ELECTRONIC COMMERCE:

definition:
" e-commerce (electronic commerce or ec) is the buying and selling of goods and
services on the internet, especially the world wide web. in practice, this term and a
newer term, e-business, are often used interchangeably. for online retail selling, the term
e-tailing is sometimes used"

"a system used to conduct business transactions of buying and selling goods and
services over a computer network".
ec, e-commerce or ecommerce consists primarily of the distributing, buying, selling,
marketing, and servicing of products or services over electronic systems such as the
internet and other computer networks. the information technology industry might see it as
an electronic business application aimed at commercial transactions. it can involve
electronic funds transfer, supply chain management, e-marketing, online marketing,
online transaction processing, electronic data interchange (edi), automated inventory
management systems, and automated data collection systems. it typically uses electronic
communications technology such as the internet, extranets, e-mail, e-books, databases,
and mobile phones.

overview of electronic commerce:

the meaning of the term "electronic commerce" has changed over time. originally,
"electronic commerce" meant the facilitation of commercial transactions electronically,
usually using technology like electronic data interchange (edi, introduced in the late
1970s) to send commercial documents like purchase orders or invoices electronically.

electronic commerce is doing business online.it is about to using the powerof digital
information to understand the needs and preference of each customer and each partner to
customize products and services for them and deliver the products as quickly as possible.
later it came to include activities more precisely termed "web commerce" -- the purchase
of goods and services over the world wide web via secure servers https, a special server
protocol which encrypts confidential ordering data for customer protection) with e-
shopping carts and with electronic pay services, like credit card payment
authorizations.e-commerce impacts on service and network operations and management"
is to allow architects and business managers to understand how e-business technologies
and products should be best applied to their operations support systems (oss) to serve
their b2b and communications supply chain needs through the implementation of an e2-
oss framework.

although a large number of "pure e-commerce" companies disappeared during the dot-
com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such
companies had identified valuable niche markets and began to add e-commerce
capabilities to their web sites. for example, after the collapse of online grocer webvan,
two traditional supermarket chains, albertsons and safeway, both started e-commerce
subsidiaries through which consumers could order groceries online.

as of 2005, e-commerce has become well-established in major cities across much of north
america, western europe, and certain east asian countries like south korea. however, e-
commerce is still emerging slowly in some industrialized countries, and is practically
nonexistent in many third world countries.

electronic commerce has unlimited potential for both developed and developing nations,
offering lucrative profits in a highly unregulated environment.

introduction:
e-commerce refers to all forms of business activities conducted across the internet. this
can include e-tailing, b2b, intranets and extranets, online advertising (e.g.. advertising
banners), and simply online presences of any form that are used for some type of
communication (customer service for example). e-commerce has several advantages and
disadvantages at present.

some of its advantages include larger markets, no taxes, no dealing with traffic on the
road or rude sales men, wide range to explore before buying or selling.for sellers, e-
commerce offers a way to cut costs and expand their markets. they do not need to build,
staff, or maintain a store or print and distribute mail order catalogs. automated order
tracking and billing systems cut additional labor costs, and if the product or service can
be downloaded, e-commerce firms have no distribution costs. because they sell over the
global internet, sellers have the potential to market their products or services globally and
are not limited by the physical location of a store.

on the other hand, some of its disadvantages are that you can’t “feel” the product before
buying, there is a question of security and a question of reliability on the buyer/seller. this
being said, there are a lot of deeper issues affecting e-commerce at present that might be
preventing it from growing.commerce also has some disadvantages, however. consumers
are reluctant to buy some products online. online furniture businesses, for example, have
failed for the most part because customers want to test the comfort of an expensive item
such as a sofa before they purchase it. many people also consider shopping a social
experience. for instance, they may enjoy going to a store or a shopping mall with friends
or family, an experience that they cannot duplicate online. consumers also need to be
reassured that credit card transactions are secure and that their privacy is respected.

for example, all online stores at present are struggling to build their return policies such
that it doesnt drive customers away., 85% of online customer agree that the inability to
receive credit on a credit or debit card, might refrain a customer from shopping online
secondly, some aspects of e-commerce attract a lot of people to shop online

. for example, online customer service has proven to be very appealing to customers. and
finally, some ground-breaking technologies have been developed such as verifi, digiscent
and touchsense that have some really exciting capabilities. these technologies will be
explained in the fourth paragraph.

e-commerce has grown rapidly over the past couple of years. in 1998, e-commerce
contributed $18 billion to the economy, whereas in 2002, this number grew to $294
billion (http://mason.gmu.edueven though e-commerce is growing rapidly, it is still in its
childhood, like the internet once was, and a lot of obstacles need to be overcome and a lot
of advancements made before e-commerce can be as widespread and as successful as the
internet.

success factors in e-commerce:

technical and organizational aspects

in many cases, an e-commerce company will survive not only based on its product, but
by having a well-organized business structure and a secure, well-designed website. such
factors include:

• providing an easy and secure way for customers to order. credit cards are the
most popular means of sending payments on the internet, accounting for 90%
of online purchases. card numbers are transferred securely between the
customer and merchant through independent payment gateways.

• providing reliability and security. parallel servers, hardware redundancy, fail-

safe technology, information encryption, and firewalls can enhance this
requirement.

• providing a 360-degree view of the customer relationship, defined as ensuring

that all employees, suppliers, and partners have a complete view, and the same
view, of the customer. however, customers may not appreciate the big brother
experience.

• constructing a commercially sound business model. if this key success factor

had appeared in textbooks in 2000, many of the dot-coms might not have gone
into bankruptcy.

• operating on or near the cutting edge of technology and staying there as

technology changes (but remembering that the fundamentals of commerce
 remain indifferent to technology).

• setting up an organization of sufficient alertness and agility to respond quickly

to any changes in the economic, social and physical environment.

• providing an attractive website. the tasteful use of colour, graphics, animation,

photographs, fonts, and white-space percentage may aid success in this
respect.

• streamlining business processes, possibly through re-engineering and

information technologies.

naturally, the e-commerce vendor must also perform such mundane tasks as being
truthful about its product and its availability, shipping reliably, and handling complaints
promptly and effectively. a unique property of the internet environment is that individual
customers have access to far more information about the seller than they would find in a
brick-and-mortar situation.

present aspects of e-commerce:

e-business is the transformation of key business processes through the use of internet
technologies.

the web is changing every aspect of our lives, but no area is undergoing as rapid and
significant change as the way businesses operate. as businesses incorporate internet
technology into their core business processes they start to achieve real business value.
today, companies large and small are using the web to communicate with their partners,
to connect with their back-end data-systems, and to transact commerce. this is e-business
-- where the strength and reliability of traditional information technology meet the
internet.

this new web + it paradigm merges the standards, simplicity and connectivity of the
internet with the core processes that are the foundation of business. the new killer
applications are interactive, transaction intensive, and allow people do business in more
meaningful ways.
an e-business is a company that can adapt to constant and continual change. to manage
transitions smoothly you have to remember two important ideas:

• start simple, but plan to grow fast

• build on what you have

e-business isn't about re-inventing your business. it's about streamlining your current
business processes to improve operating efficiencies which in turn will strengthen the
value you provide to your customers -- value that cannot be generated by any other
means, and value that will give you a serious advantage over your competition.

there are four important areas or stages in this process. we think of these four stages
collectively as the e-business cycle. they are:

• transforming core business processes

• building flexible, expandable e-business applications

• running a scalable, available, safe environment

• leveraging knowledge and information you've gained through e-business

systems

there isn't a set order or hierarchy to this cycle. successful e-businesses start at different
points and you can too. but first you must identify which of your core business processes
are most suitable for, or most in need of, conversion to e-business.

future aspects of e-commerce:

electronic commerce is growing rapidly and many merchants are asking themselves how
they can benefit from this new technology.electronic commerce over the internet is
predicted to grow at an ever-increasing rate over the next few years, with on-line sales
already heading for several billion. many companies are using this new sales channel, and
a few retailers now have established major on-line sales sites. there have been some
successes, particularly in technology, business-to-business and niche markets.internet
sales and transactions in the retail and services sectors increased significantly from 1999
to 2002. according to the united states bureau of the census, retail e-commerce sales
increased from $15 billion in 1999 to $44 billion in 2002. the census bureau noted that in
2002 retail e-commerce sales represented only 1.5 percent of total retail sales. however,
studies have shown that e-commerce has become very significant in certain product
categories. for example, in 2002, 32 percent of computer hardware and software sales
were transacted online, 17 percent of ticket sales were done over the internet, and 12
percent of book sales were completed electronically, according to a study by the national
retail federation and forrester research.

perhaps the clearest indication of the growing importance of e-commerce in the global
economy is the rapidity with which internet use has grown and spread during the last
decade. the boom in e-commerce also includes increased use of other media for trade,
such as the telephone, television, fax, and electronic payment. because e-commerce
became such an integral part of the global economy, the wto has begun to consider how it
fits into the multilateral trade framework, and what rules or regulations should apply.

the impact of e-commerce, particularly in business to business (b2b) transactions,

continues to grow. customers increasingly expect to be able to deal with suppliers
electronically as a matter of course. growing numbers of businesses are looking at ways
to enhance their operations through the use of electronic technology. this is despite the
dotcom crash, which has had the positive effect of allaying the hype surrounding e-
commerce, particularly online retailing (or e-tailing).

it is important to recognise that the internet, e-commerce and the demands of a

knowledge economy are raising the bar of economic participation for everyone across the
economy
E-BANKING:

"electronic banking is an umbrella term for the process by which a customer may
perform banking transactions electronically without visiting a brick-and-mortar
institution".

electronic banking is the delivery of banking services through the use of electronic
communication, primarily the internet.

you may also see or hear e-banking called internet banking, on-line banking or pc
banking. e-banking may include atms, wire transfers, telephone banking, electronic funds
transfers and debit cards.

safeguarding the privacy of personal confidential information and security can be

concerns with e-banking services. many government organizations offer publications and
other materials related to e-banking and the internet, including privacy and security.

the following terms all refer to one form or another of electronic banking: personal
computer (pc) banking, internet banking, virtual banking, online banking, home banking,
remote electronic banking, and phone banking. pc banking and internet or online banking
are the most frequently used designations. it should be noted, however, that the terms
used to describe the various types of electronic banking are often used interchangeably.

overview of e-banking:
internet banks offer many of the same services as do traditional brick-and-mortar banks,
analysts view internet banking as a means of retaining increasingly sophisticated
customers, of developing a new customer base, and of capturing a greater share of
depositor assets. a typical internet bank site specifies the types of transactions offered and
provides information about account security.
because internet banks generally have lower operational and transactional costs than do
traditional brick-and-mortar banks, they are often able to offer low-cost checking and
high-yield certificates of deposit. internet banking is not limited to a physical site; some
internet banks exist without physical branches, for example, telebank (arlington, virginia)
and banknet (uk). further, in some cases, web banks are not restricted to conducting
transactions within national borders and have the ability to make transactions involving
large amounts of assets instantaneously. according to industry analysts, electronic
banking provides a variety of attractive possibilities for remote account access, including:

• availability of inquiry and transaction services around the clock;

• worldwide connectivity;

• easy access to transaction data, both recent and historical; and

• direct customer control of international movement of funds without

intermediation of financial institutions in customer’s jurisdiction

introduction of e-banking:
on-line banking is a service provided by many banks, thrifts, and credit unions that allows
you to conduct banking transactions over the internet using a personal computer, mobile
telephone, or handheld computer (such as a "personal digital assistant"). it helps in:

• access accounts round-the-clock, even on weekends

• see balances on-line and find out whether checks or deposits have cleared

• transfer funds between accounts

• download information directly into personal finance software

• receive and pay bills on-line (without check writing, envelopes, or stamps)
on-line banking can help you manage savings and checking accounts, apply for loans, or
pay bills quickly and easily. to enjoy the full benefits of on-line banking, you should
understand all that on-line banking can offer, consider some questions to ask before
signing up, and know how to get help if you need it.

present aspects of e-banking:

five years from now, majority of the transactional services will be provided by way of
internet. net-based banking comes at only 10 percent of the operating costs of
conventional banking practices and services. as banks are going to play a key role in it
enabled public services involving electronic money transactions we feel that cooperative
banks should consider net-banking in a big way. [mit 2001]. a cost comparison study
done by ibm global services consulting group clearly shows the advantage of using
internet as medium for banking services over other traditional mediums (fig 1). as per the
recent survey, traditional banks spend 60% of the revenue generated to run a branch.
whereas, the cost of providing same services via internet comes out to be only 15%. this
is a huge savings for banks and consumer. definitely the consumer is the principal
beneficiary of the internet banking. he will be access the same services with more
efficiency at low cost. e banking will have two-fold effect, first, it will reach the remote
consumer and second it will create the awareness among consumer about benefits of
investment in different financial products. investment in-turns boost the financial markets
and economy. a research shows that a large urban population use internet for gathering
information about different financial products like personal loan, credit card, insurance
etc., thus reducing cost of printing, promotion and distribution

future aspects:
e-banking will improve customer relationships and therefore banks will experience
greater retention. as a result of a more satisfied customer base and the added ability to
reach customers in new geographic markets, banks will win new customers. finally,
banks will see an increase in the cross-selling of their products. all of these opportunities
will result in more assets and higher balances per customer. as revenues grow and costs
decline, banks will definitely see the benefits in the bottom line.

imagine a day when a customer, while driving in his car in china on a business trip, can
pick up his mobile phone or plug in his handheld personal computing device and
complete all of his banking transactions in just a few minutes. he/she can move money
from one account to another, review the status of all of his/her accounts, or open up a new
account or even a new insurance policy. the range of services that can be offered is not
only diverse and secure, but also more personal. the future technology roadmap for the
banking industry includes acceptance, enhancement, and expansion in the field of e-
commerce. internet speed and information will undoubtedly fuel the continued growth of
internet-friendly households. in addition, continued widespread wireless access and
stronger privacy protection will turn current customers into more regular users, and will
also increase the number of new online banking customers. these advances in technology,
coupled with the explosive growth of the internet, will create a more demanding
customer. banks that embrace the challenge and keep their focus on business
development and growth as the primary goal, with new technology as the means, will no
doubt survive in the future. it seems that digital-age darwinism is here with a vengeance,
and financial institutions that wait too long to integrate these communication channels
into their e-commerce strategies are going to find themselves wondering what happened
to their customers and will ultimately miss the wave of the future.

with the development of asynchronous technologies and secured electronic transaction

technologies, more banks and departments are using internet for transactional and
information medium. users of e-banking can perform common banking tasks such as
writing checks, paying bills, transferring funds, printing statements & balance inquiry etc.
internet banking has evolved into 'one stop service and information unit' that promises
great benefits to all i.e. banks, consumers, citizens, employees and government. e banking
is poised to become most promising partner in egovernance process. initiatives such as
'eseva' and 'fsc's' are the milestones towards achieving comprehensive egovernance.

finally, banks need to implement technology that integrates front- and back-end systems.
it is becoming evident that “more banks are starting to demonstrate the desire, capability,
and strategic drive that will be required to win the e-banking race”