1. E-Commerce
Banking Basics

2. What is it?
Buying and selling of products or services over electronic systems such as the Internet and other computer networks (Intranet).
It’s more than just online shopping

3. E-Commerce?
E-Commerce is sharing business information, maintaining business relationships and conducting business transaction by means of telecommunications network
It is conducting the exchange of information using a combination of structures and unstructured messages across the entire range of networking technologies
The Internet’s WWW has been the prime driver of contemporary E-commerce
E-commerce enables organizations of all sizes and in all market sectors to improve their competitiveness

4. Traditional Vs. Electronic
Traditional commerce:
Firms engages in many other activities in addition to buying and selling their product
Traditional commerce include: buyers and sellers using old fashion method to do business
Electronic Commerce:
Firms has used various electronic communications tools to conduct different kinds of business transactions.
Electronic Commerce use technology to moves people around the world

5. Applications Supply chain management Video on demand Remote banking
Procurement and purchasing
Online marketing and advertisement
Home shopping
Auctions

6. Examples of E-commerce
ATM
Selling physical goods using websites (example: clothes, shoes, flowers, electronics, etc)
Reserving a hotel room, flight, rental car

7. In-Frastructure Information superhighway infrastructure
Internet, LAN, WAN, routers, etc.
telecom, cable TV, wireless, etc.
Messaging and information distribution infrastructure
HTML, XML, , HTTP, etc.
Common business infrastructure
Security, authentication, electronic payment, directories, catalogs, etc.

8. Main Areas of E-Commerce
Business to Business (B2B)
Transactions conduced between businesses on the web
Business to Consumer (B2C)
Consumer shopping on the web
Business to Government/Government to Business (B2G/G2B)
Consumer to Business (C2B)

9. B2B (Business to Business)
Companies doing business with each other such as manufacturers selling to distributors and wholesalers selling to retailers.
Pricing is based on quantity of order and is often negotiable.

10. C2B (Consumer to Business)
A consumer posts his project with a set budget online and within hours companies review the consumer’s requirements and bid on the project
The consumer review’s the bids and chooses the company that will do the project

11. C2C (Consumer to Consumer)
There are many sites offering free classifieds, auctions, and forums where individuals can buy and sell
PayPal: people can send and receive money

12. B2C (Business to Consumer)
Businesses selling to the general public through catalogues utilizing shopping cart software.
By dollar amount, B2B wins, however B2C is what the average consumer has in mind when it comes to e-commerce

13. Advantages Increase sales and decrease sales costs
A small firm's promotional message out to potential customers in every country in the world with good ad
Reach narrow market segments that are geographically scattered
Increases sales opportunities for seller, it also increases purchasing opportunities for the buyers
Businesses can identify new suppliers and business partners
Provides buyers with a wide range of choices than traditional commerce

14. Advantages Increased sales Decreased costs Being in the space
Reach narrow market segments in geographically dispersed locations
Create virtual communities
Decreased costs
Handling of sales inquiries
Providing price quotes
Determining product availability
Being in the space

15. Benefits
The market for a Web based is not bound by any geographical constraints
The transaction cost go down tremendously in a well set up site
Better, more inviting, convenient and comprehensive presentation of goods is conducive to greater sales
Small and large firms alike have the opportunity to set-up and conduct business on the internet.
An inexpensive advertising medium for organizations, it allows organizations an opportunity for publicizing their products and services at minimal cost.

16. Importance of E-Commerce
Decrease in cost of ordering and supply
Better contact between customer and supplier
Exploration of new markets (rural customers can buy global products)
Easy to use and customer friendly

17. Benefit Society
Electronic payments of tax refund, public retirement, and welfare support cost less to issue and arrive securely and quickly when transmitted over the Internet
Electronic payments can be easier to audit and monitor than payments made by check, providing protection against fraud and theft losses
Electronic commerce enables people to work form home

18. Disadvantages
Many products and services require that a critical mass of potential buyers be equipped and willing to buy through the Internet.
Costs and benefits have been hard to quantify
Many firms have had trouble recruiting and retaining employees with the technological, design, and business process skills needed to create an effective electronic commerce
Firms also have difficulty of integrating existing database and transaction-processing software designed for traditional commerce into the software that enables electronic commerce
Firms also face cultural and legal obstacles to conducting electronic commerce

19. Disadvantages
Loss of ability to inspect products from remote locations
Rapid developing pace of underlying technologies
Difficult to calculate return on investment
Cultural and legal impediments

20. Barriers Access and Connectivity Authentication and Standardization
Cyber Laws
Technology

21. Risks Business practices Information protection Transaction Integrity
Privacy and Trust
Global Efforts Towards Retaining Privacy & Building Trust
Web Trust
TRUSTe
P3P (Privacy Preferences Project)

22. E-Commerce risks Customer's risks Stolen credentials or password
Dishonest merchant
Disputes over transaction
Inappropriate use of transaction details
Merchant’s risk
Forged or copied instruments
Disputed charges
Insufficient funds in customer’s account
Unauthorized redistribution of purchased items
Main issue: Secure payment scheme

23. Process of E-Commerce Attract customers Interact with customers
Advertising, marketing
Interact with customers
Catalog, negotiation
Handle and manage orders
Order capture
Payment
Transaction
Fulfillment (physical good, service good, digital good)
React to customer inquiries
Customer service
Order tracking

24. Infrastructure for E-Commerce
The Internet
system of interconnected networks that spans the globe
routers, TCP/IP, firewalls, network infrastructure, network protocols
The World Wide Web (WWW)
part of the Internet and allows users to share information with an easy-to-use interface
Web browsers, web servers, HTTP, HTML
Web architecture
Client/server model
N-tier architecture; e.g., web servers, application servers, database servers, scalability

25. E-commerce Timeline 1970s: Electronic Funds Transfer (EFT)
Used by the banking industry to exchange account information over secured networks
Late 1970s and early 1980s: Electronic Data Interchange (EDI) for e-commerce within companies
Used by businesses to transmit data from one business to another
1990: Tim Berners-Lee writes the first web browser,
Worldwide Web
1994: Pizza Hut offers pizza ordering on its Website
First online bank opens
Attempts were made to offer flower delivery and
magazine subscriptions online.
1995: Jeff Bezos launches Amazon.com
eBay is founded
1998: Electronic postal stamps can be purchased online

26. Promise & Threat Impact and Issues of Electronic Commerce
The business, societal, and research problematic of E-commerce spans an immense range, which reflects the depth of change being caused by this rapidly expanding mode of doing business.
Limitations and Asymmetries of Infrastructure
The infrastructure of the Internet, which acts as the current global information infrastructure, has acknowledged problems.
The issues turn on the provision of sufficient band width for the surging use that is also moving to multimedia transmissions, and on the problems fostered by the decentralized nature of the Internet.

27. Statistics

28. Statistics

29. Statistics U.S. e-commerce sales totaled $165.4 billion in 2010
up 14.8% from $144.1 billion 2009
4.2% of total retail spending took place online during 2010
up from 3.9% in 2009
Source: U.S. Commerce Department

30. Statistics
e-commerce accounted for 7.6% of total retail sales during 2010
up from 7.0% in 2009
Total retail sales, which includes e-commerce sales, increased 7.0% in 2010
totaling $3.92 trillion
Source: InternetRetailer

31. Payment Systems Role of payment Cash
properties: wide accept, convenient, anonymity, untraceable, no buyer transaction cost
Online credit card payment, Smart Cards
Secure protocols: SSL, SET
Internet payment systems
Electronic cash, digital wallets
Micro-payments
Wireless devices

32. How does echeck work? Exactly same way as paper
Check writer "writes" the echeck using one of many types of electronic devices
”Gives" the echeck to the payee electronically.
Payee "deposits" echeck, receives credit,
Payee's bank "clears" the echeck to the paying bank.
Paying bank validates the echeck and "charges" the check writer's account for the check.