Transcript COMP 6125 An Introduction to Electronic Commerce

COMP 6125 An
Introduction to
Electronic Commerce
Session 4: B2B, B2C,
C2C and B2G ECommerce
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
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 ecommerce
– Web-hosting, security and customer care solutions
E-frastructure
• Auctions solution software for efficient realtime auctioning on the Internet
• Content management software
– Facilitates Web site content management and
delivery
• Web-based commerce enablers
E-markets
• Web sites where buyers and sellers interact
with each other and conduct transactions
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)
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
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
C2C E-Commerce
• Commerce between private individuals or
consumers [Wikipedia.org]
• Characterized by growth of e-marketplaces
and online auctions
Forms of C2C E-Commerce
• Online auctions facilitated at a portal
– For example: eBay, Bajanbid.com
• Peer-to-peer systems
– For example: Napster, Morpheus, bitTorrent
• Online classified ads at portals
– For example: eWanted, Excite Classifieds
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
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
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
Features of B2G ECommerce
•
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
Home Assignment
• Read Chapter 6, pg 263 - 300
Payment Options For ECommerce
• 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
Current Payment Options
• Cash
• Checks
• Credit cards
• Debit cards
• Electronic transfer (includes automated
payments)
“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
Payment Technologies
• Payment cards
• Electronic cash
• Electronic wallets
• Stored-value cards
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
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
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
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
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
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
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
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
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
Examples Of E-Wallets
• Microsoft .NET Passport
• Yahoo! Wallet
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
Discussion
• Visit Payment Online at
http://www.paymentonline.com
Links
• Reference
– Electronic Commerce, Seventh Annual Edition by Gary
Schneider
– Whatis.com, http://www.whatis.com
– Webopedia.com, http://www.webopedia.com
– Wikipedia, http://www.wikipedia.org
• Of Interest
– Onvia, http://www.onvia.com
– Dept. of Homeland Security, http://www.dhs.gov/
– Payment Online, http://www.paymentonline.com