e-Commerce, Business Methods and Evaluation of Payment
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Transcript e-Commerce, Business Methods and Evaluation of Payment
Author: Michael Adeyeye
Department of Electrical and Information
Engineering, Covenant University, Ota, Nigeria
Presented by: Merlene Headley & Rudi McClean
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Our
presentation is a summary of the paper
written by Michael Adeyeye. His paper seeks
to identify different levels of ecommerce in
Nigeria among consumers and businesses. It
also evaluates a case study of citizens
involvement to identify the best payment
solution in ecommerce. We will then provide
an evaluation of this paper.
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Definition
of e-commerce
Integration of communications, data
management and security capabilities allows
businesses to exchange information on goods
and services
Act of conducting transactions via electronic
medium
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Nigeria
- a developing nation emerging in the
ecommerce market, tapped into the use of m
commerce using mobile devices
High risk security issues – need to handle
authentication and non repudiation
Note that authentication, confidentiality and
trust are driving force ensuring ecommerce is
safe
Use of digital signature for authentication and
digital signature verification for non repudiation
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Major
business models are B2B and B2C
Requirements to conduct ecommerce on the
internet:
Online merchant account, payment gateway and
mail or web host account and servers
Web hosting solutions – dependent on cost
In house all requirements is controlled by investor
Instant web front most requirements are outsourced
Nigeria mainly use instant solutions
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Main
payment methods:
Digital Cash
Digital wallet which is a plug in to web browsers
houses receipts and invoices for payments as well as
cash which is withdrawn to complete online
transactions
Main advantage - does not need personal details of
buyer
Payment is immediate
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Credit Cards
The card holder has a revolving credit line which can
be used for both traditional and e commerce.
Card has a specified limit where purchases and cash
advances are made up to that limit.
Settlement can be in full within a specified period or
minimum payment by an expected date
main advantage – available cash when needed
Main disadvantage – high charges applied
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Online check/ Electronic Transfer
When using online check, digits are entered during
the transaction process
Electronic transfer involves a financial clearing house
- transfer funds from the originator to receiver
Debit Card
Debit card holder access their own funds from their
financial institution, purchases totals deducted
Use debit card payment processing facility
Can only spend what you have, cash payment is
immediate
Less charges apply
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Micropayment
Allows vendors to sell over the internet at unit
prices
Can have amounts as low as one cent
Money
Orders
Uses third party to send payment to the receiver
Western union, American express etc
Small cost to process order
Transaction is protected
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Electronic
banking
Also known as e banking – Banking services
conducted using electronic medium. Include
withdrawals , fund transfer, check balances
Virtual Private network (VPN) to connect to
other branches
Branches also connected using VSAT - very small
aperture terminal; a satellite communication
system
Extranet - use internet technologies to share
information with its customer uses for data
encryption
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Internet
banking
Intranet - Internal to the bank where staff has
access to required information both customer
and operational related
Telephone
banking
One branch call another where an account is
domicile to confirm validity of an account.
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Mobile
banking
Advent of global system for mobile
telecommunication banks conduct business using
this medium
Phone number becomes bank account number
Transfer funds to other phone accounts
Transact e products like phone top ups etc
Automated
Telling Machine (ATM)
Situated in stores and hotels where access to
quick cash, make deposits
self service operation
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Web
merchants
Conduct business via their websites purchases for
goods and services
Prepaid services. E.g. a prepaid card to buy
amount of purchases online; also direct payment
to seller’s bank consider online method, proof of
payment is required
Other prepaid card services home entertainment
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Payment
gateway providers
Possess card information used online or at point
of sale (POS) terminals
Act as an interface to the banking system
Interswitch (Nigeria)
Caribbean Integrated Financial Service Inc. or CarIFS
(Barbados & Caribbean)
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Copies of the same questionnaire was
distributed to about 1/5 of the population of
approximately 6750 members of a tertiary
institution in the suburb of Lagos-State,
Nigeria. This 1/5 was made up of students,
non-academic staff, semi-skilled workers and
academic staff.
Daily newspapers, articles and face-toface conversation with staff of some of the
banks, e-commerce service providers were
also used in Mr. Adeyeye’s research.
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Sample
of multiple choice questions used to
determine the extent of participation of
Nigerians in e-commerce:
Do you conduct transactions on the internet?
If yes, what payment method do you use?
What is your job description?
What is your computer competence level?
Should you want to make a purchase online,
what payment method would you prefer.
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About
84% of the sample does not conduct
transactions on the internet even though
they are computer literate (Table 2.0)
The 16% that engage in e-commerce do so
through direct payments, credit cards and
prepaid cards to settle bills
Of that 16% that engages in ecommerce:
65% use prepaid cards, mostly to check
examination results online, buy airtime or renew
subscriptions
25% use credit cards to make transactions
(mostly from foreign websites)
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The
most preferred method is the prepaid
card system, with 43% of persons choosing it
due to its ease of acquisition and use.
27% preferred direct payment to seller’s
account
18% chose the credit card system as their
preferred method
3% of those sampled didn’t state their
preferred payment method (could be an
indication that they aren’t aware of ecommerce at this present age)
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Regarding
e-commerce, Nigeria has been
rated as the highest risk country across the
globe followed by Indonesia (Cybersource
2005).
To date, many orders from Nigeria are NOT
processed due to the above
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It was indicated that the most appropriate
payment methods for use in Nigeria are
prepaid/debit card system and direct payment
to seller’s accounts.
The debit and prepaid card methods both ensure
that the customer has sufficient funds in his/her
account or by buying a card respectively.
Direct payment was chosen by many since there
is a reduced risk in terms of fraud
A standard e-commerce system in Nigeria should
be set up to ensure that banks with different
proprietary technologies can still connect to
each other.
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Paper
was well written, except for a few
grammatical errors which made meanings a
bit hard to understand
Most of Nigeria’s payment methods can be
applied here in Barbados and the Caribbean
also
It would be nice to see biometric payment
implemented here in Barbados
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Difference
in services when compare locally:
Internet banking – term definition
Mobile banking – use of phone number for
account number
Telephone banking – term definition.
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