Download - e-Commerce Transaction
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e-Commerce Transaction
Coky Fauzi Alfi
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Definition
Commerce : “The activity of buying and selling, especially on a large scale” (New Oxford Dictionary of English)
e-Commerce : “The trading of goods and services conducted using the Internet and other electronics media”
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e-Commerce versus Commerce
Compare Marketspace
E-Commerce The Internet or other electronics media
Commerce A physical area
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Steps
1. Identify suppliers
2. Compare and select products or services
3. Make purchase commitments
4. Complete financial transactions
5. Obtain service
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Principles
1. Transparency
2. Reliability
3. Confidentiality and privacy
4. Respect of the intellectual property rights
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History
• 1960, businesses were using primitive computer networks to conduct electronic transactions called Electronic Data Interchange (EDI)
• 1982, Transmission Control Protocol and Internet Protocol (TCP/IP)
• 1990, HTML• 1992-1994, Mosaic and Netscape• 1995, Amazon.com goes live. First Virtual and
CyberCash go live too.
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EDI and EFT
• Electronic Data Interchange, EDI : The exchange, using electronic media, of standardized business documents such as purchase orders and invoices between buyers and sellers
• Electronic Funds Transfer, EFT : An aspect of the electronic payment mechanism involving transfer of funds from the bank of a buyer to a seller
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Private Network
Enterprise A
MiddlewareTranslatorTranslator
MiddlewareTranslatorTranslator
Enterprise B
EDI standard documents
EDI Diagram
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Levels of e-Commerce Sophistication
Level Characteristics
Primitive Static web pages or ‘brochure ware’
Searchable site with dynamic pages such as an online catalogue
Integration with operational databases, e.g. inventory searching, package tracking, job postings
Customer transaction through the Internet, e.g. selling products and services, buying and selling shares, applying for loans
Advanced Full electronic commerce (i.e. integrated fulfillment cycle of ordering, shipping, billing)
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The Reasons for Implementing e-Commerce
• A Customer’s standpoint:– Increase in demand for choice (product depth, global
reach, price choices)– Demand for information (detailed product information,
inventory, order status)– Demand for interactive, online support– Avoidance of travel and parking difficulties for
consumer e-commerce– Elimination of time constraints (that is, opening hours
or delays between placing an order and delivery)
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The Reasons for Implementing e-Commerce
• A business customer’s standpoint:– Lower purchasing overhead – especially for small
value and repeat orders– Greater choice (greater product depth and global
reach)– Faster fulfillment cycle time (ordering, shipping,
billing)– Greater ability to supply information (inventory, order
status, etc)– Lower cost than EDI
Exp. Dell Computers
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The Reasons for Implementing e-Commerce
• A supplier’s standpoint:– A global reach, leading to more orders– Reduced administration overhead– Integration between back office and online ‘shopping’
activities– Integration of online ‘shopping’ activities with
database marketing– Less need for distribution via channel
– Reduced working capital (inventory)
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Inhibitors to E-Commerce
• Technophobia• Security fears• Technology not user friendly• Poor performance leading to slow download• Inertia of habitual conventional shopping and
purchasing• Internet access still limited
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Types of E-Commerce
• Business-to-Business (B2B). Exp. Wal-Mart, Warner-Lambert
• Business-to-Customer (B2C). Exp. Dell, Compaq, Cisco• Consumer-to-Consumer (C2C). Exp. eBay. COM• Consumer-to-business (C2B)• Business-to-Employee (B2E) • Nonbusiness e–Commerce. Exp. Social Security Online
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e-Commerce Models
• Brokerage Model– Brokers bring buyers and sellers together to make
transactions happen– They charge a fee or commission for the service
(account or transaction-based)– Exp. e-Tendering.com
• Advertising Model– Acts as an extension of the traditional media
broadcast model.– Exp. Google
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e-Commerce Models
• Infomediary Model– Assist buyers and/or sellers understand a market, its
products and prices by gathering related data– Exp. Nielsen/NetRatings
• Merchant Model– Wholesalers and retailers of goods and services.
Sales rely on price lists, and sometimes on auctions– Exp. Mondo Online Store
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Payment System Requirements
• Be secure (achieving privacy, authentication, integrity and non-repudiability)
• Be easy for buyer and seller to use and understand
• Be straightforward for banks to administer• Be scalable across different currencies and to
different denominations• Have low costs for implementing transactions
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Types of Payment Systems
• Consumer Payment Systems
1.Non-credit or pre-paid systems– Digital, virtual or electronic cash (e-cash). Exp. CyberCash– Microtransaction or Micropayment. Exp. ECoin– Debit cards. Exp. Debit card from Bank Austria– Smartcards. Exp. Visa Cash
2.Post-paid or credit-based systems– Digital/electronic cheques. Exp. Cheques from BankNet– Credit card. Exp. Visa, Mastercard
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Types of Payment Systems
• Business Payment Systems– Open Buying on the Internet (OBI)– The Open Trading Protocol (OTP)– Internet-based EDI
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Security System Issues
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Security System Requirements
• Authentication
• Privacy and confidentiality
• Integrity
• Non-repudiability
• Availability
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Methods of Security System
• Encryption1. Secret-key (symmetric) encryption
2. Public-key (asymmetric) encryption
• Digital signature
• Secure Electronic Transaction (SET)
• Firewalls
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Secret-key Encryption
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Public-key Encryption
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End