E-Commerce Basic
Business on the Net is booming, and just about everybody seems to be getting into the act. However, there does seem to be a lot of confusion surrounding electronic commerce, or e-Commerce, on the Net. To help clear up matters, we’ve asked–and answered– key questions about e-Commerce.
What is e-Commerce?
e-Commerce is buying and selling products and services online. It is fundamentally the same as regular commerce, that is, buying and selling. e-Commerce differs from ‘regular’ commerce only in that it uses computers to facilitate buying and selling products and services over the Internet, as well as new ways of selecting and buying those products and services.
Selling online
Setting up a shop on a website can be a new way to increase the scope of your market, opening up your business to potentially millions of people in Australia and throughout the world.
Online stores are particularly suited to small businesses operating in a niche market or offering well-defined products and services which can be set out in a catalogue. An online store contains three main components:
– A product list or catalogue with information, pictures and prices about all products offered.
– A shopping cart software
– An ordering and payment mechanism. Orders could be sent by basic email to you. Several methods of payment can be offered, the most usual being by credit card. You could also receive email orders while continuing to use traditional payment methods such as cheque payment.
How does an e-Commerce solution work?
Secure Socket Layer (SSL)
Both buying and selling via the Internet typically involve entering details of the product, quantity, price, delivery details and payment via a credit card being securely transmitted using a protocol called a Secure Socket Layer. When connected to a web server using one of these protocols, a gold lock icon will appear on the bottom right hand side of the browser status bar. The SSL protocol is designed for secure communication over the Internet by encrypting data transmissions, making it almost impossible for someone to interfere with electronic transmissions.
Steps in an e-Commerce Transaction
Typically, the following steps occur in an e-Commerce transaction:
– The customer enters their order into the site including their credit card details. The Shopping Cart software allows website visitors to store their shopping selections while browsing for further products, then check-out with total value of the purchase prior to entering an online payment capability.
– The order is encrypted with the credit card payment being processed by a Secure Payment Gateway.
– The Secure Payment Gateway is connected to a bank which verifies the credit card validity
– Upon receipt of the approval of the credit card from the bank, in real time the Secure Payment Gateway will approve and process the order.
– At the same time, an email is sent to the customer confirming order have been approved.
– Following internal fulfilment of the order, it is then despatched to the customer by courier or mail.
What you need to know to sell online?
To ensure that your online store delivers what your customers want and need, here is a list of issues to consider:
– Specify your online shop catalogue in detail product information, options like colour and size, pictures, price and other options.
– Purchase an shopping cart software package.
– Install and build your own online shop. Seek professional assistance if you need it.
– Enter each shop components, include the catalogues, products information into shopping cart system.
– If you wish to offer credit card payment, you will need to arrange to become an Internet merchant. You will need to talk to your bank or payment gateway providers to set up a secure payment account for you.
– Provide information of ordering and payment instructions, refunds, warranties and returns terms and contitions as well as privacy guidelines and security considerations etc.
– Be aware that many potential buyers worry about security and privacy when they buy online. Give this careful consideration and explain your security to your customers.
– Publish your shop to hosting server. Start receive onlne order.
– Track your customers and evaluat the latest buying trends, get customer feedback and continually monitor product quality and service standards.
Is e-Commerce safe?
Although Internet security breaches have gotten a lot of press, most vendors and analysts argue that transactions are actually less dangerous in cyberspace than in the physical world.
That’s because a great deal of credit card fraud is caused by retail sales employees who handle card numbers. e-Commerce systems remove temptation by encrypting the numbers on a company’s servers. For merchants, e-Commerce is actually safer than opening a store that could be looted, burned, or flooded. The difficulty is in getting customers to believe that e-Commerce is safe for them.
Consumers don’t really believe it yet, but experts say e-Commerce transactions are safer than ordinary credit card purchases. Every time you pay with a credit card at a store, in a restaurant, or over an 800 number–and every time you throw away a credit card receipt–you make yourself vulnerable to fraud.
But ever since the 2.0 versions of Netscape Navigator and Microsoft Internet Explorer, transactions can be encrypted using Secure Sockets Layer (SSL), a protocol that creates a secure connection to the server, protecting the information as it travels over the Internet. SSL uses public key encryption, one of the strongest encryption methods around. A way to tell that a Web site is secured by SSL is when the URL begins with https instead of http.
Browser makers and credit card companies are promoting an additional security standard called Secure Electronic Transactions (SET). SET encodes the credit card numbers that sit on vendors’ servers so that only banks and credit card companies can read the numbers.
No e-Commerce system can guarantee 100-percent protection for your credit card, but you’re less likely to get your pocket picked online than in a real store.
Are there any technology standards for e-Commerce?
The following list is some of standards that governs the Internet, e-Commerce employs several of its own standards, most of which apply to business-to-business transactions.
Electronic Data Interchange (EDI) : Created by the government in the early 1970s and now used by 95 percent of Fortune 1,000 companies, EDI is a common document structure designed to let large organizations transmit information over private networks. EDI is now finding a role on corporate Web sites as well.
Open Buying on the Internet (OBI) : This standard, created by the Internet Purchasing Roundtable, is supposed to ensure that all the different e-Commerce systems can talk to one another. OBI, which was released by the OBI Consortium, is backed by leading technology companies such as Actra, InteliSys, Microsoft, Open Market, and Oracle.
The Open Trading Protocol (OTP) : OTP is intended to standardize a variety of payment-related activities, including purchase agreements, receipts for purchases, and payments. It was created as a competing standard to OBI by a group of companies, including AT&T, CyberCash, Hitachi , IBM, Oracle, Sun Microsystems, and British Telecom.
The Open Profiling Standard (OPS) : A standard backed by Microsoft and Firefly, OPS lets users create a personal profile of preferences and interests that they want to share with merchants. The idea behind it is to help consumers protect their privacy without banning online collection of marketing information.
Secure Sockets Layer (SSL) : This protocol is designed to create a secure connection to the server. SSL uses public key encryption, one of the strongest encryption methods around, to protect data as it travels over the Internet. SSL was created by Netscape but has now been published in the public domain.
Secure Electronic Transactions (SET) : SET encodes the credit card numbers stored on merchants’ servers. This standard, created by Visa and MasterCard, enjoys wide support in the banking community. The first SET-enabled commerce is already being tested in Asia .
Truste : This partnership of companies seeks to build public trust in e-Commerce by putting a Good Housekeeping -style seal of approval on sites that don’t violate consumer privacy.
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