1. COMP 6125 An Introduction to Electronic Commerce Session 4: B2B, B2C, C2C and B2G E- Commerce

2. B2B E-Commerce Typically takes the form of automated processes between businesses Also encompasses marketing activities between businesses; not just final transactions that result from marketing Approximately makes up 80% of e-commerce Has two primary components –E-frastructure –E-markets

3. E-frastructure Logistics –Transportation, warehousing, distribution Application Service Providers –Deployment, hosting and management of packaged software from central facility Outsourcing of functions in the process of e- commerce –Web-hosting, security and customer care solutions

4. E-frastructure Auctions solution software for efficient real- time auctioning on the Internet Content management software –Facilitates Web site content management and delivery Web-based commerce enablers

5. E-markets Web sites where buyers and sellers interact with each other and conduct transactions

6. B2C E-Commerce Business conducted online between customers and companies Involves the following: –Customers obtaining information about an organisation –Customers purchasing physical or information goods from the company –Receiving the products over an electronic network (if applicable)

7. Benefits of B2C E-Commerce Reduces transaction costs Increases consumer access to information Allows consumers to find most competitive price for a product or service Reduces market entry barriers as cost of putting up and maintaining a Web site is much cheaper than installing brick-and-mortar structure

8. Benefits of B2C E-Commerce Removes additional cost of a physical distribution network for information goods Increases feasibility of delivering information goods by those countries with a growing and robust Internet population

9. C2C E-Commerce Commerce between private individuals or consumers [Wikipedia.org] Characterized by growth of e-marketplaces and online auctions

10. Forms of C2C E-Commerce Online auctions facilitated at a portal –For example: eBay, Bajanbid.comeBayBajanbid.com Peer-to-peer systems –For example: Napster, Morpheus, bitTorrentbitTorrent Online classified ads at portals –For example: eWanted, Excite ClassifiedseWanted

11. Of Note – C2B Involves reverse auctions where consumer drives the transaction For example: A traveler posts the intention of flying from Miami to Boston. Competing airlines offers the traveler best travel and ticket pricing in response to her post

12. B2G E-Commerce Commerce between companies and the public sector Refers to the use of the Internet for public procurement (or e-procurement), licensing procedures, filing of tax forms, and other government-related operations Sometimes referred to as e-government

13. B2G E-Commerce The use of e-commerce by governments to improve the efficiency with which they undertake their support services and serve their stakeholder is on the rise Governments and government agencies are developing websites to better meet the needs of their stakeholders and to facilitate the dissemination of information

14. Features of B2G E-Commerce The public sector assumes a piloting or leading role in establishing e-commerce It is assumed that the public sector has the greatest need for making its procurement system more effective

15. Home Assignment Read Chapter 6, pg 263 - 300

16. Payment Options For E- Commerce Payment options should be safe, convenient and widely accepted Must integrate well with existing systems and practices Should not require customers to learn a new way of doing something that they were already comfortable doing

17. Current Payment Options Cash Checks Credit cards Debit cards Electronic transfer (includes automated payments)

18. “Newer” Payment Technologies Digital cash –Scrip: minted by a company and not a government; must be exchanged for goods or services by the issuing company; now used mainly by not-for-profit organisations Case Study: Flooz and Beenz, pg 496

19. Payment Technologies Payment cards Electronic cash Electronic wallets Stored-value cards

20. Payment Cards Credit card – Visa, Mastercard; have limit to spenditure based on credit history of user Debit card – direct removal from account of funds at time of purchase Charge card – no spending limit; entire amount charged is due at end of billing period; no interest charges Single-use cards – developed to address concern of security in providing payment card numbers online; unique card number valid for one transaction only

21. Advantages Of Payment Cards Fraud protection – authentication authorization using payment card processing network Built-in security for merchants of assurance that they will be paid by the issuing card company Limited liability is fraud does occur (mostly in US) Worldwide acceptance No special hardware or software required for use

22. Disadvantages Of Payment Cards Card companies charge per-transaction and monthly processing fees to businesses – cost of an online transaction can be 50% higher than offline transaction; price of goods are slightly higher as a result Consumers have to pay an annual fee (credit and charge cards mainly) Stores typically require minimum purchase value amounts Small payments not profitable

23. Electronic Cash Supposedly looking promising for the future Any value storage and exchange system created by a private, non-governmental organisation that does not use paper documents or cash Can serve as a substitute for physical currency issued by the government Can be readily exchanged for physical cash on demand

24. Advantages of E-Cash Small payments are more feasible (and more profitable for merchants), especially for sales $10 or less Most of the world’s population do not have credit cards; hence, makes online purchasing more available to them Authorization by one party in the transaction is not required

25. Disadvantages Of E-Cash No audit trail Money laundering Susceptible to forgery – less difficult than using a fraudulently obtained credit card number, however Not yet a global commercial success Multiple e-cash standards exist

26. Electronic Wallets Holds credit card numbers, e-cash, owner identification, owner contact information, shipping and billing information (multiple versions possible) Information provided at an e-commerce checkout counter Information is entered once, as opposed to re-entering for each e-commerce site Two types: –Server-side e-wallet –Client-side e-wallet

27. Server-side E-Wallets Wallet information stored on a remote server belonging to a specific merchant or wallet provider Issue: security breach exposes thousands of users’ information to unauthorized parties Typically use strong security measure that minimize possibility of this occurrence Must be enabled on the merchant site before a user can use the wallet

28. Client-side E-Wallets Stores information on user’s computer – removes risk associated with storing on remote server Wallet software required to be downloaded to user’s computer Not very portable – not available for use if you switch computers

29. Examples Of E-Wallets Microsoft.NET Passport Yahoo! Wallet

30. Stored-value Cards Elaborate smart card containing a microchip or magnetic strip that records currency balances Can store larger amounts of information Examples: –Magnetic strip cards (rechargeable) –Smart cards (better suited for Internet payments due to processing capability

31. Discussion Visit Payment Online at http://www.paymentonline.com http://www.paymentonline.com

32. Links Reference –Electronic Commerce, Seventh Annual Edition by Gary Schneider –Whatis.com, http://www.whatis.comhttp://www.whatis.com –Webopedia.com, http://www.webopedia.comhttp://www.webopedia.com –Wikipedia, http://www.wikipedia.org Of Interest –Onvia, http://www.onvia.comhttp://www.onvia.com –Dept. of Homeland Security, http://www.dhs.gov/http://www.dhs.gov/ –Payment Online, http://www.paymentonline.comhttp://www.paymentonline.com