Any company that buys or sells goods or services can use EDI. Commercial
translation software, such as TrueCommerce Integrator, is readily available to enable any
company to exchange business documents regardless of their business and accounting
systems.

WHAT ARE THE EDI STANDARDS?

The standards that exist for electronic documents define a wide variety of paper-
based communications. Standards, such as the American National Standards Institute
(ANSI) X12 and EDIFACT (Electronic Data Interchange for administration, commerce
and transport), are developed through a consensus process across a wide spectrum of
industries. ANSI X12 is primarily used in North America while EDIFACT is used in
Europe and Asia.

WHAT DO THE EDI STANDARDS DO?

The EDI standards are like a language, with rules and specific structures providing
formats to exchange data.

Here is an example of how the electronic data interchange process works. A

buyer prepares an order in his purchasing system and has it approved. Next, the EDI
order is translated into an EDI document format called an 850 purchase order.

The EDI 850 purchase order is then securely transmitted to the supplier either via
the internet or through a VAN (Value Added Network). The buyer’s VAN is a like an
electronic post office that interconnects with the supplier’s VAN. The VANs make sure
that EDI transactions are sent and received. The supplier’s VAN ensures that the supplier
receives the order. The supplier’s computer system then processes the order. In the case
of CovalentWorks’ clients, we provide VAN transportation and our servers provide all of
the software and hardware required to process EDI documents. Only internet access and
email are needed.

Data security and control are maintained through out the transmission process
using passwords, user identification and encryption. Both the buyer’s and the supplier’s
EDI applications edit and check the documents for accuracy.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
INTERNET MARKETING

Internet marketing, also referred to as web marketing, online marketing, or

eMarketing, is the marketing of products or services over the Internet.

The Internet has brought many unique benefits to marketing, one of which being
lower costs for the distribution of information and media to a global audience. The
interactive nature of Internet marketing is a unique quality of the medium. Internet
marketing is sometimes considered to have a broader scope because it refers to digital
media such as the Internet, e-mail, and wireless media; however, Internet marketing also
includes management of digital customer data and electronic customer relationship
management (ECRM) systems.

BENEFITS OF E-MARKETING OVER TRADITIONAL MARKETING

GLOBAL REACH

If you build a website you can reach anyone, anywhere in the world, provided they
have internet access. This allows you to tap new markets and compete globally with only
a small investment. This can be particularly useful for niche providers, companies whose
products can be posted easily, or businesses who are looking to expand geographically
but cannot afford to invest in new offices or businesses.

LOWER COST

A properly planned and effectively targeted e-marketing campaign can reach the
right customers at a much lower cost than traditional marketing methods. You can build a
website for as little as a few hundred pounds or send e-mail for a fraction of a penny.

TRACKABLE, MEASURABLE RESULTS

Marketing by e-mail or banner advertising makes it easier to establish how

effective your campaign has been. If someone clicks on a banner advert, or a link in an e-
mail or on a website, you can see how they arrived at your website. This detailed
information about customers' responses to your advertising allows you to assess the
effectiveness of different campaigns.

24-HOUR MARKETING

With a website your customers can find out about your products even if your
office is closed.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
SHORTER LEAD TIMES

If you have a website or an e-mail template, you can react to events much more
quickly. If one of your products is in the news or something important happens in your
industry, you can capitalize on it without having to print or post anything.

A LEVEL PLAYING FIELD

With a well-designed website, you can show yourself to be as professional and

credible as your larger competitors.

PERSONALISATION

If your customer database is linked to your website, then whenever someone visits
the site, you can greet them with targeted offers. The more they buy from you, the more
you can refine your customer profile and market effectively to them. A great example of
this is Amazon's website which suggests products based on your and other people's
previous purchases.

ONE-TO-ONE MARKETING

E-marketing lets you reach people who want to know about your products and
services instantly. People have a different, more personal relationship with most new
technologies. For example, many people take mobile phones and PDAs wherever they
go, and a surprising number feel lost without their e-mail. Combine this with the
personalized aspect of e-marketing, and you can create very powerful and targeted
campaigns.

MORE INTERESTING CAMPAIGNS

E-marketing lets you create interactive campaigns using music, graphics and
videos. You could send your customers a game or a quiz - whatever you think will
interest them. One of the great successes of e-marketing has been film companies letting
people download trailers for forthcoming movies.

BETTER CONVERSION RATE

If you have got a website, then your customers are only ever a few clicks away
from completing a purchase. Unlike other media which require people to get up and make
a phone call, post a letter or go to a shop, e-marketing is seamless. The change from
reading an e-mail to buying on a website is negligible - no special effort is required.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP
WHAT ARE THE LIMITATIONS OF MARKETING?

Internet marketing requires customers to use newer technologies rather than traditional
media. Low-speed Internet connections are another barrier: If companies build large or
overly-complicated websites, individuals connected to the Internet via dial-up
connections or mobile devices may experience significant delays in content delivery.

From the buyer's perspective, the inability of shoppers to touch, smell, taste or "try on"
tangible goods before making an online purchase can be limiting.

KASHIF HAMEED
INSTRUCTOR (IT)
COMMERCE COLLEGE BWP