E-COMMERCE [UNIT-1]

E-Commerce: Meaning, Nature and Concept

ELECTRONIC COMMERCE
E-commerce is a transaction of buying or selling online.
Electronic commerce draws on technologies such as mobile
commerce, electronic funds transfer, supply chain
management, Internet marketing, online transaction
processing, electronic data interchange (EDI), inventory
management systems, and automated data collection
systems.
Modern electronic commerce typically uses the World Wide
Web for at least one part of the transaction's life cycle
although it may also use other technologies such as e-mail.
Typical e-commerce transactions include the purchase of
online books (such as Amazon) and music purchases (music
download in the form of digital distribution such as iTunes
Store), and to a less extent, customized/personalized online
liquor store inventory services.

There are three areas of e-commerce:

(i) Online retailing,
(ii) Electric markets, and

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(iii) Online auctions. E-commerce is supported by electronic
business.

Nature of E-Commerce
It has also been described as a "fusion of telecommunications
and computing technology to conduct business. That is the
creation and management of relationships between buyers
and sellers, facilitated by an interactive and pervasive
electronic medium". Some of the main reasons for the
increase in electronic trading are:-

(1) The drive to reduce the costs;

(II) Easy accessibility to the Internet;
(III) The lack of regulation on the Internet;
(IV) Access to global markets for vendors;
(V) Greater choice and potentially lower prices for
purchasers;
(VI) Lower inventory costs for vendors;
(VII) The ability to enter new markets more easily.
Examples of E-Commerce

Ecommerce can take on a variety of forms involving different

transactional relationships between businesses and

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consumers, as well as different objects being exchanged as
part of these transactions.
1. Retail: The sale of a product by a business directly to a
customer without any intermediary.
2. Wholesale: The sale of products in bulk, often to a retailer
that then sells them directly to consumers.
3. Dropshipping: The sale of a product, which is
manufactured and shipped to the consumer by a third party.
4. Crowdfunding: The collection of money from consumers in
advance of a product being available in order to raise the
startup capital necessary to bring it to market.
5. Subscription: The automatic recurring purchase of a
product or service on a regular basis until the subscriber
chooses to cancel.
6. Physical products: Any tangible good that requires
inventory to be replenished and orders to be physically
shipped to customers as sales are made.
7. Digital products: Downloadable digital goods, templates,
and courses, or media that must be purchased for
consumption or licensed for use.
8. Services: A skill or set of skills provided in exchange for
compensation. The service provider's time can be purchased
for a fee.

ADVANTAGE AND DISADVANTAGE OF E-COMMERCE

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ADVANTAGE OF E- COMMERCE
Today, e-Commerce has revolutionized the way companies
are doing business. Now, consumers can purchase almost
anything online 24*7 a day and get an ultimate shopping
experience.
(i) Convenience & Easiness
For many people in the world, e-Commerce becomes one of
the preferred ways of shopping as they enjoy their online
because of its easiness and convenience. They are allowed to
buy products or services from their home at any time of day
or night.
The best thing about it is buying options that are quick,
convenient and user-friendly with the ability to transfer funds
online. Because of its convenience, consumers can save their
lots of time as well as money by searching their products
easily and making purchasing online.
(ii) Offer Product Datasheets
Consumers can also get description and details from an
online product catalog. For your customers, it is very much
important to get information about the product no matter
whether the time of day and day of the week. Through
information, your customers and prospects are making
decision to purchase your products or not.

(iii) Attract New Customers with Search Engine Visibility

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As we all know that physical retail is run by branding and
relationships. But, online retail is also driving by traffic that
comes from search engines. For customers, it is not very so
common to follow a link in the search engine results and land
up on an ecommerce website that they never heard of.
(iv) Comprise Warranty Information
No matter whether you are looking to choose including
warranty information with product descriptions and
datasheets or providing it from within an ecommerce
shopping cart, you need to make sure that customers must
be aware of important terms and conditions that are
associated with their purchase.

(v) Decreasing cost of inventory Management

With e-commerce business, the suppliers can decrease the
cost of managing their inventory of goods that they can
automate the inventory management using web- based
management system. Indirectly, they can save their
operational costs.
(vi) Keep Eye on Consumers' Buying Habit
The best thing is e-commerce retailers can easily keep a
constant eye on consumers' buying habits and interests to
tailors their offer suit to consumers' requirements. By
satisfying their needs constantly, you can improve your
ongoing relationship with them and build long-lasting
relationships.

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(vii) Competence
For effective business transactions, e- commerce is an
efficient and competence method. Setting-up cost is
extremely low as compare to expanding your business with
more brick and mortar locations. Very few licenses and
permits are required to start-up an online business than
physical store. You can save your lots of money by using
fewer employees to perform operations like billing
customers, managing inventory and more.

(viii) Allow Happy Customers to Sell Your Products

With lots of customers' reviews and product ratings, you can
easily increase your sells as new customers find that your
products are good and effective. Make sure that you mention
your clients' testimonials, reviews and product ratings as
such things can help your new customers to purchase your
products.
(ix) Selling Products across the World
If you are running a physical store, it will be limited by the
geographical area that you can service, but with an e-
Commerce website, you can sell your products and services
across the world. The entire world is your playground, where
you can sell your complete range of products without any
geographical limits. Moreover, the remaining limitation of
geography has dissolved by mcommerce that is also known
as mobile commerce.

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(x) Stay open 24*7/365
One of the most important benefits that ecommerce
merchants can enjoy is store timings are now 24/7/365 as
they can run e- commerce websites all the time. By this way,
they can increase their sales by boosting their number of
orders. However, it is also beneficial for customers as they
can purchase products whenever they want no matter
whether it is early morning or mid- night.
DISADVANTAGES OF E- COMMERCE

Running an E-Commerce business is not all rainbows and

unicorns. There are challenges unique to this business model
- knowing them will help you navigate the choppy waters and
avoid common pitfalls:

(i) Lack of Personal Touch

Some consumers value the personal touch they get from
visiting a physical store and interacting with sales associates.
Such personal touch is particularly important for businesses
selling high-end products as customers not only want to buy
the merchandise but also have a great experience during the
process.
(ii) Lack of Tactile Experience
No matter how well a video is made, consumers still can't
touch and feel a product. Not to mention, it's not an easy
feat to deliver a brand experience, which could often include

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the sense of touch, smell, taste, and sound, through the two-
dimensionality of a screen.

(iii) Price and Product Comparison

With online shopping, consumers can compare many
products and find the lowest price. This forces many
merchants to compete on price and reduce their profit
margin.
(iv) Need for Internet Access
This is pretty obvious, but don't forget that your customers
do need Internet access before they can purchase from you!
Since many eCommerce platforms have features and
functionalities that require high-speed Internet access for an
optimal customer experience, there's a chance you're
excluding visitors who have slow connections.

(v) Credit Card Fraud

Credit card fraud is a real and growing problem for online
businesses. It can lead to chargebacks that result in the loss
of revenue, penalties, and bad reputation.
(vi) IT Security Issues
More and more business and organizations have fallen prey
to malicious hackers who have stolen customer information
from their database. Not only could this have legal and
financial implications but also lessen the trust customers
have in the company.
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(vii) All the Eggs in One Basket
E-Commerce businesses rely heavily (or solely) on their
websites. Even just a few minutes of downtime or technology
hiccups can cause a substantial loss of revenue and customer
dissatisfaction.

(viii) Complexity in Taxation, Regulations, and Compliance

If an online business sells to customers in different
territories, they'll have to adhere to regulations not only in
their own states/countries but also in their customers' place
of residence. This could create a lot of complexities in
accounting, compliance, and taxation.

REASON FOR TRANSACTING ONLINE

Consumers are accustomed to being instantly connected to
information, to entertainment, to one another via text
message and social media, and to items they want to buy.
With this expectation that nearly every need can be
immediately solved with the help of technology, it's no
wonder that they've become so privy to online payments -
and the businesses that accept them.
Here's a look at the top reasons people prefer online
transaction;
1. THEY ELIMINATE GEOGRAPHICAL BOUNDARIES
When a person travels to a different country or continent,
they have to adapt what's in their wallet. This may include
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exchanging currency, and even using a different credit card
than they would typically use. Online payments eliminate the
obstacles to participating in a global marketplace.
Many payment processors equip businesses to accept a
range of different currencies, automatically calculate the
proper exchange rate based on the type of currency - and
even adapt the language and information prompted in
checkout forms to accommodate the different languages
buyers might speak, based on the currency used.
2. They have never been more convenient
Payment technology has evolved to the point that consumers
can complete an online payment even if they don't have a
card or physical wallet on hand. In addition to the increasing
popularity of mobile wallets, like Apple Pay, research by
Javelin Strategy indicates that simpler forms of alternative
funding (think PayPal or BillMeLater) remain well received by
online consumers. In fact, more than 80 percent of
respondents to Javelin's study said they'd used one of these
card-free payment tools in the last year to make an online
payment.
3. They give consumers more time
Online payments aren't just convenient in the sense of
transaction speed - they eliminate the need for consumers to
travel to a store, invest their time, and wait in line to pay.
Studies on the psychological impact of waiting in line reveal
just how precious time is to consumers: They tend to
overestimate how much waiting will deplete their time by

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nearly 40 percent. Whether the amount of time a customer
loses from waiting in line is real or imagined, perception is
reality: Online payments deliver a tangible benefit, simply by
offering the buyer a choice of how to spend their time.
4. They provide an additional layer of purchase protection
Buying from a small business, whether in person or online,
requires that customers establish some degree of trust with a
merchant with whom they may have no previous experience.
Regardless of how clearly a business communicates its
return, exchange, and customer satisfaction policies, there
may be a sense of hesitancy for consumers. Online payments
can overcome this obstacle. When online payments are made
using a credit card that guarantees the lowest price for a
stated number of days, extends manufacturer warranties,
and offers a cardholder the right to dispute a purchase, for
example, the customer has peace of mind that they will be
protected, regardless of the merchant's policy.
5. They replicate their existing financial habits
Online banking has become a tool that more than half of
Americans rely on to transfer funds, pay bills, and track their
budgets, according to Pew Research Center. Online payments
replicate the financial habits and behaviors that have become
the "new normal" for so many consumers.
6. They provide cost-free benefits
In addition to all of the benefits customers can gain from
online payments, they cost consumers nothing in return. In a
world where so few things are free, online payments offer

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consumers a value-added convenience, with no additional
investment required. Though businesses may incur a small
fee for accepting credit cards, the fact that consumers are
given the option to pay in the means they prefer will likely
negate the nominal fee that's involved in the transaction.
Online payments give consumers the hassle-free experience
they want at no cost -and plenty of timesaving benefits. In
tandem, they provide small businesses that accept them with
the operational efficiencies they need to meet (and hopefully
exceed) customer expectations.

Electronic Commerce, Types of E-Commerce

Electronic Commerce

Electronic commerce, or e-commerce, (also written as e-

Commerce) is a type of business model, or segment of a
larger business model, that enables a firm or individual to
conduct business over an electronic network, typically the
internet. Electronic commerce operates in all four of the
major market segments: business to business, business to
consumer, consumer to consumer, and consumer to
business. It can be thought of as a more advanced form of
mail-order purchasing through a catalog.
TYPES OF E-COMMERCE

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There are 6 basic types of e-commerce
1.Business-to-Business (B2B)
2.Business-to-Consumer (B2C)
3.Consumer-to-Consumer (C2C)
4.Consumer-to-Business (C2B)
5.Business-to-Administration (B2A)
6.Consumer-to-Administration (C2A)

1. Business-to-Business (B2B)
Business-to-Business (B2B) e-commerce encompasses all
electronic transactions of goods or services conducted
between companies. Producers and traditional commerce
wholesalers typically operate with this type of electronic
commerce.
2. Business-to-Consumer (B2C)
The Business-to-Consumer type of e- commerce is
distinguished by the establishment of electronic business
relationships between businesses and final consumers. It
corresponds to the retail section of e-commerce, where
traditional retail trade normally operates.
These types of relationships can be easier and more dynamic,
but also more sporadic or discontinued. This type of
commerce has developed greatly, due to the advent of the
web, and there are already many virtual stores and malls on
the Internet, which sell all kinds of consumer goods, such as
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computers, software, books, shoes, cars, food, financial
products, digital publications, etc.
3. Consumer-to-Consumer (C2C)
Consumer-to-Consumer (C2C) type e-commerce
encompasses all electronic transactions of goods or services
conducted between consumers. Generally, these
transactions are conducted through a third party, which
provides the online platform where the transactions are
actually carried out.
4. Consumer-to-Business (C2B)
In C2B there is a complete reversal of the traditional sense of
exchanging goods. This type of e-commerce is very common
in crowd sourcing based projects. A large number of
individuals make their services or products available for
purchase for companies seeking precisely these types of
services or products.
Examples of such practices are the sites where designers
present several proposals for a company logo and where only
one of them is selected and effectively purchased. Another
platform that is very common in this type of commerce are
the markets that sell royalty-free photographs, images,
media and design elements, such as iStockphoto.
5. Business-to-Administration (B2A)
This part of e-commerce encompasses all transactions
conducted online between companies and public
administration. This is an area that involves a large amount
and a variety of services, particularly in areas such as fiscal,
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social security, employment, legal documents and registers,
etc. These types of services have increased considerably in
recent years with investments made in e- government.
6. Consumer-to-Administration (C2A)
The Consumer-to-Administration model encompasses all
electronic transactions conducted between individuals and
public administration.
Examples of applications include:

Education – disseminating information, distance learning,

etc.
Social Security - through the distribution of information,
making payments, etc.
Taxes - filing tax returns, payments, etc.
Health - appointments, information about illnesses, payment
of health services, etc.
Both models involving Public Administration (B2A and C2A)
are strongly associated to the idea of efficiency and easy
usability of the services provided to citizens by the
government , with the support of information and
communication technologies.

ELECTRONIC COMMERCE MODEL, CHALLENGE AND

BARRIERS IN E-COMMERCE ENVIRONMENT

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Electronic commerce (e-commerce) model helps in the
marketing, buying and selling of merchandise or services over
the Internet. It encompasses the entire scope of online
product and service sales from start to finish. E-commerce
tools include computer platforms, applications, solutions,
servers and various software formats manufactured by e-
commerce service providers and purchased by merchants to
increase online sales.

E-commerce facilitates the growth of online business. It is

categorized as follows

 Online marketing
 Online advertising
• Online sales
• Product delivery
• Product service
• Online billing
• Online payments

The 10 Most Common Challenges Faced by E-Commerce

1. Finding the right products to sell
Shopping cart platforms like Shopify have eliminated many
barriers of entry. Anyone can launch an online store within
days and start selling all sorts of products.

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Amazon is taking over the e-commerce world with their
massive online product catalog. Their marketplace and
fulfillment services have enabled sellers from all over the
world to easily reach paying customers.
2. Attracting the perfect customer
Online shoppers don't shop the same way as they used to
back in the day. They use Amazon to search for products (not
just Google). They ask for recommendations on Social Media.
They use their smartphones to read product reviews while in-
store and pay for purchases using all sorts of payment
methods. Lots have changed including the way they consume
content and communicate online. They get easily distracted
with technology and social media.

3. Generating targeted traffic

Digital marketing channels are evolving. Retailers can no
longer rely one type of channel to drive traffic to their online
store.
They must effectively leverage SEO, PPC, email, social, display
ads, retargeting, mobile, shopping engines and affiliates to
help drive qualified traffic to their online store. They must be
visible where their audience is paying attention.
4. Capturing quality leads

Online retailers are spending a significant amount of money

driving traffic to their online store. With conversion rates

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ranging between 1% to 3%, they must put a lot of effort in
generating leads in order to get the most out of their
marketing efforts.
The money is in the list. Building an email subscribers list is
key for long term success. Not only will help you
communicate your message, but it will also allow you to
prospect better using tools such as Facebook Custom
Audiences.
5. Nurturing the ideal prospects
Having a large email list is worthless if you're not actively
engaging with subscribers.
A small percentage of your email list will actually convert into
paying customers. Nonetheless, retailers must always deliver
value with their email marketing efforts.
Online retailers put a lot of focus on communicating product
offering as well as promotions, but prospects need more
than that. Value and entertainment goes a long way but that
requires more work.
6. Converting shoppers into paying customers
Driving quality traffic and nurturing leads is key if you want to
close the sale. At a certain point, you need to convert those
leads in order to pay for your marketing campaigns. Retailers
must constantly optimize their efforts in converting both
email leads as well as website visitors into customers.
Conversion optimization is a continuous process.

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7. Retaining customers
Attracting new customers is more expensive than retaining
the current ones you already have.
Retailers must implement tactics to help them get the most
out of their customer base in increase customer lifetime
value.

8. Achieving profitable long-term growth

Increasing sales is one way to grow the business but in the
end, what matters most is profitability. Online retailers must
always find ways to cut inventory costs, improve marketing
efficiency, reduce overhead, reduce shipping costs and
control order returns.

9. Choosing the right technology & partners

Some online retailers may face growth challenges because
their technology is limiting them or they've hired the wrong
partners/agencies to help them manage their projects.
Retailers wanting to achieve growth must be built on a good
technology foundation. They must choose the right shopping
cart solution, inventory management software, email
software, CRM systems, analytics and so much more.

In addition, hiring the wrong partners or agencies to help you

implement projects or oversee marketing campaigns may

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also limit your growth. Online retailers must choose carefully
who to work with.
10. Attracting and hiring the right people to make it all
happen
Let's face it, online retailers may have visions and aspirations
but one true fact remains, they need the right people to help
them carry out their desires.
Attracting the right talent is key in order to achieve desirable
online growth. Also, having the right leader plays an even
bigger role.

BARRIERS TO E-COMMERCE
5 BIGGEST BARRIERS TO E COMMERCE ARE ;

Search Engine Rankings;

• The difficulty to rank high in search engines is the
leading barrier facing the majority of e- commerce
websites, especially newer ones.

• Using descriptive and relevant page titles,

descriptions and URLs are some of the easiest
things you can do to influence your rankings,
according to Google.

Web Design
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 • In an e-commerce study conducted by Peer 1, more
than three-fourths said that website design impacts
customer's brand perception leading to higher
conversion rates.

• High performing e- commerce websites have a

clean and uncluttered appearance, are fast, provide
great content and make it easy for visitors to shop.

Mobile browser compatibility

• Whilst sales of desktop PCs are dropping, those of
smart phones and tablets are increasing.

• More consumers are using mobile devices as their

preferred web browser.
• Since more visitors will be shopping online from mobile
devices, e-commerce websites need to ensure cross-platform
compatibility across all web browsers.

Slow website performance

• A website that takes a long time to load its pages
can lead to a high bounce rate and lead to lower
search engine rankings.

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 • There are a variety of factors that can impede
website performance including hosting service,
database response, coding, images and video, to
name a few.

Shopping cart/ purchasing

• How easy or difficult it is for someone to make a purchase
and checkout online can affect conversion and shopping cart
abandonment rates.

⚫ E-commerce websites that do well recommend related

products, display user ratings and enable shoppers to
purchase nd checkout with the least amount of ----

E-Commerce in India, Transaction to E- Commerce in India

India has an internet users base of about 450 million as of

July 2017, 40% of the population. Despite being the second-
largest user base in world, only behind China (650 million,
48% of population), the penetration of e-commerce is low
compared to markets like the United States (266 million,
84%), or France (54 M, 81%), but is growing at an
unprecedented rate, adding around 6 million new entrants
every month. The industry consensus is that growth is at an
inflection point.

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In India, cash on delivery is the most preferred payment
method, accumulating 75% of the e-retail activities. Demand
for international consumer products (including long-tail
items) is growing much faster than distributors and e-
commerce offerings.
In 2015, the largest e-commerce companies in India were
Flipkart, Snapdeal, Amazon India, and Paytm.

Government initiative
Since 2014, the Government of India has announced various
initiatives namely, Digital India, Make in India, Start-up India,
Skill India and Innovation Fund. The timely and effective
implementation of such programs will likely support the e-
commerce growth in the country. Some of the major
initiatives taken by the government to promote the e-
commerce sector in India are as follows:
Reserve Bank of India (RBI) has decided to allow "inter-
operability" among Prepaid Payment Instruments (PPIs) such
as digital wallets, prepaid cash coupons and prepaid
telephone top-up cards.

Finance Minister Mr Arun Jaitley has proposed various

measures to quicken India's transition to a cashless economy,
including a ban on cash transactions over Rs 300,000 (US$
4,655.1), tax incentives for creation of a cashless cashless
infrastructure, promoting greater usage of non-cash modes

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of payments, and making Aadhaar-based payments more
widespread.
The e-commerce industry been directly impacting the micro,
small & medium enterprises (MSME) in India by providing
means of financing, technology and training and has a
favourable cascading effect on other industries as well. The
total size of e- Commerce industry (only B2C e-tail) in India is
expected to reach US$ 101.9 billion by 2020.

TRANSACTION TO E-COMMERCE IN INDIA

Much has been said about India's accelerated digital

transformation. Like the fact that we are the world's fastest-
growing internet market, adding 40 million users per year on
average. In fact, despite the digital divide, India boasts the
second highest active internet user base with 1 out of 3
people online.

The corollary to this story is the country's red-hot

ecommerce pie, which according to a new study has the
potential to become far bigger, driven by more than 500
million Indians who will constitute the next wave of online
consumers. The size of the opportunity up for grabs is a
whopping Rs 3.44 lakh crore.
The report, titled 'Unlocking Digital for Bharat: $50 Billion
Opportunity', released by Bain & Company, Google and

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Omidyar Network, claims that India has the potential to
unlock over $50 billion in online commerce in India by driving
awareness, usage and transactions among the current and
next set of internet users and shoppers.
But the road to get there is far from smooth. Based on a
survey of 3,400 customers, the study puts the spotlight on
some major barriers holding India back, beginning with
India's small transacting user base. Only 40 per cent of India's
390 million internet users transact online. The remaining 60
per cent do their research online but complete the
transaction offline.
In addition, there is the worrying number of dropouts.
According to the report, 54 million users across the affluent
socioeconomic segments that comprise 80% of the user base
alone - stop after the first online purchase due to issues with
user experience.
Significantly, it takes three to four months for a typical Indian
internet user to make the first online transaction and among
users who have been on the internet for two or more years,
61 percent transact online. The number of "transactors"
drops to 27% among new users, who have been online for
just 4-6 months. This underscores the need for ecommerce
players to retain customers through content, experience and
fostering trust.
The study points out that India can "double the current
product transactor base" by retaining the number of people
who give up after a trial purchase and by beefing up its
current numbers. For the latter, one can start by focussing on
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the 160M content consumers who draw the line at online
transactions, which has the potential to boost ecommerce by
$14-18 billion.
"Digital India is at a very interesting point - a large internet
user base with significant variations across demographics,
and only a small portion actually transacting online. While
online spends are still low given lower per capita incomes,
there is huge potential to unlock value by addressing user
concerns at various stages of the digital curve," said Arpan
Sheth, partner, Bain & Company, and one of the authors of
the report. "However, the path won't be easy for businesses
and they will have to innovate and be patient to monetize
this user base and generate value."

India Readiness for E-Commerce

After demonetization in India, there is a rapid growth in use

us of e-commerce. This sector was present in India from two
decades ago but the boot comes after demonetization. No
doubt it is a growing sector but there is some question still
rising i.e. is India is ready for E-commerce? Govt. of India
planning to restrict cash transaction in limited amount but is
everyone is ready for that or we need to think for this again.
India is not ready for E-commerce
• The backbone of Indian economy has come from village
areas and these areas are not aware of e- commerce and
online transaction.
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• Some areas of India is not connected to the internet and
most of the area is suffering from slow internet speed in this
situation the only e-commerce will be a problem.

⚫ E-commerce sector is not very reliable we cannot trust

online shopping store completely, some of them are reliable
but there are many cases where peoples are cheated online.

• Cyber security of India is not advance there a chance that

with an increase of E-transaction, cyber- attack will be
increased.
• Cyber security of India is not advance there a
chance that with an increase of E-transaction,
cyber- attack will be increased.

• There are a number of people who are not well in using

digital apps and computers first we have to start the
campaign to improve people's understanding of computers.
India is ready for E-commerce

• There is a rapid increase in online transaction and

E-commerce which indicates the awareness among
peoples this is the time to push peoples towards e-
commerce.

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 • Online transaction is traceable govt. can identify
and can keep a record of the transaction which will
reduce corruption in India.
• E-commerce is safe and protected there are various
protection and firewalls present in each layer and
due to its traceability refund is possible.
• The world is moving toward the e- commerce and
India have to take some step to push peoples
toward e-commerce.

Conclusion

There are some issue and lack of knowledge in peoples but

the increasing use of E- commerce show that peoples are
learning e- commerce. There are various benefits of e-
commerce which can help to develop our national economy.
Accepting new thing may be hard initially but it has long-term
benefits.

E-Transition Challenges for Indian Corporate

The e-commerce industry in India is growing at a remarkable

pace due to high penetration of internet and sophisticated
electronic devices. However, the recent growth rate of e-
commerce in India is far lagging behind than other developed

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countries. There are many big problems and challenged on
the way of an online merchant. Factors like safety and
security of online money transaction being the biggest
problem along with others, have curb the smooth expansion
of the online industry in the country.
Although, major portion of e-business sectors have affected
by the below mentioned challenges but still there are few
online giants like Makemytrip.com, flipkart.com,
Snapdeal.com who have overcome the challenges and
represents the perfect growth trends of e-commerce in India.

Major E-Transition Challenges for Indian Corporate:

• POOR KNOWLEDGE AND AWARENESS: When it
comes to ratio of internet consumers, scenario is
not so admirable one. Majority of Indian rural
population are unaware of internet and it uses.
Surprisingly, most of internet savvies or urban
population are also suffering from poor knowledge
on online business and its functionalities. Very few
are aware of the online corruption and fraud and
thus darkness still exists. A reliable survey reveals
that 50% of Indian online users are unaware of the
solution of online security.
• Online Transaction: Most of Indian customers do
not possess plastic money, credit card, debit card
and net banking system, which is one of the prime
reasons to curtail the growth of ecommerce.
Nevertheless, in recent years, some of the
29
 nationalized banks have started to issue debit cards
to all its Account holder. This is undoubtedly a
positive sign for Indian online entrepreneurs.
• Cash On Delivery: Cash on Delivery (COD) has
evolved out of less penetration of credit card in
India. Most of Indian E-commerce companies are
offering COD as one of mode of payment for the
buyers. 30%-50% of buyers are also taking
advantage of this mode of payment while making
purchase of any product and service over internet.
COD has been introduced to counter the payment
security issues of online transaction, but this mode
has been proving to be loss and expensive to the
companies.
• Online Security: In case of start up and small
business, Business owners are ignoring the
importance of authentic software due to budget
constraints. They are even failing to take the initial
steps to secure and protect their their online
business through installation of authentic
protection services like antivirus and firewall
protection, which indeed a crucial step for
successful online business players. In India,
maximum number of business entrepreneurs used
unauthorized software in their server, which
usually does not come with upgraded online
security.
• Logistics and Shipment Services: In India, logistics
and courier services required lots of improvement.

30
 While, perfect and strong logistics service is one of
the key reasons behind the success of any online
company, India is lagging far behind in this sector
as most of the town and small villages are still not
covered under serviceable area of many of the
courier and logistic companies. Ecommerce is
hampered in a big way owing to the limited
services offered by the courier service companies.
• Tax Structure: Tax rate system of Indian market is
another factor for lesser growth rate of
eCommerce in India in comparison to other
developed countries like USA and UK. In those
countries, tax rate is uniform for all sectors
whereas tax structure of India varies from sector to
sector. This factor creates accounting problems for
the Indian online business companies.
• Fear factor: Fear of making online payment is a
universal psychological factor of Indian customers.
With the spread of knowledge on online
transactions and its reliability, some percentages of
customers have overlooked this fear and they are
fearlessly engaging themselves in online shopping.
But still, majority of customers are not aware of
online transactions and its security. They often
reluctant to disclose their credit card and bank
details and preferred to stay away from online
world of shopping.
• 'Touch and Feel' factors: Indian customers are
more comfortable in buying products physically.

31
 They tend to choose the product by touching the
product directly. Thereby, Indian buyers are more
inclined to do ticketing and booking online in Travel
sectors, books and electronics. Companies dealing
with products like apparel, handicrafts, jewelry
have to face challenges to sell their products as the
buyers want to see and touch before they buy
these stuffs.

-----------------------------------------unit-1--------------------------------

32
 UNIT-2

HTML: Elements, Tags and Basic Structure

HTML stands for Hypertext Markup Language and is the basic
structural element that is used to create WebPages. HTML is
a markup language, which means that it is used to "mark up"
the content within a document, in this case a webpage, with
structural and semantic information that tells a browser how
to display a page. When an HTML document is loaded by a
web browser, the browser uses the HTML tags that have
marked up the document to render the page's content.
There are three types of code that make up a basic website
page. HTML governs the structural elements, CSS styles those
elements, and JavaScript enables dynamic interaction
between those elements.
HTML structure + CSS style + JS interaction = web page

Elements and Tags

HTML elements and tags work together to mark up content.
HTML elements indicate the purpose of a tag and tags
indicate the beginning and the end of an element.
For example, here is a simple paragraph in HTML:
<p>This is a paragraph.</p>
The letter "p" represents the paragraph element. In this
example, <p> is an opening tag that tells the browser that the

33
content that follows it is a paragraph. The slash in the second
tag, </p>, indicates that it is a closing tag that tells the
browser that the paragraph element is ending and that any
content that appears after it is not part of the paragraph. You
may encounter serious display issues if you don't remember
to "close" each tag because the browser will interpret this
pattern as meaning that the element identified by the
opening tag should continue for the rest of the page.

Basic HTML Page Structure

A basic HTML page is a document that typically has the file
extension .html, though HTML frequently appears in the
content of other file types as well. All HTML documents
follow the same basic structure so that the browser that
renders the file knows what to do. The basic structure on
which all webpages are built looks like this:

<!DOCTYPE html>
<html>
<head>
<title>Page Title</title>
</head>
<body>
<h1>Homepage
Headline</h1><p>This is a paragraph.</p>
34
</body>
</html>
When this code is rendered by a browser, it will look like this:
[THIS IS HEADLINE]

Doctype
The first line of code, <!DOCTYPE html>, is called a doctype
declaration and tells the browser which version of HTML the
page is written in. In this case, we're using the doctype that
corresponds to HTML5, the most up-to-date version of the
HTML language. There are a number of different doctype
declarations that correspond to various versions of HTML.

HTML Root Element

Next, the <html> element wraps around all of the other code
and content in our document. This element, known as the
HTML root element, always contains one <head> element
and one <body>element.

Head Element
The HTML head element is a container that can include a
number of HTML elements that are not visible parts of the
page rendered by the browser. These elements are either
metadata that describe information about the page or are
35
helping pull in external resources like CSS stylesheets or
JavaScript files.
The <title> element is the only element that is required to be
contained within the <head> tags. The content within this
element is displayed as the page title in the tab of the
browser and is also what search engines use to identify the
title of a page.

All of the HTML elements that can be used inside the <head>
element are:

• <base>
• <link>
 <meta>
 <noscript>
 <script>
 <style>
• <title>(required)

Body Element
There can only be one <body> element in an HTML document
because this element is the container that holds the content
of the document. All of the content that you see rendered in
the browser is contained within this element. In the example

36
above, the content of the page is a headline and simple
paragraph.

Nesting

You might have noticed that I keep referring to HTML

elements as "containers." This is because proper "nesting" is
a key part of writing HTML that will work across all browsers,
will render all content, will be readable by screen readers,
and will be able to be targeted by CSS and JavaScript. In
terms of HTML, nesting means exactly what you'd think it
might mean: each element goes inside another element, just
like nesting dolls are physically "nested" within each other.
For example, the basic page structure we outlined above is
valid HTML because each element's opening tag has a closing
tag and fully contain any other elements within it.

I've used HTML comments to label the example we've been

using to show which tags are opening tags and which tags are
closing tags, so you can see how each element is nested. In
HTML, any content that is in between <!- and -> is a
comment that will not be rendered by the browser.

<!DOCTYPE html> <!- doctype declaration ->

37
<html> <!- opening HTML tag-
<head> <!-opening head tag-
<title>Page Title</title> <!- </head> <!-closing head tag-
title tag ->
<body> <!- opening body tag
<h1>Homepage Headline</h1> <!-h1 headline-
<p>This is a paragraph.</p>
<!- paragraph ->
</body> <!-closing body tag -
</html> <!- closing HTML tag -

Keep in mind that indentation is used by developers to help

make sure that their HTML is nested properly and to ensure
that all opening tags have a corresponding closing tag. Just
like HTML comments, the browser will not display
indentations in the code, these formatting patterns are there
solely to help improve the readability of code.

The following version of the sample code is not nested

correctly. Take a moment to look and find the nesting errors
here.
<!DOCTYPE html> <html>
<head>
<title>Page Title</title>
38
<body>
</head>
<h1><p>Homepage
Headline</h1>
This is a paragraph.</p>
</body> </html>
There are two nesting errors in the previous example:
1. The opening <body> tag is contained within the opening
and closing <head> tags.
2. The opening <p> tag in the <body> content is contained
within the opening and closing <h1> tags.
This code actually will render in some browsers, but just
because something renders doesn't mean that the code is
syntactically correct.

Multimedia Components in HTML Documents

HTML has introduced two new multimedia tags, AUDIO and

VIDEO, for displaying the audio and video streams on a Web
page.
You can play the multimedia files, which are stored in your
local computer, on the Web page by specifying their location.
The src attribute is used to specify the multimedia file to play
it on the Web page.

39
If the Web browser does not support AUDIO and VIDEO tags,
then the text defined between the starting and the closing
tags of these tags are displayed on the Web page.

Modern Media on the Web: HTML5 <audio> & <video>

With the release of HTML5, the need for browser plugins for
audio and video content began to go away. HTML5
introduced two new elements that include playback
functionality for supported media formats. These two new
elements are audio and video. In this tutorial we'll cover how
to use the new tags, the media formats supported by these
tags, and how to use the iframe element to embed media
files hosted on an external website.

HTML5 <audio>
The audio element can be used to add audio content to a
web page. Files embedded in this way are played by the
audio playback engine built into all HTML5 compliant
browsers. The syntax can be very simple, or it can be made
more complex by adding in multiple file formats as well as
fallback options for unsupported browsers.
At a minimum, to use the audio element the following
attributes must be used:

• src defines the URL where the audio content is hosted.

40
⚫ type defines the file format.
• controls must be specified or no visual element will appear
control playback of the content.
A closing audio tag must be used, and additional content may
optionally be nested between the opening and closing tags.
In the code below, the text between the tags would appear in
the event that the browser viewing the web page did not
support the audio element.
There are several other attributes that may be optionally
added to the audio element including:
• autoplay: If this attribute is used, the audio will begin to
play as soon as enough has been downloaded to begin
playback.
 loop: When this attribute is present the audio file will
automatically start over once it has played through.
⚫ muted: If you want audio content to be muted when
initially loaded ce this attribute.
 preload: This element can be used with the value none,
metadata, or auto to tell the browser how much of the
audio file to preload. Note that if autoplay is applied to
an audio element it will override the preload attribute.

41
HTML5 <video>

The video element follows the same basic syntax as the audio
element. In it's most basic form, all we need to do is use the
src element to identify the video URL and add the controls
attribute so that our website visitors can control video
playback. We're also going to use the width and height
attributes to set the size of the video player, but this is
optional.

There are several additional attributes which can be used to

influence how video content is loaded and appears in the
browser. These attributes include:

 autoplay: If this attribute is used, the video will begin to

play as soon as enough of the video has been
downloaded to begin playback.
 loop: When this attribute is present the video will
automatically start over once it has finished playing.
⚫ muted: If you want the audio content of the video to be
muted use this attribute.
 preload: This element can be used with the value none,
metadata, or auto to tell the browser how much of the
video file to preload. Note that if autoplay is applied to a
video element it will override the preload attribute.

42
  poster: Use this attribute to select an image to display as
the poster for the video until playback begins.

Supported File Formats

A variety of different video and audio file formats can be
used along with these HTML5 elements. However, support
for different formats varies from one browser to the next.

Selecting File Formats for Audio Files

There are four audio formats with broad browser support.
While support for other formats is available on a more
limited basis, these four formats are the ones commonly
used for delivering audio content to the web browser.
• Wav files are very high quality but also very large.
• The MP3 format is much smaller than Wav, but it is a
proprietary format and quality issues become apparent at
low bitrates.
• AAC format is similar to the MP3 in that it is a proprietary
format. It performs better at bitrates above 100kbps.
 Ogg is an open-source standard, making it popular with
developers, and sound quality is much be low bitrates
than MP3.

43
Selecting File Formats for Video Files
There are two leading video file formats which can be used
with the video element and are supported by most web
browsers:
• WebM is a newer open-source format developed by
Google.
• MP4 higher quality and broader browser support than
WebM.

Using <track> to Add Subtitles

The track element can be added as a child to any audio or

video element to link a timed text file to the media content.
The file linked with the track element must be formatted in
WebVTT format. Quite often more than one track file is
added to a video or audio element to provide captions or
subtitles in multiple languages.
The kind attribute is used to specify what type of data is
contained in the attached file. Values that can be applied to
the kind attribute include subtitles, captions, descriptions,
chapters, and metadata.
Other attributes that may be used with the track element
include:

44
⚫ label: Used to add a label to help users identify the track
best suited to meet their needs.
⚫ src: Identifies the URL of the track file.
 srclang: This attribute is required if the kind attribute is
set to subtitles and identifies the language of the
subtitles contained in the associated track file.

[ REMAINING FROM MA’AM NOTES]

--------------------------------------UNIT-2----------------------------------

45
UNIT-3

Digital Payment Requirements

The Government of India has been taking several measures

to promote and encourage digital payments in the country.
As part of the 'Digital India' campaign, the government aims
to create a 'digitally empowered' economy that is 'Faceless,
Paperless, Cashless'. There are various types and modes of
digital payments. Some of these include the use of
debit/credit cards, internet banking, mobile wallets, digital
payment apps, Unified Payments Interface (UPI) service,
Unstructured Supplementary Service Data (USSD), Bank
prepaid cards, mobile banking, etc.
Digital payment methods are often easy to make, more
convenient and provide customers the flexibility to make
payments from anywhere and at anytime. These are a good
alternative to traditional methods of payment and speeden
up transaction cycles. Post demonetization, people slowly
started embracing digital payments and even small time
merchants and shop owners started accepting payments
through the digital mode.

46
Digital Payment
Digital payment occurs when goods or services are purchased
through the use of various electronic mediums. There is no
use of cash or cheques in this type of payment method.

Requirements for Digital Payment Systems

The success or failure of any on-line payment systems
depends not only on technical issues but also but also on
user's acceptance. The user's acceptance depends on a
number of issues such as advertisement, market position,
user preferences etc.

1. Atomicity
Atomicity guarantees that either the user's on-line payment
transaction is completed or it does not take place at all. If the
current on-line payment transaction fails then it should be
possible to recover the last stable state. This feature
resembles the transactional database systems, in which
either a transaction is committed or rolled back.

2. Anonymity/Privacy
Anonymity suggests that the identity, privacy and personal
information of the individuals using the on-line payment
methods should not be disclosed. In some on-line payment
methods, it is possible to trace the individual's payment
details. In case of purchases using Debit Card, it is possible to
47
find out the purchase details as that information is registered
at the vendor and the bank's databases. So some on-line
payment systems like
Debit cards are not anonymous systems. In some other
payment systems, anonymity can be weak as the efforts to
get the purchase details of the user can be more expensive
than the information itself. There are privacy laws in several
countries to guarantee the privacy of the user and protect
the misuse of personal information by the financial
institutions.

3. Scalability
As the on-line payment methods are getting more and more
acceptance of the users, the demand for on-line payment
infrastructure will also be increasing rapidly. Payment
systems should handle the addition of users without any
performance degradation. To provide the required quality of
service without any performance degradation, the payment
systems need a good number of central servers. The central
servers are needed to process or check the payment
transactions. The growing demand for the central servers,
limits the scalability of the on-line payment systems.

4. Security
Security is one of the main concerns of the on-line payment
methods and it is one of the crucial issues which decide the
general acceptance of any on-line payment methods.
48
Internet is an open network without any centralized control
and the on- line payment systems should be protected
against any security risks to ensure a safe and reliable service
to the users. When users are paying on-line they want to be
sure that their money transaction is safe and secure. On the
other hand, banks and payment companies and other
financial institutions want to keep their money, financial
information and user information in a secure manner to
protect it against any possible misuse.

5. Reliability
As in any other business activity, even in on- line payment
methods, the user expects a reliable and an efficient system.
Any on-line payment system would fail, despite of it's
advanced technological features, if it fails to get the users
acceptance and pass their reliability tests. There are many
reasons, which can make the system unreliable to the users.
Some of them are Security threats, poor maintenance and
unexpected breakdowns.

6. Usability
Usability is an important characteristic of an interactive
product like on-line payments. On-line payment systems
should be user friendly and easy to use. Any on-line payment
system with complicated procedures, complex payment
process and other associated complications with the
payment environment, can't get users acceptance. Poor

49
usability of a web shopping or a payment method could also
discourage on-line shopping. To make the online payments
simple and user friendly, some of the on-line payment
systems allow the users to make payments with minimum
authorization and information inputs.

7. Inter operability
In on-line payment Technologies, different users prefer
different payment systems. The different payment systems
use different kinds of currencies and the payment systems
should support interoperability between them. If a payment
system is inter operable, then it is open and allows other
interested parties to join without confining to a particular
currency. In the real life situation, there should be some sort
of mutual agreement between various on-line payment
systems to provide the interoperability. Interoperability can
be achieved by the means of open standards for data
transmission protocols and infrastructure. An interoperability
system can gain much acceptance and high level of
applicability than individually operating payment systems.
Because of the rapid technological changes, it's not always
easy to get interoperability between various payment
systems.

50
Electronic Payment System, Types of Electronic Payment
System

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

paying for goods and services through an electronic medium,
without the use of checks or cash. It's also called an
electronic payment system or online payment system. Read
on to learn more.
The electronic payment system has grown increasingly over
the last decades due to the growing spread of internet-based
banking and shopping. As the world advances more with
technology development, we can see the rise of electronic
payment systems and payment processing devices. As this
increase, improve, and provide ever more secure online
payment transactions the percentage of check and cash
transactions will decrease.

Methods of Electronic Payment System

One of the most popular payment forms online is credit and
debit cards. Besides them, there are also alternative payment
methods, such as bank transfers, electronic wallets, smart
cards or bitcoin wallet (bitcoin is the most popular crypto
currency). E- payment methods could be classified into two
areas, credit payment systems and cash payment systems.

51
1. Credit Payment System
• Credit Card: A form of the e- payment system which
requires the use of the card issued by a financial institute to
the cardholder for making payments online or through an
electronic device, without the use of cash.
⚫ E-wallet: A form of prepaid account that stores user's
financial data, like debit and credit card information to make
an online transaction easier.
• Smart card: A plastic card with a microprocessor that can
be loaded with funds to make transactions; also known as a
chip card.
2. Cash Payment System
• Direct debit: A financial transaction in which the account
holder instructs the bank to collect a specific amount of
money from his account electronically to pay for goods or
services.
⚫ E-check: A digital version of an old paper check. It's an
electronic transfer of money from a bank account, usually
checking account, without the use of the paper check. E-cash
is a form of an electronic payment system, where a certain
amount of money is stored on a client's device and made
accessible for online transactions.
• Stored-value card: A card with a certain amount of money
that can be used to perform the transaction in the issuer
store. A typical example of stored-value cards are gift cards.

52
Advantages of electronic payment systems

(i) Time savings: Money transfer between virtual accounts

usually takes a few minutes, while a wire transfer or a postal
one may take several days. Also, you will not waste your time
waiting in lines at a bank or post office.
(ii) Expenses control: Even if someone is eager to bring his
disbursements under control, it is necessary to be patient
enough to write down all the petty expenses, which often
takes a large part of the total amount of disbursements. The
virtual account contains the history of all transactions
indicating the store and the amount you spent. And you can
check it anytime you want. This advantage of electronic
payment system is pretty important in this case.
(iii) Reduced risk of loss and theft: You can not forget your
virtual wallet somewhere and it can not be taken away by
robbers. Although in cyberspace there are many scammers,
in one of the previous articles we described in detail how to
make your e- currency account secure.
(iv) Low commissions: If you pay for internet service provider
or a mobile account replenishment through the UPT
(unattended payment terminal), you will encounter high
fees. As for the electronic payment system: a fee of this kind
of operations consists of 1% of the total amount, and this is a
considerable advantage.

53
(v) User-friendly: Usually every service is designed to reach
the widest possible audience, SO it has the intuitively
understandable user interface. In addition, there is always
the opportunity to submit a question to a support team,
which often works 24/7. Anyway you can always get an
answer using the forums on the subject.
(vi) Convenience: All the transfers can be performed at
anytime, anywhere. It's enough to have an access to the
Internet.

Disadvantages of electronic payment systems

(i) Restrictions: Each payment system has its limits regarding

the maximum amount in the account, the number of
transactions per day and the amount of output.
(ii) The risk of being hacked: If you follow the security rules
the threat is minimal, it can be compared to the risk of
something like a robbery. The worse situation when the
system of processing company has been broken, because it
leads to the leak of personal data on cards and its owners.
Even if the electronic payment system does not launch plastic
cards, it can be involved in scandals regarding the Identity
theft.
The problem of transferring money between different
payment systems- Usually the majority of electronic payment
systems do not cooperate with each other. In this case, you
have to use the services of e-currency exchange, and it can
54
be time-consuming if you still do not have a trusted service
for this purpose. Our article on how to choose the best e-
currency exchanger greatly facilitates the search process.
(iii) The lack of anonymity: The information about all the
transactions, including the amount, time and recipient are
stored in the database of the payment system. And it means
the intelligence agency has an access to this information. You
should decide whether it's bad or good.
(vi) The necessity of Internet access: If Internet connection
fails, you can not get to your online account.

Concept of e-Money
Broadly, electronic money is an electronic store of monetary
value on a technical device. The definition of electronic
money is becoming more scientific and specific with
developments associated with it. The European Central Bank
defines e-money in the following words. "E- money can be
defined as amount of money value represented by a claim
issued on a prepaid basis, stored in an electronic medium
(card or computer) and accepted as a means of payment by
undertakings other than the issuer" (ECB).
E money is a monetary value that is stored and transferred
electronically through a variety of means a mobile phone,
tablet, contactless card (or smart cards), computer hard drive
or servers. Electronic money need not necessarily involve
bank accounts in transaction but acts as a prepaid bearer

55
instrument. They are often used to execute small value
transactions.

Electronic Money
Scrip or money that is exchanged only through electronically
is referred to as electronic money. Electronic Money is also
referred as e-money, Electronic Cash, Digital Money,
Electronic Currency, Digital Currency, e-currency, Digital
Cash, and Cyber Currency. Electronic Money uses Internet,
Digital Stored Value systems, and Computer Networks.
Some of the examples of electronic money are Direct
Deposit, EFT (Electronic Funds Transfer), Virtual Currency,
and Digital Gold Currency.

TYPES OF ELECTRONIC CURRENCIES

There are two types of electronic currencies namely: Hard
Electronic Currency and Soft Electronic Currency:

• Hard Electronic Currency does not allow reversing charges

i.e. it supports only Non-Reversible transaction. The
advantage of this type is that it reduces the operating cost of
e- currency system.
• Soft Electronic Currency allows payment reversals. The
payment is reversed only in case of dispute or fraud. The
payment reversible time will be 72 hrs or even more. Some
examples of this type are Credit Card and Pay Pal.
56
Electronic Money systems are developing day by day. Some
of the developments are: it can be used with Secured Credit
Cards for wide range facilities and the bank accounts that are
linked can be used with an internet to exchange currency
with Secure Micropayment system like Pay Pal.

Different Systems of Electronic Money

Electronic Money includes three different systems namely

1. Centralized Systems,
2. Decentralized Systems, and
3. Offline Anonymous Systems.

Centralized Systems
There are many centralized systems that directly sell their e-
currency to end users is Web Money, Pay Pal, Hub Culture
Ven, and CashU but Liberty Reserve sells only via 3rd party
digital currency exchangers.

Decentralized Systems
Electronic Money includes some decentralized systems. They
are:

Bitcoin, and Ripple Monetary System.

57
(i) Bitcoin: Bitcoin is a Peer to Peer Electronic Money system
with maximized inflation limit.
(ii) Ripple Monetary System: Ripple Monetary system is a
system that is developed to distribute electronic money
system independent to local currency.

Offline Anonymous System

Offline Anonymous System can be done 'offline'. In this
electronic money system, the merchants do not need to have
interaction with banks before receiving currency from the
users. Instead of that, the merchants can collect spent money
by users and deposits the money later to the bank. The
merchant can deliver his storage media in bank for
exchanging the electronic money to cash.

Infrastructure Issues and Risks in EPS

Infrastructure is necessary for the successful implementation

of electronic payments. Proper Infrastructure for electronic
payments is a challenge.
1. For electronic payments to be successful, there is the need
to have reliable and cost effective infrastructure that can be
accessed by majority of the population.

58
2. Electronic payments communication infrastructure
includes computer network. such as the internet and mobile
network used for mobile phone.
3. In addition, banking activities and operations need to be
automated. A network that links banks and other financial
institutions for clearing and payment confirmation is a pre-
requisite for electronic payment systems. mobile network
and Internet are readily available in the developed world and
users usually do not have problems with communication
infrastructure.
4. In developing countries, many of the rural areas are
unbanked and lack access to critical infrastructure that drives
electronic payments.
5. Some of the debit cards technologies like Automated Teller
Machines (ATMs) are still seen by many as unreliable for
financial transactions as stories told by people suggested that
they could lose their money through fraudulent deductions,
debits and other lapses for which the technology had been
associated with by many over the last few years.
6. Telecommunication and electricity are not available
throughout the country, which negatively affect the
development of e-payments. The development of
information and communication technology is a major
challenge for e-payments development. Since ICT is in its
infant stages in Nepal, the country faces difficulty promoting
e- payment development.

59
RISKS IN IN ELECTRONIC PAYMENT SYSTEMS
Electronic payments allow you to transfer cash from your
own bank account to the bank account of the recipient
almost instantaneously. This payment system relies heavily
on the internet and is quite popular due to the convenience it
affords the user. It would be hard to overstate the
advantages of electronic payment systems, but what about
the risks? Certainly they exist, both for financial institutions
and consumers.

(i) The Risk of Fraud

Electronic payment systems are not immune to the risk of
fraud. The system uses a particularly vulnerable protocol to
establish the identity of the person authorizing a payment.
Passwords and security questions aren't foolproof in
determining the identity of a person. So long as the password
and the answers to the security questions are correct, the
system doesn't care who's on the other side. If someone
gains access to your password or the answers to your
security question, they will have gained access to your money
and can steal it from you.

(ii) The Risk of Tax Evasion

The law requires that businesses declare their financial
transactions and provide paper records of them so that tax
compliance can be verified. The problem with electronic
systems is that they don't fit very cleanly into this paradigm
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and so they can make the process of tax collection very
frustrating for the Internal Revenue Service. It is at the
business's discretion to disclose payments received or made
via electronic payment systems in a fiscal period, and the IRS
has no way of knowing if it's telling the truth or not. That
makes it pretty easy to evade taxation.

(iii) The Risk of Payment Conflicts

One of the idiosyncrasies of electronic payment systems is
that the payments aren't handled by humans but by an
automated electronic system. The system is prone to errors,
particularly when it has to handle large amounts of payments
on a frequent basis with many recipients involved. It's
important to constantly check your pay slip after every pay
period ends in order to ensure everything makes sense.
Failure to do this may result in payment conflicts caused by
technical glitches and anomalies.

(iv) The Risk of Impulse Buying

Impulse buying is already a risk that you face when you use
non-electronic payment systems. It is magnified, however,
when you're able to buy things online at the click of a mouse.
Impulse buying can become habitual and makes sticking to a
budget almost impossible.

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 Electronic Fund Transfer
ELECTRONIC FUND TRANSFER
Electronic Funds Transfer (EFT) is the electronic transfer of
money from one bank account to another, either within a
single financial institution or across multiple institutions, via
computer-based systems, without the direct intervention of
bank staff. EFT transactions are known by a number of
names. In the United States, they may be referred to as
electronic checks or e-checks.

Types of Electronic Fund Transfer

The term covers a number of different payment systems, for
example:

 Cardholder-initiated transactions, using a payment card

such as a credit or debit card
 Direct deposit payment initiated by the payer
• Direct debit payments for which a business debits the
consumer's bank accounts for payment for goods or services
• Wire transfer via an international banking network such as
SWIFT
• Electronic bill payment in online banking, which may be
delivered by EFT or paper check
• Transactions involving stored value of electronic money,
possibly in a private currency.

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HOW IT WORKS?

EFTs includes direct-debit transactions, wire transfers, direct

deposits, ATM withdrawals and online bill pay services.
Transactions are processed through the Automated Clearing
House (ACH) network, the secure transfer system of the
Federal Reserve that connects all U.S. banks, credit unions
and other financial institutions.
For example, when you use your debit card to make a
purchase at a store or online, the transaction is processed
using an EFT system. The transaction is very similar to an
ATM withdrawal, with near-instantaneous payment to the
merchant and deduction from your checking account.
Direct deposit is another form of an electronic funds transfer.
In this case, funds from your employer's bank account are
transferred electronically to your bank account, with no need
for paper-based payment systems.

Types of EFT payments

There are many ways to transfer money electronically. Below

are descriptions of common EFT payments you might use for
your business.
• Direct deposit lets you electronically pay employees. After
you run payroll, you will tell your direct deposit service
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provider how much to deposit in each employee's bank
account. Then, the direct deposit provider will put that
money in employee accounts on payday. Not all employers
can make direct deposit mandatory, so make sure you brush
up on direct deposit laws.
• Wire transfers are a fast way to send money. They are
typically used for large, infrequent payments. You might use
wire transfers to pay vendors or to make a large down
payment on a building or equipment.
• ATMs let you bank without going inside a bank and talking
to a teller. You can withdraw cash, make deposits, or transfer
funds between your accounts.
• Debit cards allow you to make EFT transactions. You can
use the debit card to move money from your business bank
account. Use your debit card to make purchases or pay bills
online, in person, or over the phone.
• Electronic checks are similar to paper checks, but used
electronically. You will enter your bank account number and
routing number to make a payment.
 Pay-by-phone systems let you pay bills or transfer
money between accounts over the phone.
• Personal computer banking lets you make banking
transactions with your computer or mobile device. You can
use your computer or mobile device to move money
between accounts.

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Security Issues in E- Commerce: Need and Concept

In spite of its advantages and limitations E- commerce has

got some security issues in practical. E-commerce security is
nothing but preventing loss and protecting the areas
financially and informational from unauthorized access, use
or destruction. Due the rapid developments in science and
technology, risks involved in use of technology and the
security measures to avoid the organizational and individual
losses are changing day to day. There are two types of
important cryptography we follow for secured E-commerce
transactions.
Symmetric (private-key) cryptography: This is an encryption
system in which sender and receiver possess the same key.
The key used to encrypt a message is also used to decrypt the
encrypted message from the sender.

Asymmetric (public-key) cryptography: In this method the

actual message is encoded and decoded using two different
mathematically related keys, one of them is called public key
and the other is called private key.
Security is an essential part of any transaction that takes
place over the internet. Customers will lose his/her faith in e-
business if its security is compromised. Following are the
essential requirements for safe e-payments/transactions:

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  Confidentiality: Information should not be accessible to
an unauthorized person. It should not be intercepted
during the transmission.
• Integrity: Information should not be altered during its
transmission over the network.
• Availability: Information should be available wherever and
whenever required within a time limit specified.
 Authenticity: There should be a mechanism to
authenticate a user before giving him/her an access to
the required information.
• Non-Repudiability: It is the protection against the denial of
order or denial of payment. Once a sender sends a message,
the sender should not be able to deny sending the message.
Similarly, the recipient of message should not be able to deny
the receipt.
 Encryption: Information should be encrypted and
decrypted only by an authorized user.
 Auditability: Data Data should be recorded in such a way
that it can be audited for integrity requirements.

E-Commerce Security can be divided into two Broad Types:

(1) Client-Server Security

Client-server securities are popular because they increase
application processing efficiency while reducing costs and

66
gaining the maximum benefit from all resources working
together. These benefits are gained by splitting processing
between the client machine/software and server
machine/software. Each process works independently but in
cooperation and compatibility with other machines and
applications (or pieces of applications).
All independent processing must be performed to complete
the requested service. Cooperation of application processing
produces another client-server advantage, it reduces
network traffic. Since each node (client and/or server)
performs part of the processing within itself, network
communication can be kept to a minimum. For example,
static processes, like menus or edits, usually take place on
the client-side. The server, on the other hand, is responsible
for processes like updating and reporting.

(2) Data and Transaction Security

Secure Electronic Transaction (SET) is a system for ensuring
the security of financial transactions on the Internet. It was
supported initially by Mastercard, Visa, Microsoft, Netscape,
and others. With SET, a user is given an electronic wallet
(digital certificate) and a transaction is conducted and
verified using a combination of digital certificates and digital
signatures among the purchaser, a merchant, and the
purchaser's bank in a way that ensures privacy and
confidentiality. SET makes use of Netscape's Secure Sockets
Layer (SSL), Microsoft's Secure Transaction Technology (STT),
and Terisa System's Secure Hypertext Transfer Protocol (S-
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HTTP). SET uses some but not all aspects of a public key
infrastructure (PKI).

Electronic Commerce Security Environment

E-COMMERCE SECURITY ENVIRONMENT

E-commerce embodies several business transactions over
utilizing electronic systems. E-commerce website involves
internal network which might interface with World Wide
Web. E-commerce introduced external as well as internal risk
to both business and website to which it connected.
External threats to e-commerce website are raised from
various sources involving electronic economic environment
as well as risk related to the external internet. Internal
threats come from staff, internal network, management and
business processes. The most common risk is security-related
issues that relate to the interface among the consumer
transactions and network.
Intruders pose a security threat to the network through DoS
attack that can overwhelm site or theft of private financial
information after gaining access to the internal system
through vulnerabilities of an e-commerce website. Other
security threats related to these websites are summarised as
beneath:
Malicious code threats: These types of threats involve
worms, viruses and Trojan horses.

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• Viruses are external threats and have the ability to corrupt
files on the website after finding their direction in the
internal network. They might be critical as they completely
harm the computer system and disrupt normal operations of
the computer.
• Trojan horse is defined as programming code that performs
destructive functions. They attack computers while
downloading something.
Wi-Fi eavesdropping: It is one of the simplest ways in the e-
commerce to steal private information. It is recognized as
virtual listening of data that is shared across Wi-Fi network
that is not encrypted. It occurs on personal and public
computers as well.
Other Threats: Certain other threats which are raised are
data packet sniffing, port scanning and IP spoofing. An
attacker can involve a sniffer to attack an information packet
flow and scan unique data packs. Through IP spoofing, it
becomes hard to trace the intruder. The target is here to
modify the source address and provide it such a look that it
must look as though it is derived from another computer.

TECHNIQUES TO COMBAT E-COMMERCE THREATS

Encryption: It is defined as a mechanism of converting

normal information into an encoded content that cannot be
read by others except the one who sends or receive this
message.
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Having digital certificates: It is known as digital certificate
being issued by a trustworthy third party company. An SSL
certificate is essential because it gives a high authentication
level to the website. The main function of this certificate is to
secure an e-commerce website from unintended attacks like
Man-in-middle attacks.

Security threats in E- Commerce Environment

In the past few years it's seemed like there has been a new
widespread security breach every other week. High profile
incidents such as Heartbleed and WannaCry and hacks of
notable entities including Sony Pictures and the Democratic
National Committee have brought cyber security to the front
of people's minds. The magnitude of Distributed Denial of
Service (DDoS) attacks has risen with the increased number
of devices connecting to the internet, and as more of the
population engages with these devices the risk of sensitive
information being taken advantage of continues to rise.

E-COMMERCE THREATS
Some of the common security threats we may come across:-
(i) Malware
Malware, or malicious software, is any program or file that is
harmful to a computer user. Malware includes computer
viruses, worms, Trojan horses and spyware. These malicious

70
programs can perform a variety of functions, including
stealing, encrypting or deleting sensitive data, altering or
hijacking core computing functions and monitoring users'
computer activity without their permission.

(ii) Virus
A computer virus is a type of malicious software program
("malware") that, when executed, replicates itself by
modifying other computer programs and inserting its own
code. When this replication succeeds, the affected areas are
then said to be "infected" with a computer virus.
Computer viruses currently cause billions of dollars' worth of
economic damage each year, due to causing system failure,
wasting computer resources, corrupting data, increasing
maintenance costs, etc. In response, free, open-source
antivirus tools have been developed, and an industry of
antivirus software has cropped up, selling or freely
distributing virus protection to users of various operating
systems. As of 2005, even though no currently existing
antivirus software was able to uncover all computer viruses
(especially new ones), computer security researchers are
actively searching for new ways to enable antivirus solutions
to more effectively detect emerging viruses, before they have
already become widely distributed.

(iii) Spam

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Spam is the electronic equivalent of the 'junk mail' that
arrives on your doormat or in your postbox. However, spam
is more than just annoying. It can be dangerous - especially if
it's part of a phishing scam.

Spam emails are sent out in mass quantities by spammers

and cybercriminals that are looking to do one or more of the
following:-
(a) Make money from the small percentage of recipients that
actually respond to the message.
(b) Run phishing scams - in order to obtain passwords, credit
card numbers, bank account details and more
(c) Spread malicious code onto recipients' computers,

(IV) Spyware threats

Spyware is generally loosely defined as software that's
designed to gather data from a computer or other device and
forward it to a third party without the consent or knowledge
of the user. This often includes collecting confidential
confidential data such as passwords, PINs and credit card
numbers, monitoring keyword strokes, tracking browsing
habits and harvesting email addresses. In addition to all of
this, such activities also affect network performance, slowing
down the system and affecting the whole business process. It
is generally classified into four main categories: Trojans,
adware, tracking cookies and system monitors.

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(V) Trojan Horse
A Trojan horse is a destructive program that masquerades as
a benign application. Unlike viruses, Trojan horses do not
replicate themselves but they can be just as destructive. One
of the most insidious types of Trojan horse is a program that
claims to rid your computer of viruses but instead introduces
viruses into your system.

(VI) Worms
A computer worm is a standalone malware computer
program that replicates itself in order to spread to other
computers.[1] Often, it uses a computer network to spread
itself, relying on security failures on the target computer to
access it. Worms almost always cause at least some harm to
the network, even if only by consuming bandwidth, whereas
viruses almost always corrupt or modify files on a targeted
computer.

Basics of Encryption and Decryption

ENCRYPTION
In computing, encryption is the method by which plaintext or
any other type of data is converted from a readable form to
an encoded version that can only be decoded by another
entity if they have access to a decryption key. Encryption is
one of the most important methods for providing data

73
security, especially for end-to-end protection of data
transmitted across networks.
Encryption is widely used on the internet to protect user
information being sent between a browser and a server,
including passwords, payment information and other
personal information that should be considered private.
Organizations and individuals also commonly use encryption
to protect sensitive data stored on computers, servers and
mobile devices like phones or tablets.

Benefits of Encryption
The primary purpose of encryption is to protect the
confidentiality of digital data stored on computer systems or
transmitted via the internet or any other computer network.
A number of organizations and standards bodies either
recommend or require sensitive data to be encrypted in
order to prevent unauthorized third parties or threat actors
from accessing the data. For example, the Payment Card
Industry Data Security Standard requires merchants to
encrypt customers' payment card data when it is both stored
at rest and transmitted across public networks.
Modern encryption algorithms also play a vital role in the
security assurance of IT systems and communications as they
can provide not only confidentiality, but also the following
key elements of security:-
• Authentication: The origin of a message can be verified.

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  Integrity: Proof that the contents of a message have not
been changed since it was sent.
 Non-repudiation: The sender of a message cannot deny
sending the message.

Types of Encryption

(1) Symmetric key/Private key

In symmetric-key schemes, the encryption and decryption
keys are the same. Communicating parties must have the
same key in order to achieve secure communication
(2) Public key
In public-key encryption schemes, the encryption key is
published for anyone to use and encrypt messages. However,
only the receiving party has access to the decryption key that
enables messages to be read, Public-key encryption was first
described in a secret document in 1973;, before, then all
encryption schemes were symmetric-key (also called private-
key).

DECRYPTION
The conversion of encrypted data into its original form is
called Decryption. It is generally a reverse process of
encryption. It decodes the encrypted information so that an
authorized user can only decrypt the data because
decryption requires a secret key or password.
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One of the reasons for implementing an encryption-
decryption system is privacy. As information travels over the
Internet, it is necessary to scrutinise the access from
unauthorized organizations or individuals. Due to this, the
data is encrypted to reduce data loss and theft. Few common
items that are encrypted include text files, images, e- mail
messages, user data and directories. The recipient of
decryption receives a prompt or window in which a password
can be entered to access the encrypted data. For decryption,
the system extracts and converts the garbled data and
transforms it into words and images that are easily
understandable not only by a reader but also by a system.
Decryption can be done manually or automatically. It may
also be performed with a set of keys or passwords.
There are many methods of conventional cryptography, one
of the most important and popular method is Hill cipher
Encryption and Decryption, which generates the random
Matrix and is essentially the power of security. Decryption
requires inverse of the matrix in Hill cipher. Hence while
decryption one problem arises that the Inverse of the matrix
does not always exist. If the matrix is not invertible then the
encrypted content cannot be decrypted. This drawback is
completely eliminated in the modified Hill cipher algorithm.
Also this method requires the cracker to find the inverse of
many square matrices which is not computationally easy. So
the modified Hill- Cipher method is both easy to implement
and difficult to crack.
------------------------------unit-3-------------------------------------------

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 Unit-4
E-Commerce application in various industries
E-COMMERCE
E-Commerce, which primarily refers to buying, selling,
marketing and servicing of products or services over internet.
Business on the net is classified into B2B (Business to
Business), B2C (Business to Consumer) and C2C (Consumer to
Consumer).B2B transactions are largely between industrial
manufacturers, partners, and retailers or between
companies.B2C transactions take place directly between
business establishments and consumers.
B2B sites are essentially the net meeting points for buyers
and sellers of the industrial world. They serve a limited
number of customers. The Turnover would be many times
that of the most B2C sites and most importantly they make
profits.
B2C sites are offering low value items CDs, Cassettes, Food,
Toys, Flowers, and Cards etc because no complicated logistics
are involved.
C2C sites don't form a very high portion of web-based
commerce. Most visible examples are the auction sites.
Basically, if someone has something to sell, then he gets it
listed at an auction sites and others can bid for it.

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E-PROCUREMENT
The Internet offers a natural platform to facilitate efficient
procurement as numerous buyers and sellers find each other
and transact according to some pre-specified protocols. The
following are the procurement strategies available for a
manufacturer.
 Strategic Partnership
• Online Search Strategy
• Combined Strategy
1. Strategic Partnership
Strategic partnership strategy is to develop a long-term
supply relationship with specific supplier.

2. Online Search Strategy

Online Search Strategy is to shop online for a better price.

3. Combined Strategy
The combined strategy is to combine both - sign a long-term
purchase contract with a supplier up to a certain level, but if
necessary additional quantity may be purchased online.

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E-COLLABORATION

We define e-collaboration as business-to- business

interactions facilitated by the Internet. These include
information sharing and integration, decision sharing,
process sharing and resource sharing. There are many new
cases that examine different elements of collaboration from
information sharing and integration to process and resource
sharing.

E-COMMERCE APPLICATION IN BANKING INDUSTRY

New information technologies and emerging business forces
have triggered a new wave of financial innovation - electronic
banking (e- banking). The banking and financial industry is
transforming itself in unpredictable ways (Crane and Bodie
1996), powered in an important way by advances in
information technology (Holland and Westwood 2001). Since
the 1980s, commercial banking has continuously innovated
through technology-enhanced products and services, such as
multi-function ATM, tele- banking, electronic transfers and
electronic cash cards. Over the past decade, the Internet has
clearly played a critical role in providing online services and
giving rise to a completely new channel. In the internet age,
the extension of commercial banking to the cyberspace is an
inevitable development (Liao and Cheung 2003).

79
E-banking creates unprecedented opportunities for the banks
in the ways they organize financial product development,
delivery and marketing via the internet. While it offers new
opportunities to banks, it also poses many challenges such as
the innovation of IT applications, the blurring of market
boundaries, the breaching of industrial barriers, the entrance
of new competitors and the emergence of new business
models (Saatcioglu et al. 2001, Liao and Cheung 2003). Now
the speed and scale of the challenge are rapidly increasing
with the pervasiveness of the internet and the extension of
information economy (Holland and Westwood 2001).

Products Offered
All of the major banks in India have an internet presence
offering a range of products directly to consumers by way of
proprietary internet sites. While the initial focus of the banks
has been in the retail- banking sector, there is a growing
range of small to medium enterprise ("SME") and corporate
banking products and services being offered. The products
available include

(a) Funds Transfer and Payment Systems

The major banks offer a range of online financial services
including
(i) Payment of bills;
(ii) Transfer of funds;

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(iii) Remittances;
(iv) Applications for letters of credit; and
(v) Settlement through the MAS Electronic Payment System.
(b) B2B E-Commerce
At least one of the major commercial banks offers an
integrated B2B e-commerce product directly through its
website, involving product selection, purchase order, invoice
generation, and payment. However, integrated B2B products
and services are not as yet generally available directly from
the banks.

(c) Securities Placement and Underwriting/Capital Markets

Activities
Most commercial banks offer securities services such as
online payment for shares and subscriptions for initial public
offerings directly though their websites. However, more
sophisticated online brokering services are generally only
available through the banks' share-broker subsidiaries.

(d) Securities Trading

A full range of online securities services are provided by the
specialist securities subsidiaries of the major commercial
banks including online trading.

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(e) Retail Banking
All of the major commercial banks have established websites
for retail services. Typically such sites will offer the following
services:
(i) A full range of personal account services, including foreign
currency accounts;
(ii) Funds transfers;
(iii) Bill payments;
(iv) Credit card services;
(v) Investment services; and
(vi) Online application for loan services including
E-Commerce has provided the platform that enables the
implementation of core banking solutions (CBS). Today all the
major banks have gone on to implement CBS. And with time
being a premium among bank customers, banks have been
ideating and developing newer modes of delivering banking
services. Today there is a whole plethora of such platforms
available ranging from the ATM to the mobile.
Banks like State Bank of India and its associates are recording
over 100,000 transactions on a daily basis through their
5,000 plus network of ATMs. Incidentally the profile and
usage pattern of ATMs in India matches that of ATMs abroad
with an overwhelming (more than 80%) being used for cash
withdrawal. Today with over 20,000 ATMs, India is recording
one of the fastest growth in terms of ATM proliferation,

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though the per capita availability of ATMs doesn't compare
anywhere to markets like Japan or the US.
With most banks now providing Internet banking facility,
bankers say that customers are using the bank for a variety of
purposes. One commonly used service being booking of rail
tickets. Bankers also say that customers are using bank
networks for online shopping. Most of the online banking
channels are linked to major retailers. Estimates also indicate
that today over 40% of the share transactions are being put
through the internet.

E-COMMERCE APPLICATION IN TRAVEL INDUSTRY

In India e-commerce is being driven by the growing online
travel industry and online travel bookings have increased
substantially after the entry of low cost carriers. Currently,
online travel industry is contributing 50% to the revenue
generated by e-commerce in India. To boot, online travel
industry is growing at 125% (compounded annual growth
rate) annually. Generating revenues of around $300-500
million (Rs.1,350- 2,250 crore) currently, the size of the
online travel industry is around 2% of the entire travel
industry. Online travel industry is expected to become a $2
billion industry by 2008. In India, it is basically low cost
carriers like Air Deccan and the Railways, which have
significantly led to increased use of e- commerce.
However airline industry is still exploring the advantages of e-
commerce. Currently e- commerce is being used mostly for e-

83
ticketing among the domestic airlines though e-ticketing
penetration in India is as low as 17% against the world
average of 49% and 42% in Asia Pacific. But according to the
UN's International Telecommunication Union, about 400
million travelers worldwide are expected to book tickets on-
line this fiscal.
Air Deccan launched its operations with a 100% web enabled
ticketing service and in no time became India's largest e-
commerce site, with Rs.30 million worth transactions per
day. Electronic ticketing now accounts for 35%-40% of tickets
sold by Air Deccan. E-ticketing not only make tickets more
accessible for travelers 24/7 but also eliminates the need to
invest in ticketing offices and other related infrastructure
reducing operational costs. Also travelers could avoid the
long queues and save the service charges payable to travel
agents.
Being a 100% e-ticket enabled airline, Kingfisher not only
offers e-ticketing but also electronic check-in, wherein after
printing the boarding card on-line the customer can use web-
enabled check-in on the airline's website and board the plane
directly passing through only mandatory security check at the
airport. One of the biggest advantage of e-ticketing is that
one can neither lose an e-ticket nor destroy it by leaving it
accidentally in the pocket. Also e- ticketing environment
offers much better degree of connectivity and reachability.

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E-COMMERCE APPLICATION in GOVERNMENT
India is now getting used to e-tendering. The Andhra Pradesh
government's initiative is now a model for other states. It
began in the year 2002 in Andhra Pradesh State government
projects had been stalled by delays in awarding tenders.
Cartels regularly cornered the bulk of government contracts
and bids were tampered with after closure. For
N.Chandrababu Naidu, the tech-savy chief minister in a a
hurry, this was unacceptable. He needed a way around the
mess and predictably by use of technology. Now, 90% of all
the tenders in Andhra Pradesh are completed online. Last
year, orders worth Rs.15,000 crore were placed. While it
earlier took anywhere between 90 and 135 days to finalise a
tender, today it takes only 35 days. Northern Railway is
planning to implement E-Procurement (E- Works contracts)
System from December 2008.
Globally, e-commerce growth has been led by the popularity
of online shopping portals like amazon.com and ebay.com but
in India that has not been the case. It is mainly driven by the
online travel industry and banking sector. For instance, 59% of
Indian Internet users book airline tickets online and the figure
is expected to touch 70% next year. Online rail ticket booking
stands at 39% of the total bookings. As far as banking is
concerned, there are 28 million online banking users in India.
This figure is expected to go up to over 35 million by 2017- 18
that will include both internet and mobile banking users.
According to the Internet and Mobile Association of India
(IAMAI), the e- commerce industry in India is expected to grow

85
to a size of Rs.18,300 crore by 2017 against the Rs.11,200
crore. The total number of internet users which right now is
400 million is expected to reach 1000 million by 2020.

Emerging Trends in E-Commerce

In today's time, all thanks to advancement in technology
nothing or no business is restricted to one place, one city or
even one country anymore. Everything is global. In the past
few years e-commerce industry has taken a ride and has come
to become the need of the hour. E-Commerce industry as a
whole is evolving at a great pace and as for 2016 and 2017, it
has already risen tremendously.
There are new trends emerging in this space, such as-

(1) Moving to Mobile Commerce

As per a recent report, it is predicted that by the end of 2016
almost a third of the world's population will have access to
Smartphone. Having this feature has become more of a
necessity. E-Commerce stores must fit in all screens in order
to enhance customer experience or they may be losing on
some serious business. As per recent Forbes study, 87% of the
gen-X people spend most of their time on digital devices every
day than ever.

(2) Choose how you want to pay

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Convenient and more payment options new businesses are
emerging to facilitate new payment models to enhance online
shopping experience. They aim not only to make wider options
available but also to increase payment security for both buyers
and sellers. In the past few years, many new models and
gateways have emerged like e- wallets, Chip card readers,
magnetic cards, EMV and cashback services.

(3) Multi Channel Model

Inspite of booming eCommerce market, retailers have come
to an understanding that Omni Channel /Multiple channel is
must for any business model. Though there has been a lot of
buzz on online shopping comfort, in reality it has been
recorded that many customers may surf net all day but at the
end do need a brick and mortar store to make the final
purchase. However, new technologies such as instore digital
services are emerging to make the physical store experience
better.

(4) Seamless Shopping experience

Many new features are being added by all companies to
facilitate seamless shopping for example stores are now
offering easy on the spot or online payments, easy wallets
with discounts and coupons or unique store debit cards.

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(5) Social E-commerce
Retailers are adopting social media as their lead sales medium.
Social network has come to play the most important role in
the retail world lately, almost 40 % purchases are made
because of social media handles. Thus , social network is sure
expected to rise in the coming time.

(6) Quality rather than quantity

Retailers have come to an understanding that now having
more variety will not win them customers, thus the focus has
shifted to enhancing customized shopping experience by
introducing new features. The emphasis is now being laid on
unique online features like virtual trial rooms, zoom in
pictures, 360 degree image view.

(7) Customer Relationship

With the increasing variety available the customer loyalty is
now completely out of picture. It requires well integrated
technology supporting easy payments and high tech shopping
experience. The focus is now being shifted from discounts to
better integrated technology services.

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(8) Customer service
With the increasing online shopping, people are becoming
more and more comfortable with the concept of choosing
amongst great variety at the comfort of their own space
anywhere, anytime 24/7. Thus, there will be a rise in customer
support service feature in the coming time.

(9) Smarter Customers

With more shopping and payment options than ever,
customers are more informed and empowered now the stakes
are much highe. It is utmost important to win their trust now
than ever, but maintaining quality and logistics.

(10) Merging online and offline

It has become important to merge online /offline systems to
facilitate easy working. A well integrated technology is crucial.
"Change is the essence of life" in order to survive and make a
mark in today's time retailers must be extremely flexible and
mouldable towards the smart customers changing needs. It
requires tools like social media monitoring, customer
feedback & so on. It is the need today to stay upbeat with the
changing trends and technology to stay long.

Mobile Commerce: Economic, Technological and Social

Consideration

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Mobile commerce is founded upon the increasing adoption of
electronic commerce. The rapid growth of mobile commerce
is being driven by a number of positive factors, including the
demand for applications from an increasingly mobile
consumer base; the rapid adoption of online commerce,
thanks to the resolution of security issues; and technological
advances that have given wireless handheld devices advanced
capabilities and substantial computing power.

M-Commerce benefits for business

Surely, running a mobile app for ecommerce can't be the sole
guarantee of profit. This is a great additional value tool to
engage customers and offer experiences. Any amount of
investment to make an app, if done wisely, will be justified by
loyal customers. Also, check your competition - if they have
app, you should probably too.
Now we are going to name main advantages of m-commerce,
with few practical examples.

(1) Faster purchases

Yes, many sites have mobile versions, though apps are
generally 1.5 times faster when loading data and search
results on mobile devices. Moreover, there is no need to pull
data from a server and so customers can browse and
purchase products faster. As mobile ecommerce apps offer
same functionality as desktop apps, people may purchase
items directly within an app.
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M-commerce revenue has been rising at 30- 40% rate
annually since 2014, and by the end of 2017 is expected to
reach $150b total. The biggest retail app Amazon increased
number of customers from 43 million in 2015 to 67 million in
2016. The reason for such achievements is intuitive mobile
browsing, which in turn drives sales up.

(2) Better customer experience

Because it matters. People are well familiar with how
smartphones and tablets work, so they already know how to
navigate to desired products in few clicks. In addition to
purchases, customers can share their joy of bought goods
with friends, or ask for advice from community of
shopaholics. Smooth customer experience equal better
conversion rates and revenue
To reach these goals, your online shopping app should be:
• Fast
• Convenient
• Interactive
• Exclusive

(3) Direct connection to customers (push notifications)

Shoppers get such alerts when they open a mobile app, and
may get them even without activating an app. 50% of users
like notifications, and 80% of users say offers and rewards

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make them more loyal to a brand. This is personal
communication, if you look at it from another angle, store to
customer directly. Most of people perceive informing about
news or discounts as care, and they want exclusive stuff.

(4) Deeper analytics

Knowing your customers equals prosperity in business these
days. Knowing customers demands data, at least very basic
information like age, sex, location, shopping history. Within
your mobile app you may build and set user analytics of
various levels of sophistication. It depends on your business
strategy and a budget available to make an app.

With such data you will understand your target audience

much better, and will be able to increase sales. Names,
phone numbers, emails, buying patterns and lots of other
things in store. For instance, Walmart app that 22 million
customers use every month, uses mobile data, online data
and sales data combined to deliver better customer
experience. It is a whole and enormous infrastructure.

(5) Cost reduction and productivity

By reaching your audience faster with a mobile app you
obviously cut down marketing campaign costs. If an app has
social media integration, users will do their part too in

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spreading the word. You can even earn from placing ads
within your app later on.

(6) Store navigation/geolocation

Mobile apps have a much better competitive (technical) in
regard to marketing opportunities. Front and back camera,
scanning codes, positioning system for location, compass,
accelerometer, gyroscope and other build-in features can be
used for commercial purposes. One of the top benefits of m-
commerce solutions is navigating users to nearest stores in
their vicinity via GPS.

ADVANTAGE OF M- COMMERCE
• Convenience: With just a few clicks on mobile devices,
customers can already do shopping, banking, download
media files...and more than that. M-commerce also benefits
retailers by many of their outstanding features compared
with responsive website and mobile site.
• Flexible Accessibility: User can be accessible via mobile
devices and at the same time be accessible online too
through logging on to various mobile messengers and other
networking platforms. On the other hand, the user may also
choose not to be accessible by shutting down his mobile
device, which at times can be a good thing.
 Easy Connectivity: As long as the network signal is
available, mobile devices can connect and do commerce

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 transactions not only mobile to mobile but also mobile to
other devices. No need for modem or WI-FI connectivity
set up.
 Personalization: Each mobile device is usually dedicated to
a specific user so that it is personal. Users can do whatever
they want with their handheld devices: modify the
wallpaper, change view settings or modify contact
information as you send emails or e-payments.
 Time Efficient: Doing M- Commerce transactions do not
require the users to plug anything like personal computer
or wait for the laptop to load.

Regulatory and Ethical Considerations in E Commerce

In the Information Age, technology evolves fast and data
travels even faster. It can be difficult for the law to keep up
with new technologies and inventive ways to conduct e-
business. Because of this, the law often lags behind, and
lawmakers end up drafting laws to clean up Internet messes
instead of preventing them. Take digital file sharing - dubbed
piracy - for example, laws were not created to prevent digital
piracy until millions of albums were stolen and the music
industry was crippled. The lag in laws mean that e-business
executives must rely on ethics as they move forward in e-
commerce.

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Client Privacy
Internet businesses have a legal obligation to protect the
private information of their customers. E-commerce activity
often involves collecting secure data such as names and
phone numbers associated with email addresses. Many e-
business activities also involve transactions, so customer
banking or credit card information also ends up stored
online. Legally, it is up to the e- business to store and protect
or dispose of this sensitive data. The Children's Online Privacy
Protection Act, for example, protects the online privacy rights
of children. Under this law, parents have control of what
personal information their children can give to e-businesses.

Advertising Online
Several online marketing issues spring from the inherent
anonymity of the Internet. It is often difficult to know the
real identity of an e-business owner. A few online businesses
take advantage of this in unethical or illegal ways. Some e
Businesses track the online activity of their customers so that
they can show advertisements based on the customer's
behavior. Behavioral advertising is not illegal, and it is not
illegal to refrain from disclosing that an e-businesses tracks
activity, although many people consider this nondisclosure
unethical.

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Copyright Infringements
Due to the Internet's free flow of information, plagiarism and
copyright infringement is a continual problem. The Digital
Millennium Copyright Act addresses plagiarism and copyright
infringement in the specific context of the Internet and e-
business. Under this law, it is illegal to use online technology
to copy and distribute legally copyrighted material, such as
photography, articles or books, music or videos.

Net Neutrality
Net neutrality is the hotly debated idea that Internet users
should have equal access to all websites. Most computers
retrieve websites at the same speed, depending on the user's
Internet account settings or service, no matter if the site is a
multibillion-dollar company or a neighbor's blog. But some
Internet providers have the capability to deliver different
websites at different speeds. This is an issue because some
websites could pay providers to deliver their content at faster
speeds, while smaller business with less capital might not be
able to afford the faster processing, and the Internet would
lose its free-access-for-all feel. The Federal Communications
Commission currently supports net neutrality and bans
providers from participating in any program that offers extra
pay for higher speed access to any websites.

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Disintermediation and Reinter mediation
Intermediation is one of the most important and interesting
e-commerce issue related to loss of jobs. The services
provided by intermediaries are-
(i) Matching and providing information.
(ii) Value added services such as consulting.
The first type of service (matching and providing information)
can be fully automated, and this service is likely to be in e-
marketplaces and portals that provide free services. The
value added service requires expertise and this can only be
partially automated. The phenomenon by which
Intermediaries, who provide mainly matching and providing
information services are eliminated is called
disintermediation.
The brokers who provide value added services or who
manage electronic intermediation (also known as
infomediation), are not only surviving but may actually
prosper, this phenomenon is called Reintermediation.
The traditional sales channel will be negatively affected by
disintermediation. The services required to support or
complement e-commerce are provided by the web as new
opportunities for reintermediation. The factors that should
be considered here are the enormous number of
participants, extensive information processing, delicate
negotiations, etc. They need a computer mediator to be
more predictable.

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Legal Issues
Where are the headlines about consumers defrauding
merchants? What about fraud e- commerce websites?
Internet fraud and its sophistication have grown even faster
than the Internet itself. There is a chance of a crime over the
internet when buyers and sellers do not know each other and
cannot even see each other. During the first few years of e-
commerce, the public witnessed many frauds committed
over the internet

Fraud on the Internet

E-commerce fraud popped out with the rapid increase in
popularity of websites. It is a hot issue for both cyber and
click-and- mortar merchants. The swindlers are active mainly
in the area of stocks. The small investors are lured by the
promise of false profits by the stock promoters. Auctions are
also conductive to fraud, by both sellers and buyers. The
availability of e-mails and pop up ads has paved the way for
financial criminals to have access to many people. Other
areas of potential fraud include phantom business
opportunities and bogus investments.

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