Home Guncel Konular Immigration Links Downloads Support E-Business Docs About Me What is E-Commerce? Most people think e-commerce means online shopping--workaholics pointing their browsers to Amazon.com to order an emergency present because they forgot someone's birthday again. But Web shopping is only a small part of the e-commerce picture. The term also refers to online stock and bond transactions and buying and downloading software without ever going near a store. In addition, e-commerce includes business-to-business connections that make purchasing easier for big corporations. And many people hope that so-called microtransactions will let people pay small amounts--a few cents or a few dollars--to access online content or games. As for the hottest areas of e-commerce, in terms of tangible goods sold via the Internet and other electronic means (such as interactive TV), Simba Information says the biggest sellers are computer products, consumer products, books and magazines, and music and entertainment products. The term "electronic commerce" has been used to describe all steps of the commercial process that are managed via computer. We prefer to use the term in a more limited scope, specifically referring to computerization of the selling process. In other words, advertising is not electronic commerce per se, though clearly it is important to commercial success. When doing business over the Internet first became possible, it was mainly restricted to electronic advertising and marketing, with users browsing on-line catalogs and purchasing goods and services via credit cards over the phone. Transfer of physically purchased goods is still handled via the U.S. mail or express mail services, since electronic transfer of matter is still exclusively the domain of science fiction writers. For the purposes of this paper, we will consider electronic commerce as the process of arranging transfer of goods or services, including arranging or performing payment and exchanging customer information. If you imagine this in terms of telephonebased mail order, the Internet electronic commerce role replaces the transactions that occur between the point at which the phone service agent answers the phone, and the phone service agent schedules the customer's product shipment and hangs up. During that time, the customer places an order including the desired items, their quantity, and a credit card or account number and shipping address. Internet electronic commerce attempts to automate this process wherever possible. From a security perspective, there are several important things to take into account during the customer transaction process, which apply to "real life" or telephone commerce as well as to electronic commerce: How do customers know they are dealing with a legitimate business? In "real life" a major store is difficult and expensive to fake. On the Internet it is not. Long-established businesses and their name recognition factors have a powerful market clout that newcomers do not. Does the electronic commerce revolution threaten this? In a sense it may no longer be a question of "how big you are" it may now be a matter of "how big you look". How does the business know it is dealing with a legitimate customer? In some transactions the merchant does not need or wish to know the identity of the customer. In the current market, customers who wish to remain anonymous can use cash or money orders instead of credit cards, and the merchant is protected by the relative difficulty of forging cash. When a customer wishes to pay by credit card, the approval process tries to verify the customer's identity by checking that the card is active, not overdrawn, that the holder knows the expiration date, and often that the shipping address matches the billing address. How does the business know it is dealing with a legitimate customer? In some transactions the merchant does not need or wish to know the identity of the customer. In the current market, customers who wish to remain anonymous can use cash or money orders instead of credit cards, and the merchant is protected by the relative difficulty of forging cash. When a customer wishes to pay by credit card, the approval process tries to verify the customer's identity by checking that the card is active, not overdrawn, that the holder knows the expiration date, and often that the shipping address matches the billing address. How does the customer arrange payment? In "real life" commerce there are a number of options for payment. Electronic commerce almost always assumes some kind of electronic identity (usually a credit card) that is exchanged as a promise to pay. Electronic cash technologies exist, but are less popular than credit card based systems, and are a concern to governments that fear anonymous transactions may make money laundering easy. How does the customer specify or change the address where goods are to be shipped? The shipping address for goods is often used to reduce credit card fraud by crossreferencing it with the credit card billing address. Electronic commerce systems that make it easy to change billing or shipping addresses may be vulnerable to attack by redirecting goods or invoices. What aspects of the transaction does the customer expect or the law require to be private? Many aspects of a transaction a customer may not wish disclosed. Home addresses and telephone numbers, for example, may be protected for the customer. Law may protect other transactions such as medical record lookups or bank balances, and an electronic merchant may liable for damages in the event of disclosure. What are the indemnifying factors that protect the merchant and the customer? Many Internet-based electronic commerce applications rely on credit cards for payment. As a result, the regulations limiting damages from credit card abuse may apply. It is unlikely that electronic commerce will enjoy wide market acceptance unless the extent of end-user and vendor liability is well understood by both parties.