E - COMMERCE

MODULE 1: E-COMMERCE & ITS TECHNOLOGICAL ASPECTS

E – COMMERCE

E-commerce is the process of buying and selling tangible products and services online. It involves more
than one party along with the exchange of data or currency to process a transaction.

SCOPE IN E-COMMERCE

1. Exchange of digitized information:

The digitized information exchange can represent
communications between two parties, coordination of the flow of goods and service, or
transmission of electronic orders. This exchange can be between organizations or individuals.

2. Technology-enabled:
E-Commerce is about technology-enabled transactions. Web browsers are
perhaps the best Know of these technology-enabled customer interfaces. However, other
interfaces including automated teller machines (ATMs) also fall in the general category of e-
commerce.

3. Customer’s retention:
E-Commerce enables organizations to get classified and customized market
information that helps in retaining customers through fast order fulfilment and effective
customers relationship management (CRM).

4. Accounting:
Financial accounting, treasury management and asset management are best possible
in e-commerce because of integrated database. Financial planning and strategy determination
become more convenient in e-commerce.

5. Support the exchange:

E-Commerce includes intra and interorganizational activities that support
the exchange. The scope of e-commerce includes all electronically based intra and
interorganizational activities that directly or indirectly support marketplace exchange.

FEATURES OF E – COMMERCE

Online Transactions: Facilitates buying and selling of goods and services through digital platforms,
enabling transactions to be completed over the internet.

Product Listings and Search: Provides detailed product descriptions, images, and search functionality
to help users find and compare products easily.

Payment Integration: Supports various online payment methods such as credit/debit cards, digital
wallets, and online banking for secure and convenient transactions.

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 Order Tracking and Management: Allows customers to track their orders in real-time and manage
their purchase history and returns through user accounts.

Customer Reviews and Ratings: Enables customers to leave feedback and rate products, helping others
make informed purchasing decisions and providing sellers with valuable insights.

BENEFITS OF E – COMMERCE

✓ Convenience: Allows customers to shop 24/7 from anywhere with an internet connection,
eliminating the need for physical store visits and long queues.
✓ Global Reach: Provides access to a worldwide customer base, enabling businesses to expand
beyond local markets and increase their potential sales.
✓ Cost Efficiency: Reduces operational costs related to physical storefronts, such as rent, utilities,
and staffing, leading to potentially lower prices for consumers.
✓ Personalization: Utilizes data analytics to offer personalized recommendations, targeted
promotions, and tailored shopping experiences based on user behaviour and preferences.
✓ Scalability: Allows businesses to easily scale operations by adding new products, reaching new
markets, and handling increased transaction volumes without significant infrastructure changes.

LIMITATIONS/DISSDVANTAGES OF E – COMMERCE

 Lack of Physical Inspection: Customers cannot physically inspect or try products before
purchasing, which can lead to dissatisfaction or returns if the product does not meet expectations.
 Security Risks: Potential for online fraud, data breaches, and identity theft, as sensitive personal
and payment information is transmitted over the internet.
 Shipping Costs and Delays: Additional costs for shipping and potential delays in delivery can
affect customer satisfaction and increase overall expenses for both consumers and sellers.
 Technical Issues: Dependence on technology means that website downtimes, technical glitches,
or internet connectivity problems can disrupt transactions and affect user experience.
 Limited Personal Interaction: Reduced face-to-face customer service and interaction may lead
to a lack of personalized assistance and support, affecting the overall shopping experience.

ARCHITECTURAL FRAMEWORK OF ELECTRONIC COMMERCE

The architectural framework of electronic commerce (e-commerce) refers to the structural design and
organization of components that work together to facilitate online transactions. This framework
encompasses various layers and components, each responsible for different aspects of e-commerce.
Here’s an overview of the key elements in a typical e-commerce architecture:

1. USER INTERFACE LAYER

• Front-end: This is the visible part of an e-commerce system that interacts directly with users. It
includes the website or mobile app where customers browse products, add items to their cart, and
complete transactions. The user interface is designed for usability and accessibility.

2. APPLICATION LAYER

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 • Web Server: Handles HTTP requests from users and serves web pages. It processes user
requests and communicates with the application server.
• Application Server: Hosts business logic and application functionalities. It processes user
inputs, manages business rules, and interacts with databases and other back-end systems.
• Content Management System (CMS): Manages digital content on the e-commerce platform,
including product descriptions, images, and marketing materials.

3. BUSINESS LOGIC LAYER

• Order Processing: Manages shopping cart functions, order creation, and fulfilment processes.
• Inventory Management: Tracks product availability and updates stock levels in real-time.
• Customer Relationship Management (CRM): Manages customer data, interactions, and
support. It helps in personalized marketing and customer service.

4. DATA LAYER

• Database Management System (DBMS): Stores and manages data related to products,
customers, orders, and transactions. This includes relational databases (e.g., MySQL,
PostgreSQL) or NoSQL databases (e.g., MongoDB).
• Data Warehouse: Aggregates and analyses data from various sources to support business
intelligence and reporting.

5. INTEGRATION LAYER

• Payment Gateway: Facilitates secure payment processing and transactions. It connects with
financial institutions to handle credit card transactions, electronic funds transfers, and other
payment methods.
• Third-Party Services: Includes integrations with external systems such as shipping providers,
tax calculation services, and customer authentication services.

WEB – BASED E-COMMERCE ARCHITECTURE

Web-based E-commerce is one of the fastest-growing segments of the technology that defines the
business strategy. Web-based E-commerce provides easy and better communication between
geographically separated buyers and sellers. E-commerce is a way of doing business by enabling better
interaction among customers, business partners and business relationship managers using electronic tools.

PLANNING FOR WEB-BASED E-COMMERCE ARCHITECTURE

• Understanding the various roles and the kinds of users to ensure that the maximum users can get the
maximum advantages of the system to accomplish their aim Understanding the functions of the different
modules of the system and their interfaces, i.e., how the different functions perform a special task by
exchanging information and how the functions are related to each other in a single unit

• Recording the links of the transaction details of the business in a database. The transaction details
contain information such as transition type, purchased item information, i.e., price, item identification and
stock information.

• Specifying the trust model for the system: Every system must have at least an implicit trust model that
helps maintain the security of the system by providing the details of the relationships between the
component

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TYPES OF E-COMMERCE

E-commerce, or electronic commerce, involves transactions conducted over the internet. There are
several types of e-commerce, each catering to different market segments and business models. Here are
the primary types:

1. BUSINESS-TO-CONSUMER (B2C)

• Description: Transactions between businesses and individual consumers.

• Examples: Amazon, eBay, Walmart.
• Characteristics: Wide product range, customer-focused, user-friendly interfaces.

2. BUSINESS-TO-BUSINESS (B2B)

• Description: Transactions between businesses.

• Examples: Alibaba, Thomas Net, Grainger.
• Characteristics: Bulk transactions, long-term relationships, negotiated pricing.

3. CONSUMER-TO-CONSUMER (C2C)

• Description: Transactions between individual consumers.

• Examples: eBay, Craigslist, Facebook Marketplace.
• Characteristics: Peer-to-peer transactions, used or second-hand goods, auction models.

4. CONSUMER-TO-BUSINESS (C2B)

• Description: Transactions where individuals sell products or services to businesses.

• Examples: Freelance platforms like Upwork, Fiverr; stock photo sites.
• Characteristics: Individual-led services or products, reverse auction models.

5. BUSINESS-TO-GOVERNMENT (B2G)

• Description: Transactions between businesses and government agencies.

• Examples: Government procurement sites, contract bidding platforms.
• Characteristics: Formal procurement processes, regulatory compliance.

6. GOVERNMENT-TO-BUSINESS (G2B)

• Description: Transactions where governments provide services or information to businesses.

• Examples: Business registration services, tax filing.
• Characteristics: Public service-oriented, often part of e-government initiatives.

7. GOVERNMENT-TO-CONSUMER (G2C)

• Description: Transactions where governments provide services to individuals.

• Examples: Online tax filing, license renewals, social security services.
• Characteristics: Public service delivery, user-centric portals.

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 MODULE 2: CONSUMER ORIENTED E-COMMERCE

TRADITIONAL RETAILING & E – RETAILING

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Traditional Retailing –

Traditional Retailing refers to the process of selling goods and services to consumers
through physical stores or outlets. This form of retailing involves direct, face-to-face interaction between
customers and sales staff and allows customers to see, touch, and try products before making a purchase.

E- Retailing –

E-Retailing, also known as electronic retailing or online retailing, refers to the process of
selling goods and services over the internet. This modern form of retailing allows consumers to shop
online through websites, mobile apps, and other digital platforms without needing to visit a physical
store.

FEATURES OF E – RETAILING

Digital Platforms:

• Websites: The primary platform for e-retailing, accessible via web browsers.
• Mobile Apps: Dedicated applications for smartphones and tablets, providing a more streamlined
shopping experience.
• Online Marketplaces: Platforms like Amazon, eBay, and Alibaba where multiple sellers can list
and sell their products.

24/7 Accessibility:

• Anytime Shopping: E-retail stores are open 24/7, allowing customers to shop at any time that
suits them, regardless of time zones or business hours.

Global Reach:

• Wide Audience: E-retailers can reach a global customer base, transcending geographical
boundaries.
• International Shipping: Ability to ship products internationally, expanding market reach.

Convenience:

• Home Shopping: Customers can shop from the comfort of their homes or on the go using mobile
devices.
• No Travel Needed: Eliminates the need to travel to a physical store.

Wide Range of Products:

• Extensive Catalogs: E-retailers often have vast inventories, offering a broader range of products
than traditional stores.
• Easy Browsing: Advanced search and filtering options to easily find products.

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Flexible Payment Options:

• Multiple Payment Methods: Options include credit/debit cards, digital wallets (e.g., PayPal,
Apple Pay), bank transfers, and cryptocurrencies.
• Buy Now, Pay Later: Payment plans such as After pay, Klarna, and Affirm.

Shipping and Delivery:

• Various Delivery Options: Standard, expedited, and same-day delivery options.

• Order Tracking: Customers can track their orders in real-time.
• Free Shipping: Often offered for minimum purchase amounts.

BENEFITS OF E – RETAILING

➢ Global reach - because e-tailing uses the internet, it overcomes the geographical barriers
involved in traditional retailing

➢ 24/7 availability - online stores have no set business hours, meaning customers can shop at their
convenience

➢ Cost efficiency - with e-tailing, you don’t need a brick-and-mortar store and you can leverage
drop shipping to keep order fulfilment costs down

➢ Data analytics - make it easier to understand user behaviour, anticipate seasonal demand,
optimise customer experience and, ultimately, increase online sales

➢ Expanded product variety - because you don’t need to stock physical products as an etailer,
you can offer a wide range of products

➢ Targeted marketing - using customer data analytics, you can understand your target
demographics and create marketing campaigns personalised to them

KEY SUCCESS FACTORS OF E - RETAILING

1. Brand name:
Create a memorable brand name: Like Amazon, eBay, Flipkart, etc., your business
name and domain name should be simple (maybe just one word) and catchy. It should be easy to
remember and pronounce. The reason is, most of the customers want to shop the things in brand
stores. Therefore, choosing a memorable brand name is the key first step in starting the
ecommerce business.
2. Design of the store Attractive design:
When it comes to the look and appearance of the storefront, the design should
entice the customers. You have to build the stores with the latest features and display the array of
products in an aesthetically pleasing manner.

Create an easy-to-use interface: The user interface is the amazing thing that draws the visitors’
attention. You can design the store in such a way that makes customers find products easily and
complete the purchase in a short period of time.

3. Search Engine Optimization (SEO) Make your site SEO-friendly:

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 You have to build a website that is search engine friendly as it helps you rank top
position in the search engines. For example, Purchase Commerce is an SEO-friendly ecommerce
platform that makes it easy to write a detailed product description, also allowing its visibility in
search engines when someone searches for those products.
Use relevant keywords: You can use tools like Keyword Planner and Uber Suggest
to figure out the long tail purchase intent keywords for your store. Using these keywords in the
product description will increase its visibility in search engines.

4. Multichannel marketing Promote on social media:

As per stats, there are 3.2 billion social media
users around the world. Hence, you can use this excellent opportunity to advertise your store.
Create a Facebook and Instagram business page can boost your brand’s online presence.

Content marketing: Content marketing is one type of ecommerce strategy where you can
acquire new buyers. Creating content about products and publishing them on your web page is an
added advantage to your site. Also, making a YouTube video about the product review helps in
getting more traffic to your online store.

5. Personalized buying experience Customer Satisfaction is the key:

Customer satisfaction is the main thing to boost your business globally. Every new
customer is important for your business; therefore, you should satisfy all the customers’ needs.
Make the customer work simple: Always don’t make the customer confused about your
product. You should make it clear what your business website actually provides. Hence, display
all the details in a well-defined way. Also, your site should have multilingual support if you want
to develop your business globally.

6. Multiple payment methods in online shopping :

75.6% is the average rate of shopping cart abandonment. To avoid this, you can
provide multiple payment options in your store.
Online payment: The online money transactions are becoming popular now and buyers are
familiar with the net banking payment method. You can provide options like credit card and debit
card transaction along with the net banking to don’t lose out any customers. You can even offer
your store’s wallet to pay the amount.

7. Easy check-out process Add save list buttons: ‘Add to Cart’ and ‘Add to Wishlist’ buttons are
primary features in your store. These buttons aid customers to add their desired products. You
can make them mostly red colour to make it attractive. Single page check-out: To save the

B2B (BUSINESS TO BUSINESS) E-COMMERCE

B2B (business-to-business) is a type of commerce involving the exchange of products, services or

information between businesses, rather than from a business to consumer (B2C). A B2B transaction is
conducted between two companies, such as a wholesaler and an online retailer. In most B2B commerce,

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each organization benefits in some way and typically has similar negotiating powers. Nearly all B2B
commerce occurs on the internet as e-commerce.

Transactions are conducted via different categories of websites, including the following:

• Company websites : This is the most straightforward model of B2B transactions. A company uses its
own website to sell goods and services directly to its business clients. Sometimes, a company website
uses a secure extranet to provide clients with exclusive access to product catalogues or price lists.

• Product supply and procurement exchanges: These online exchanges allow a company's purchasing
agent to shop for supplies or raw materials from multiple vendors, submit requests for proposals (RFPs)
and, in some cases, bid on products. Also known as e-procurement sites, these exchanges can serve a
range of industries and be tailored to niche markets.

• Specialized or vertical industry portals: These portal sites provide specialized and vertical markets
with a more targeted approach than procurement sites. They might also support buying and selling, and
provide information, product listings, discussion groups and other features for industries such as
healthcare, banking and transportation.

• Brokering sites: These sites act as an intermediary between service providers and potential customers
that need their services, such as leasing equipment or services.

• Information sites: Sometimes known as infomediaries, these sites provide information about a
particular industry to companies and their employees. Information sites include specialized search sites
and those of trade and industry standards organization

E-retailing encompasses various business models, each catering to different consumer needs and
operational strategies. Here’s a breakdown of the primary models of e-retailing:

1. BUSINESS-TO-CONSUMER (B2C)

• Description: Direct sales from businesses to individual consumers.

• Examples:
o Amazon: Offers a vast range of products directly to consumers.
o Walmart: Provides groceries, electronics, and other goods through its online store.
• Features:
o Product Variety: Wide range of products across multiple categories.
o Customer Focus: Tailored to individual consumer preferences and needs.

2. BUSINESS-TO-BUSINESS (B2B)

• Description: Transactions between businesses, where one business sells products or services to
another.
• Examples:
o Alibaba: Connects manufacturers with businesses for bulk purchasing.
o Grainger: Supplies industrial and maintenance products to businesses.
• Features:
o Bulk Orders: Often involves larger quantities and negotiated pricing.
o Long-Term Relationships: Focuses on building long-term business relationships.

3. CONSUMER-TO-CONSUMER (C2C)

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 • Description: Individuals sell products or services directly to other individuals, typically through
online platforms.
• Examples:
o eBay: Allows individuals to auction and sell products to other consumers.
o Craigslist: Facilitates local sales of various goods and services.
• Features:
o Peer-to-Peer Transactions: Transactions occur between individuals, often facilitated by
a platform.
o Marketplace Model: Platforms act as intermediaries to connect buyers and sellers.

4. CONSUMER-TO-BUSINESS (C2B)

• Description: Individuals offer products or services to businesses.

• Examples:
o Freelancer Platforms (e.g., Upwork, Fiverr): Individuals offer freelance services to
businesses.
o Stock Photo Websites (e.g., Shutterstock): Photographers sell images to businesses.
• Features:
o Service Provision: Individuals provide services or products that businesses need.
o Reverse Auction: Businesses may bid for services or products offered by individuals.

5. BUSINESS-TO-GOVERNMENT (B2G)

• Description: Businesses provide products or services to government agencies.

• Examples:
o Fed Bid: A marketplace for government procurement.
o SAP Ariba: Provides procurement solutions for government entities.
• Features:
o Regulatory Compliance: Adherence to government regulations and standards.
o Contract-Based Transactions: Often involves formal contracts and tenders.

6. SUBSCRIPTION-BASED MODEL

• Description: Customers pay a recurring fee to access products or services on a regular basis.
• Examples:
o Netflix: Offers streaming services through a subscription.
o Dollar Shave Club: Provides razors and grooming products on a subscription basis.
• Features:
o Recurring Revenue: Consistent income through regular subscriptions.
o Customer Retention: Focus on maintaining long-term customer relationships.

7. DROPSHIPPING

• Description: E-retailers sell products without holding inventory. When a customer places an
order, the retailer purchases the item from a third party, which ships it directly to the customer.
• Examples:
o Oberlo: Connects e-retailers with suppliers for drop shipping.
o AliExpress: Offers products for drop shipping businesses.

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 • Features:
o No Inventory Management: Products are shipped directly from suppliers.
o Lower Risk: Reduced financial risk as inventory is not held.

E-SERVICES

1. ONLINE BANKING AND FINANCIAL SERVICES

• Account Management: Allows users to view account balances, transaction history, and manage
accounts online.
• Fund Transfers: Facilitates transferring money between accounts or to other individuals, both
domestically and internationally.
• Bill Payments: Enables users to pay bills such as utilities, mortgages, and credit cards directly
from their accounts.

2. E-COMMERCE

• Product Listings and Catalogs: Displays a wide range of products with descriptions, prices, and
images.
• Secure Payment Processing: Supports various payment methods including credit/debit cards,
digital wallets, and bank transfers with encryption for security.
• Order Tracking: Provides real-time updates on the status of orders, including shipping and
delivery information.
• Customer Reviews and Ratings: Allows customers to leave feedback on products and services,
which helps inform other buyers.

3. TELEMEDICINE AND HEALTH SERVICES

• Virtual Consultations: Enables patients to consult with healthcare professionals via video calls,
reducing the need for in-person visits.
• Remote Health Monitoring: Utilizes wearable devices and apps to monitor health metrics such
as heart rate, blood sugar levels, and activity.
• Medical Records Access: Provides secure online access to personal medical records, test results,
and treatment history.
• Appointment Scheduling: Offers online tools for scheduling and managing medical
appointments.

4. E-LEARNING AND ONLINE EDUCATION

• Online Courses and Tutorials: Provides access to a variety of educational materials, including
video lectures, readings, and exercises.
• Interactive Learning: Includes features like quizzes, discussion forums, and interactive
simulations to enhance learning.
• Certifications and Degrees: Offers opportunities to earn certifications, diplomas, and degrees
from accredited institutions through online programs.
• Virtual Classrooms: Facilitates live, instructor-led classes and webinars, enabling real-time
interaction between students and educators.

5. E-GOVERNMENT SERVICES

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 • Online Applications: Enables citizens to apply for various government services such as permits,
licenses, and social benefits online.
• Public Records Access: Provides access to public records and documents, such as birth
certificates, marriage licenses, and property records.
• Tax Filing and Management: Allows individuals and businesses to file taxes, manage tax
records, and make payments online.
• Service Requests and Complaints: Facilitates the submission of service requests, grievances,
and feedback to government agencies.
• Electronic Voting: Some jurisdictions offer secure online voting options for elections and
referenda.

6. DIGITAL MEDIA SERVICES

• Streaming Services: Provides on-demand access to video content (movies, TV shows) and audio
content (music, podcasts) via streaming.
• Digital Downloads: Allows users to purchase and download digital content such as e-books,
music files, and software.
• Subscription Models: Offers access to media content through subscription plans, often with
tiered pricing and exclusive content.
• Recommendations and Personalization: Uses algorithms to suggest content based on user
preferences and viewing history.

7. CLOUD SERVICES

• Storage Solutions: Provides scalable and secure storage for data and files, accessible from any
internet-connected device.
• Computing Resources: Offers on-demand access to virtual machines, computing power, and
processing capabilities for various applications.
• Software as a Service (SaaS): Delivers software applications over the internet, including tools
for productivity, collaboration, and customer relationship management (CRM).
• Data Backup and Recovery: Ensures data protection through automated backups and recovery
solutions.

8. CUSTOMER SUPPORT SERVICES

• Live Chat: Provides real-time support and assistance through chat interfaces on websites and
apps.
• Help Desks: Includes ticketing systems and knowledge bases for managing and resolving
customer issues.
• Chatbots: Uses artificial intelligence to automate responses to frequently asked questions and
common problems.
• Email and Phone Support: Offers traditional support channels for customer inquiries and
problem resolution.
• Self-Service Portals: Provides users with tools to manage their accounts, track orders, and
access support resources independently

DIFFERENCE BETWEEN TRADITION RETAILING & E – RETAILING

BASIS TRADITIONAL RETAILING E – RETAILING

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Physical Relies on physical brick-and-mortar stores Operates primarily through online platforms
Presence where customers can visit in person to such as websites and mobile apps, eliminating
make purchases. the need for physical storefronts

Accessibility Limited by store operating hours and Offers 24/7 accessibility from anywhere with an
geographic location, requiring customers internet connection, allowing customers to shop
to travel to the store. at their convenience.

Product
Assortment Limited by physical space, offering a Can offer a wide range of products across
narrower selection of products compared diverse categories due to virtual inventory and
to e-retailers. digital catalogs.

Customer Provides face-to-face interaction with Offers convenience and flexibility but lacks
Experience sales associates, allowing for personalized physical interaction, relying on digital tools for
assistance and immediate product product discovery and customer support.
availability.

Transaction
Process Involves immediate gratification, with Requires shipping or delivery of products,
customers taking possession of purchased resulting in a delay between purchase and
items immediately after payment receipt of goods.

Costs and
Overheads Incurs higher overhead costs such as rent, Can operate with lower overhead costs as it
utilities, and staff wages due to the does not require physical storefronts, reducing
operation of physical stores. expenses related to rent and utilities.

Traditional Retailing: Limited to local or Has a global reach, allowing businesses to

Market regional markets, requiring physical target customers worldwide without the need
Reach presence in each target location. for physical expansion

MODULE 3: ELECTRONIC DATA INTERCHANGE

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EDI (ELECTRONIC DATA INTERCHANGE)

EDI which stands for electronic data interchange, is the intercompany communication of business
documents in a standard format. The simple definition of EDI is that it is a standard electronic format that
replaces paper-based documents such as purchase orders or invoices.

BENEFITS OF EDI

EDI transactions are essential to B2B processes and continue to be the preferred means to exchange
documents and transactions between businesses both small and large. EDI technology delivers five key
business benefits through automation and B2B integration:

• EDI technology saves time and money through the automation of a process that was previously
manually run with paper documents.

• EDI solutions improve efficiency and productivity because more business documents are shared and
processed in less time with greater accuracy.

• EDI data transfer reduces errors through rigid standardization, which helps to ensure that information
and data are correctly formatted before they enter business processes or applications.

• Integration of EDI improves traceability and reporting by allowing electronic documents to be

incorporated with various IT systems, facilitating data collection, visibility and analysis.

• Efficient EDI automation enables reliable product and service delivery for a positive customer
experience.

IMPLEMENTING EDI

Step 1: Develop the organisational structure Your first action is to ensure that you have access to the
correct skills. Develop EDI coordinators and teams that will drive the programme through your
organisation.

Step 2: Undertake a strategic review The business areas that benefit most from EDI deployment vary by
organisation. A strategic review identifies where EDI has greatest potential in your business.

Step 3: Conduct in-depth analysis an accurate analysis of costs and projected payback when
implementing EDI is essential.

Step 4: Develop a business-focused EDI solution Selecting the correct EDI solution for your business
requires an in-depth understanding of both the technical and business issues – for you and your trading
partners.

Step 5: Select the correct EDI network provider (VAN) Most organisations find using an EDI provider
makes the best business and financial sense. Selecting the correct provider for your business is
imperative.

Step 6: Integrate EDI with the business How an EDI system is designed and developed depends on the
amount of custom work required and the amount of internal systems with which it needs to share data.

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Step 7: Integrate data across the business Most applications impose their own data structures. The data
from internal and external systems need to be analysed in order to ensure they translate into your EDI
system.

Step 8: Undertake data mapping to ensure the smooth flow of information between internal applications
and trading partners, documents need to be mapped to allow effective data transmission.

Step 9: Establish a pilot project Before your EDI system goes live within your entire trading community,
it is important to select a small number of partners to test the system in ‘near live’ conditions.

Step 10: Roll out EDI to trading partners The last action is to implement EDI across your trading
partners. This should be achieved in a staged manner that reflects your current business priorities

ELECTRONIC PAYMENT SYSTEM

An Electronic Payment System (EPS) is a method of making transactions or paying for goods and
services through an electronic medium, without the use of physical cash or checks. This system is a
critical component of modern financial infrastructure, facilitating the seamless transfer of funds between
parties through digital means.

NEED FOR ELECTRONIC PAYMENT SYSTEM

1. Convenience: Electronic payment systems offer unparalleled convenience. Users can make
transactions from the comfort of their homes or on the go, without the need to carry physical cash or visit
a bank.

2. Globalization: With businesses and individuals operating on a global scale, electronic payment
systems facilitate transactions across borders seamlessly, eliminating the need for currency conversions
and reducing transaction costs.

3. Speed: Electronic payments are processed much faster compared to traditional payment methods such
as checks. This speed is crucial for businesses that require quick access to funds or for individuals
making time-sensitive payments.

4. Security: While security concerns exist, electronic payment systems often employ encryption and
other security measures to protect users' financial information. Additionally, electronic transactions leave
a digital trail, which can help track and prevent fraudulent activities.

5. Cost-Effectiveness: Electronic payment systems can be more cost-effective for both businesses and
consumers. For businesses, they can reduce the costs associated with handling cash, such as counting and
transporting it. For consumers, electronic payments can eliminate fees associated with traditional banking
services, such as ATM withdrawals.

6. Accessibility: Electronic payment systems provide access to financial services for individuals who
may not have easy access to traditional banking services. This accessibility is particularly important in
underserved or remote areas.

7. Facilitation of Online Commerce: With the rise of e-commerce, electronic payment systems are
indispensable for facilitating online transactions. They allow consumers to purchase goods and services
from anywhere in the world with ease.

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8. Integration with Mobile Technology: The proliferation of smartphones has led to the integration of
electronic payment systems with mobile technology. Mobile payment solutions such as digital wallets
and mobile banking apps enable users to make payments using their smartphones, further enhancing
convenience.

9. Streamlined Accounting and Reporting: Electronic payment systems often come with features that
streamline accounting processes for businesses, such as automated transaction tracking and reporting.
This can save time and reduce the likelihood of errors. Overall, electronic payment systems play a crucial
role in modern economies by providing efficient, secure, and convenient means of conducting financial
transactions.

BENEFITS OF ELECTRONIC PAYMENT SYSTEMS

1. Convenience
o Ease of Use: Users can make transactions from anywhere at any time, without the need
to visit a physical location.
o Accessibility: Available 24/7, allowing users to conduct transactions outside of
traditional banking hours.
2. Speed and Efficiency
o Instant Transactions: Payments are processed quickly, often in real-time, reducing the
waiting period for transaction completion.
o Automated Processes: Reduces manual handling and paperwork, speeding up
transaction processing and reducing errors.
3. Security
o Advanced Encryption: Uses sophisticated encryption technologies to protect sensitive
financial information.
o Authentication Protocols: Employs multi-factor authentication (MFA) and other
security measures to prevent unauthorized access and fraud.
4. Cost-Effectiveness
o Reduced Transaction Costs: Lowers costs associated with physical cash handling,
printing checks, and manual processing.
o Operational Efficiency: Minimizes the need for physical infrastructure and
administrative staff, leading to cost savings for businesses.
5. Record Keeping and Management
o Automated Records: Automatically generates detailed transaction records, aiding in
financial management and reporting.
o Audit Trails: Provides comprehensive audit trails, making it easier to track and verify
transactions.
6. Global Reach
o Cross-Border Transactions: Facilitates international trade and commerce by enabling
cross-border payments.
o Currency Conversion: Often includes integrated currency conversion services,
simplifying international transactions.
7. Enhanced Customer Experience
o User-Friendly Interfaces: Often features intuitive and user-friendly interfaces,
improving the overall customer experience.
o Multiple Payment Options: Offers various payment methods, including credit/debit
cards, digital wallets, and bank transfers, catering to diverse customer preferences.
8. Economic Growth
o Increased Commerce: Promotes e-commerce and digital marketplaces, contributing to
economic growth.
o Financial Inclusion: Provides access to financial services for unbanked and
underbanked populations, supporting economic inclusion and development.

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 9. Environmental Benefits
o Reduced Paper Usage: Minimizes the need for paper checks, receipts, and other
documents, reducing environmental impact.
o Sustainable Practices: Encourages the adoption of digital and sustainable business
practices.

TYPES OF ELECTRONIC PAYMENTS

Electronic payments encompass a variety of methods that allow users to transfer funds and make
transactions digitally. Here are the main types of electronic payments:

1. CREDIT AND DEBIT CARDS

• Credit Cards:
o Allow users to borrow funds up to a certain limit for purchases or cash withdrawals.
o Examples: Visa, MasterCard, American Express.
• Debit Cards:
o Directly withdraw funds from the user’s bank account for transactions.
o Examples: Visa Debit, MasterCard Debit.

2. DIGITAL WALLETS (E-WALLETS)

• Description:
o Secure, virtual wallets that store payment information and funds.
• Examples:
o PayPal, Apple Pay, Google Wallet, Samsung Pay.

3. BANK TRANSFERS

• Electronic Funds Transfer (EFT):

o Transfers money directly from one bank account to another.
o Examples: Direct deposit, wire transfers.
• Automated Clearing House (ACH):
o Processes batches of electronic payments, often used for payroll and bill payments.
o Examples: Payroll processing, utility bill payments.

4. MOBILE PAYMENTS

• Description:
o Payments made through mobile devices, often via apps.
• Examples:
o Venmo, Gpay, Phone pay, Paytm, Amazon pay

5. ONLINE BANKING

• Description:
o Banking services accessed via the internet, allowing for transfers, payments, and account
management.
• Examples:

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 o Online bill pay, funds transfer services provided by banks.

6. CRYPTOCURRENCY PAYMENTS

• Description:
o Digital currencies that use cryptographic methods to secure transactions and control the
creation of new units.
• Examples:
o Bitcoin, Ethereum, Litecoin.

7. PREPAID CARDS

• Description:
o Cards preloaded with a set amount of money, which can be used for transactions until the
balance is depleted.
• Examples:
o Gift cards, prepaid debit cards like Visa or MasterCard prepaid cards.

8. ELECTRONIC CHECKS (E-CHECKS)

• Description:
o Digital version of traditional paper checks, transferring funds electronically from the
payer’s bank account.
• Examples:
o ACH payments, e-check services provided by banks.

9. CONTACTLESS PAYMENTS

• Description:
o Payments made by tapping a contactless card or mobile device near a point-of-sale
terminal.
• Examples:
o Contactless credit/debit cards, NFC-enabled mobile payments (e.g., Apple Pay, Google
Pay).

10. ONLINE PAYMENT GATEWAYS

• Description:
o Services that authorize and process payments for e-commerce sites and online retailers.
• Examples:
o Stripe, Square, PayPal

SECURE ELECTRONIC TRANSACTION PROTOCOL FOR CREDIT CARD

PAYMENTS

Secure Electronic Transaction (SET) is a protocol developed to ensure secure credit card transactions
over the internet.

It was designed by Visa and MasterCard, with support from other major players in the industry, including
IBM, Microsoft, and Netscape.

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The protocol aimed to provide a secure method for consumers and merchants to transmit credit card
information, ensuring privacy, integrity, and authentication of the transaction data.

KEY FEATURES OF SET

1. Confidentiality of Information
o Encryption: SET uses encryption to ensure that the credit card information and
transaction details are only accessible to the intended recipient.
o Secure Channel: A secure channel is established between the parties involved to prevent
eavesdropping.
2. Integrity of Data
o Digital Signatures: Ensures that the transaction data has not been altered in transit. Both
the cardholder and merchant use digital signatures to validate the integrity of the data.
3. Authentication
o Cardholder Authentication: Verifies the identity of the cardholder using digital
certificates issued by a trusted Certificate Authority (CA).
o Merchant Authentication: Confirms the legitimacy of the merchant to the cardholder,
also using digital certificates.
4. Non-Repudiation
o Proof of Transaction: Provides proof of the transaction to both parties, ensuring that
neither the cardholder nor the merchant can deny involvement in the transaction.

HOW SET WORKS

1. Initialization
o Cardholder and Merchant Registration: Both the cardholder and merchant must
register with a Certificate Authority (CA) to obtain digital certificates.
o Certificate Issuance: The CA issues a pair of digital certificates to both the cardholder
and the merchant. One certificate is for digital signatures, and the other is for key
exchange.
2. Purchase Request
o Order Information Encryption: The cardholder sends the order information to the
merchant encrypted with the merchant’s public key.
o Payment Information Encryption: The payment information (credit card details) is
encrypted separately with the payment gateway’s public key.
3. Purchase Response
o Order and Payment Confirmation: The merchant sends a confirmation message to the
payment gateway. The payment gateway decrypts the payment information and
processes the transaction.
o Digital Signature Verification: The payment gateway verifies the cardholder’s and
merchant’s digital signatures.
4. Authorization and Capture
o Authorization Request: The payment gateway sends an authorization request to the
cardholder’s issuing bank.
o Transaction Approval: The issuing bank approves the transaction and sends an
authorization response back to the payment gateway, which then forwards it to the
merchant.
5. Completion
o Transaction Completion Message: The merchant sends a transaction completion
message to the cardholder, confirming the successful processing of the order and
payment

ENSURING SECURITY IN ELECTRONIC PAYMENT

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1. Encryption and Tokenization
▪ Encryption involves converting sensitive data into an unreadable format during transmission,
ensuring that only authorized parties can decipher it. This prevents unauthorized access to critical
information during payment processing.
▪ Tokenization replaces sensitive data with unique tokens, which are used for transactions. The
actual data is securely stored in a separate, protected database, reducing the risk of data breaches.

2. Two-Factor Authentication
▪ Two-factor authentication (2FA) adds an extra layer of security by requiring users to provide two
forms of identification before completing a transaction.
▪ This typically involves a combination of something the user knows (e.g., a password) and
something the user possesses (e.g., a unique code sent to their mobile device).

3. Fraud Detection and Prevention Measures

▪ Advanced fraud detection systems continuously monitor transactions for suspicious activities.
These systems use artificial intelligence and machine learning algorithms to identify patterns
indicative of fraudulent behaviour.
▪ Additionally, businesses can implement rules-based systems that flag or block suspicious
transactions based on predefined criteria, reducing the risk of fraudulent transactions.
4. Compliance with Payment Card Industry Data Security Standards (PCI DSS)
▪ PCI DSS is a set of security standards designed to protect cardholder data during electronic
payment processes. Compliance with PCI DSS is mandatory for all businesses that handle credit card
information. ▪ Adhering to these standards ensures that businesses have robust security measures in
place to protect customer payment data and maintain a secure environment for electronic
transactions

MODULE 4: SECURITY & THREATS IN E -COMMERCE

VIRUS

A computer virus is a type of malicious software designed to replicate itself and spread from one
computer to another, causing harm such as data corruption, unauthorized access, or system damage.

1. Function:
o A computer virus attaches itself to legitimate programs or files. When the infected
program or file is executed, the virus is activated, allowing it to replicate and spread.
2. Effects:

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 o Viruses can slow down computer performance, delete or corrupt files, steal sensitive
information, and spread across networks.
3. Prevention:
o Use antivirus software, keep systems and applications updated, practice safe browsing
habits, regularly back up data, and use firewalls and security software to protect against
infections.

CYBER CRIME

Cybercrime refers to illegal activities that are carried out using computers or the internet. These crimes
can target individuals, businesses, or government institutions, and often involve the theft of data,
financial information, or causing harm to computer systems. Cybercrimes can be committed by
individuals, organized groups, or even state-sponsored actors.

TYPES OF CYBER CRIME

➢ Hacking: Unauthorized access to computer systems or networks to steal, alter, or destroy data.
➢ Phishing: Deceptive attempts to obtain sensitive information such as usernames, passwords,
and credit card details by masquerading as a trustworthy entity.
➢ Identity Theft: Stealing personal information to commit fraud, such as opening bank accounts
or credit cards in someone else's name.
➢ Malware: Malicious software designed to damage, disrupt, or gain unauthorized access to
computer systems (e.g., viruses, ransomware, spyware).
➢ Cyber Stalking: Using the internet to harass or stalk individuals, often leading to intimidation
and fear.
➢ Online Fraud and Scams: Deceptive practices conducted online to trick individuals into
giving away money or personal information (e.g., fake auctions, investment fraud).
➢ Distributed Denial of Service (DDoS) Attacks: Overwhelming a website or online service
with excessive traffic to make it unavailable to users.
➢ Child Exploitation: Using the internet to exploit or harm children, including the distribution of
child pornography.

NETWORK SECURITY

Network security refers to the strategies, policies, and technologies used to protect the integrity,
confidentiality, and availability of data and resources within a computer network. Effective network
security involves multiple layers of defences at the edge and within the network.

TYPES OF NETWORK SECURITY

1. FIREWALL SECURITY
Definition: Firewalls are hardware or software-based systems that control incoming and outgoing
network traffic based on predetermined security rules.

Types:

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 Packet-Filtering Firewalls: Examine packets and allow or deny them based on source and destination
IP addresses, ports, or protocols.

Stateful Inspection Firewalls: Monitor the state of active connections and make decisions based on the
context of the traffic.

Proxy Firewalls: Act as intermediaries between users and the internet, filtering traffic at the application
level.

2. INTRUSION DETECTION AND PREVENTION SYSTEMS (IDS/IPS)

Definition: IDS and IPS are systems that monitor network traffic for suspicious activity and respond
accordingly.

Types:

Network-Based IDS/IPS (NIDS/NIPS): Monitor the entire network for malicious activity.

Host-Based IDS/IPS (HIDS/HIPS): Monitor individual devices for signs of compromise.

Functionality: IDS alert administrators to potential threats, while IPS can take proactive measures to
block or mitigate these threats.

3. ANTIVIRUS AND ANTI-MALWARE

Definition: Software designed to detect, prevent, and remove malicious software, including viruses,
worms, and spyware.

Functionality: Provides real-time protection by scanning files and system activities for malicious
behaviour, and regularly updating virus definitions.

4. VIRTUAL PRIVATE NETWORKS (VPNS)

Definition: Secure connections over public networks that enable users to send and receive data as if their
devices were directly connected to a private network.

Types:

Remote-Access VPNs: Allow individual users to connect to a private network from a remote location.

Site-to-Site VPNs: Connect entire networks to each other, such as a corporate network to branch
offices.

Benefits: Encrypts data in transit, ensuring confidentiality and integrity.

5. ENCRYPTION

• Definition: The process of converting data into a coded format to prevent unauthorized access.
• Types:
o Data-at-Rest Encryption: Protects stored data (e.g., on hard drives, USBs).
o Data-in-Transit Encryption: Protects data as it moves across networks (e.g., SSL/TLS
for web traffic).
• Benefits: Ensures that even if data is intercepted, it cannot be read without the decryption key.

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6. ACCESS CONTROL

• Definition: Mechanisms that restrict access to network resources based on user credentials and
roles.
• Types:
o Role-Based Access Control (RBAC): Grants access based on user roles within an
organization.
o Mandatory Access Control (MAC): Enforces strict policies determined by a central
authority.
o Discretionary Access Control (DAC): Allows resource owners to set access
permissions.

7. SECURITY INFORMATION AND EVENT MANAGEMENT (SIEM)

• Definition: Systems that provide real-time analysis of security alerts generated by network
hardware and applications.
• Functionality: Aggregates and analyses logs from various sources to detect and respond to
security incidents.
• Examples: Splunk, IBM QRadar.

8. NETWORK SEGMENTATION

• Definition: Dividing a network into smaller, isolated segments to enhance security and
manageability.
• Benefits: Limits the spread of malware and makes it easier to control and monitor traffic.
• Types:
o Physical Segmentation: Using different physical devices to create separate network
segments.
o Logical Segmentation: Using VLANs and subnets to create separate segments within
the same physical network.

9. PATCH MANAGEMENT

• Definition: The process of regularly updating and applying patches to software and hardware to
fix vulnerabilities and improve security.
• Benefits: Reduces the risk of exploitation by ensuring systems are up to date with the latest
security fixes.

10. MULTI-FACTOR AUTHENTICATION (MFA)

• Definition: Requiring two or more verification methods to gain access to resources.

• Types: Passwords combined with something the user has (e.g., a phone) or something the user is
(e.g., a fingerprint).
• Benefits: Enhances security by requiring multiple forms of verification, reducing the risk of
unauthorized access.

FIREWALL

A firewall is a security device or software designed to monitor and control incoming and outgoing
network traffic based on predetermined security rules. The primary function of a firewall is to establish a
barrier between a trusted internal network and untrusted external networks, such as the internet. Firewalls

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are a fundamental component of network security and are used to prevent unauthorized access, data
breaches, and cyberattacks

TYPES OF FIREWALLS

Firewalls come in various types, each offering different levels of security, functionality, and performance
to meet the needs of different network environments. Here are the main types of firewalls:

1. PACKET-FILTERING FIREWALLS

• Function: Inspect packets at the network layer (Layer 3 of the OSI model) and allow or deny
them based on source and destination IP addresses, ports, and protocols.
• Operation: These firewalls use a set of rules to examine the headers of packets and decide
whether to forward or drop them.

2. STATEFUL INSPECTION FIREWALLS

• Function: Monitor the state of active connections and make filtering decisions based on the
context of the traffic (Layer 4 of the OSI model).
• Operation: These firewalls maintain a state table that tracks the state and context of each active
connection, allowing them to make more informed filtering decisions.

3. PROXY FIREWALLS (APPLICATION-LEVEL GATEWAYS)

• Function: Act as intermediaries between users and the internet, filtering traffic at the application
layer (Layer 7 of the OSI model).
• Operation: These firewalls proxy requests from clients to the destination server and vice versa,
inspecting the application data to make filtering decisions.

4. NEXT-GENERATION FIREWALLS (NGFWS)

• Function: Combine traditional firewall features with advanced capabilities such as intrusion
prevention, deep packet inspection, application awareness, and cloud-delivered threat
intelligence.
• Operation: These firewalls go beyond basic packet filtering and stateful inspection by analysing
the payload and using advanced threat detection techniques.

5. UNIFIED THREAT MANAGEMENT (UTM) FIREWALLS

• Function: Integrate multiple security features into a single device, including firewall, antivirus,
intrusion detection/prevention, content filtering, and VPN.
• Operation: These firewalls provide a broad range of security services in a unified platform,
simplifying deployment and management.

6. CLOUD FIREWALLS (FIREWALL AS A SERVICE - FWAAS)

• Function: Provide firewall capabilities as a cloud-based service, offering protection for cloud
infrastructure and services.
• Operation: These firewalls are deployed in the cloud and managed by a service provider,
offering scalability and flexibility.

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7. HARDWARE FIREWALLS

• Function: Physical devices that protect an organization's network perimeter by filtering traffic
entering or leaving the network.
• Operation: These firewalls are installed at network gateways and operate independently of other
network devices.

8. SOFTWARE FIREWALLS

• Function: Software applications installed on individual devices or servers to protect them from
unauthorized access and attacks.
• Operation: These firewalls filter traffic to and from the device, providing protection at the
endpoint level.

PROXY SERVER

A proxy server is an intermediary server that sits between client devices and the internet. It functions by
forwarding client requests to other servers and returning the responses to the clients. Proxy servers can
provide various benefits, including improved security, privacy, and network performance.

TYPES OF PROXY SEVER

1. Forward Proxy:
o Definition: A forward proxy sits in front of clients and forwards their requests to the
internet. It is commonly used in corporate networks to control and monitor internet
access.
o Use Cases: Content filtering, access control, web caching, and anonymity.
2. Reverse Proxy:
o Definition: A reverse proxy sits in front of web servers and forwards client requests to
the appropriate server. It is used to protect, optimize, and load balance requests for
servers.
o Use Cases: Load balancing, web acceleration, SSL encryption, and protection against
DDoS attacks.
3. Transparent Proxy:
o Definition: A transparent proxy intercepts client requests without requiring any
configuration on the client side. Clients are often unaware of the proxy's presence.
o Use Cases: Content filtering and caching without client configuration.
4. Anonymous Proxy:
o Definition: An anonymous proxy hides the client’s IP address, providing privacy and
anonymity for users.
o Use Cases: Protecting user identity, bypassing geo-restrictions, and avoiding tracking.
5. High Anonymity (Elite) Proxy:
o Definition: A high anonymity proxy not only hides the client’s IP address but also
disguises itself as a regular client, making it difficult to detect as a proxy.
o Use Cases: High-level privacy and security, avoiding sophisticated tracking systems.
6. SOCKS Proxy:
o Definition: A SOCKS proxy operates at the transport layer and can handle any type of
traffic, including HTTP, HTTPS, and FTP.
o Use Cases: Handling diverse traffic types, bypassing firewalls, and supporting peer-to-
peer connections.

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TYPES OF PROXY SERVER

1. ENHANCED SECURITY

• Malware and Virus Protection:

o Proxy servers can filter out malicious websites and content, protecting users and internal
networks from malware, viruses, and phishing attacks.
• Access Control:
o Administrators can restrict access to certain websites or content, preventing users from
visiting potentially harmful or inappropriate sites.

2. IMPROVED PERFORMANCE AND BANDWIDTH SAVINGS

• Caching:
o Proxy servers can cache frequently accessed web pages and resources. When a user
requests a cached resource, the proxy delivers it directly, reducing load times and saving
bandwidth.
• Load Balancing:
o Distributing client requests across multiple servers helps balance the load, ensuring
efficient use of server resources and maintaining high performance during peak traffic
times.

3. PRIVACY AND ANONYMITY

• IP Address Masking:
o Proxy servers hide the client’s IP address by replacing it with their own, protecting user
identity and location from external servers and trackers.
• Anonymity:
o By using anonymous or high anonymity proxies, users can browse the internet without
revealing their identity, helping to avoid tracking and surveillance.

4. BYPASSING RESTRICTIONS AND GEO-BLOCKING

• Access to Restricted Content:

o Proxy servers can be used to bypass geographic restrictions and censorship, allowing
users to access content that may be blocked in their region.
• Overcoming Network Firewalls:
o Users can use proxies to bypass network firewalls that restrict access to certain websites
or services, such as social media or streaming platforms.

5. CONTENT FILTERING AND PARENTAL CONTROL

• Filtering Unwanted Content:

o Organizations and parents can use proxy servers to block access to inappropriate,
offensive, or distracting websites, ensuring a safer and more productive internet
experience.
• Enforcing Usage Policies:
o Companies can enforce internet usage policies by restricting access to non-work-related
sites during business hours.

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6. IMPROVED ACCESS SPEED

• Reduced Latency:
o Cached content can be delivered more quickly than retrieving it from the original server,
reducing latency and improving user experience.
• Optimized Routing:
o Proxy servers can optimize routing of internet requests, potentially reducing the number
of hops and improving access speed.

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MODULE 5: ISSUES OF E – COMMERCE

The rise of e-commerce has brought about numerous benefits, including convenience, broader market
access, and increased business opportunities. However, it also raises several ethical, social, and political
issues that need to be addressed to ensure fair, safe, and equitable use of online platforms.

ETHICAL ISSUES IN E-COMMERCE

1. Privacy and Data Protection:

o Concern: E-commerce platforms collect vast amounts of personal data from users,
including purchasing habits, personal information, and financial details.
o Ethical Dilemma: Balancing the use of data for improving services and marketing
against the rights of users to privacy.
o Action Required: Implementing strong data protection measures, transparent privacy
policies, and obtaining informed consent from users.
2. Security:
o Concern: Online transactions are vulnerable to cyberattacks, including hacking, identity
theft, and fraud.
o Ethical Dilemma: Ensuring robust security measures while maintaining user
convenience.
o Action Required: Investing in advanced security technologies, regular security audits,
and educating users about safe online practices.
3. Consumer Protection:
o Concern: Consumers may face issues such as false advertising, lack of product
information, and fraudulent sellers.
o Ethical Dilemma: Ensuring truthful representation of products and fair treatment of
consumers.
o Action Required: Enforcing strict regulations on advertising, transparent return policies,
and mechanisms for dispute resolution.
4. Intellectual Property Rights:
o Concern: Digital products and content are easily copied and distributed without proper
licensing.
o Ethical Dilemma: Protecting intellectual property while allowing for reasonable access
and use by consumers.
o Action Required: Using digital rights management (DRM) technologies, clear licensing
agreements, and combating piracy.

SOCIAL ISSUES IN E-COMMERCE

1. Digital Divide:
o Concern: Unequal access to the internet and digital technologies creates disparities in
who can participate in e-commerce.
o Social Impact: Marginalized groups and communities may be excluded from the
benefits of e-commerce.
o Action Required: Promoting digital literacy, expanding internet access, and creating
inclusive platforms.
2. Employment and Labour Practices:
o Concern: E-commerce can lead to job displacement in traditional retail sectors and
exploitative labour practices in logistics and delivery services.
o Social Impact: Economic instability for affected workers and poor working conditions
in e-commerce supply chains.
o Action Required: Supporting retraining programs, enforcing fair labour standards, and
ensuring ethical supply chain practices.

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 3. Consumer Behaviour and Social Interaction:
o Concern: The convenience of e-commerce may reduce face-to-face social interactions
and change consumer behaviour.
o Social Impact: Potential decrease in community engagement and changes in shopping
culture.
o Action Required: Encouraging community-based e-commerce initiatives and balancing
online and offline retail strategies.

POLITICAL ISSUES IN E-COMMERCE

1. Regulation and Compliance:

o Concern: E-commerce operates across borders, leading to complexities in regulatory
compliance with different national laws.
o Political Impact: Conflicts between local regulations and global e-commerce practices.
o Action Required: Harmonizing international e-commerce regulations and fostering
cooperation between governments.
2. Taxation:
o Concern: Determining how and where to tax e-commerce transactions, especially those
involving cross-border sales.
o Political Impact: Potential loss of tax revenue for local governments and unfair
competition with traditional retailers.
o Action Required: Developing fair tax policies that address the challenges of digital
transactions and ensure a level playing field.
3. Censorship and Freedom of Expression:
o Concern: Governments may impose restrictions on e-commerce platforms that affect
free speech and access to information.
o Political Impact: Balancing national security and cultural values with the rights to free
expression and information.
o Action Required: Advocating for policies that protect freedom of expression while
addressing legitimate security concerns.
4. Global Trade and E-Commerce:
o Concern: E-commerce influences global trade dynamics and may lead to trade disputes.
o Political Impact: Impact on local economies and international trade relations.
o Action Required: Engaging in international trade negotiations and establishing
frameworks that support fair e-commerce practices.

ETHICAL PRINCIPLES: PRIVACY AND INFORMATION RIGHTS

In the context of e-commerce and digital interactions, privacy and information rights are critical ethical
principles that guide the collection, use, and dissemination of personal data. These principles ensure that
individuals’ rights are protected and respected in an increasingly data-driven world.

PRIVACY

Privacy refers to the right of individuals to control access to their personal information and to be free
from unwarranted intrusion. It encompasses the protection of personal data from misuse and unauthorized
access.

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KEY ASPECTS OF PRIVACY:

1. Consent:
o Individuals should have the right to give or withhold consent regarding the collection and
use of their personal data.
o Consent should be informed, meaning individuals understand what data is being
collected, how it will be used, and with whom it will be shared.
2. Confidentiality:
o Personal data should be kept confidential and not disclosed to unauthorized parties
without the individual’s consent.
o Organizations must implement measures to protect data from breaches and leaks.
3. Data Minimization:
o Only the minimum amount of personal data necessary for a specific purpose should be
collected.
o Unnecessary data collection increases the risk of misuse and breaches.
4. Access and Control:
o Individuals should have the right to access their personal data and correct any
inaccuracies.
o They should also be able to control how their data is used and request its deletion when it
is no longer needed.
5. Transparency:
o Organizations should be transparent about their data collection practices, providing clear
and accessible privacy policies.
o Individuals should be informed about how their data is being used and for what purposes.

INFORMATION RIGHTS

Information rights pertain to the entitlements individuals have regarding their personal information and
its protection. These rights are often enshrined in laws and regulations to ensure that individuals can
exercise control over their data.

KEY INFORMATION RIGHTS:

1. Right to Be Informed:
o Individuals have the right to be informed about the collection and use of their personal
data.
o This includes clear information on what data is collected, how it is used, and the legal
basis for processing.
2. Right of Access:
o Individuals can request access to their personal data held by organizations.
o They have the right to obtain a copy of the data and understand how it is being
processed.
3. Right to Rectification:
o Individuals have the right to have inaccurate or incomplete personal data corrected.
o Organizations must address rectification requests promptly.
4. Right to Erasure (Right to Be Forgotten):
o Individuals can request the deletion of their personal data when it is no longer necessary
for the purpose for which it was collected, or if they withdraw their consent.
o Organizations must comply unless there are compelling legal grounds for retaining the
data.
5. Right to Restrict Processing:
o Individuals can request that their data be restricted from processing under certain
conditions, such as when the accuracy of the data is contested.

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 o Restricted data should only be processed for specific purposes, such as legal claims.
6. Right to Data Portability:
o Individuals have the right to receive their personal data in a structured, commonly used,
and machine-readable format.
o They can also request that their data be transferred to another organization.
7. Right to Object:
o Individuals can object to the processing of their personal data based on legitimate
interests or direct marketing purposes.
o Organizations must respect the objection unless there are compelling legitimate grounds
for the processing.

IMPLEMENTING PRIVACY AND INFORMATION RIGHTS

To uphold privacy and information rights, organizations should adopt the following practices:

1. Develop Clear Privacy Policies:

o Create comprehensive privacy policies that outline data collection, use, and protection
practices.
o Make these policies easily accessible to users.
2. Obtain Informed Consent:
o Ensure that consent is obtained in a transparent manner and that users understand what
they are consenting to.
o Provide easy-to-understand consent forms and options.
3. Implement Strong Security Measures:
o Use encryption, access controls, and regular security audits to protect personal data from
breaches and unauthorized access.
o Train employees on data protection practices.
4. Provide User Control:
o Give users control over their data through account settings, preference centres, and clear
opt-out mechanisms.
o Honor user requests for data access, correction, and deletion promptly.
5. Ensure Accountability:
o Assign data protection officers and establish governance frameworks to ensure
compliance with privacy laws and regulations.
o Conduct regular privacy impact assessments.

ISSUES OF E-COMMERCE

E-commerce has revolutionized the way businesses operate and how consumers shop. However, it also
presents several challenges that need to be addressed to ensure sustainable growth and trust in digital
marketplaces. Here are some of the key issues in e-commerce, discussed in detail.

1. SECURITY AND PRIVACY

SECURITY CONCERNS:

• Cyberattacks: E-commerce platforms are prime targets for cyberattacks, including hacking,
phishing, and Distributed Denial of Service (DDoS) attacks. These can lead to data breaches and
significant financial losses.
• Payment Security: Ensuring the security of online payment systems is critical. Vulnerabilities in
payment processing can lead to fraud and identity theft.

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PRIVACY CONCERNS:

• Data Protection: E-commerce companies collect vast amounts of personal data. Protecting this
data from unauthorized access is paramount.
• User Consent: Obtaining informed consent from users for data collection and ensuring
transparency about how their data will be used is essential.

2. LEGAL AND REGULATORY ISSUES

COMPLIANCE:

• International Laws: E-commerce often involves cross-border transactions, making compliance

with various international laws and regulations complex.
• Consumer Protection: Ensuring compliance with consumer protection laws, such as accurate
product descriptions and honoring return policies, is crucial.

TAXATION:

• Sales Tax: Determining how and where to collect sales tax for online transactions can be
challenging, especially for international sales.
• Regulatory Variations: Different regions have varying tax laws, creating a complex landscape
for e-commerce businesses.

3. LOGISTICS AND SUPPLY CHAIN MANAGEMENT

CHALLENGES:

• Timely Delivery: Ensuring timely and accurate delivery of products is a major challenge,
especially for international shipments.
• Inventory Management: Managing inventory efficiently to avoid overstocking or stockouts is
critical for maintaining profitability.

SOLUTIONS:

• Advanced Technologies: Implementing technologies like AI and blockchain can improve supply
chain transparency and efficiency.
• Partnerships: Collaborating with reliable logistics partners can help streamline the delivery
process.

4. CUSTOMER TRUST AND SATISFACTION

TRUST ISSUES:

• Product Quality: Ensuring that products meet the quality expectations set by online descriptions
and images is essential to build trust.
• Fake Reviews: Addressing the problem of fake reviews and testimonials is crucial for
maintaining credibility.

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SATISFACTION:

• Customer Service: Providing excellent customer service, including easy return processes and
responsive support, is vital for customer satisfaction.
• User Experience: Ensuring a seamless and user-friendly website or app experience is key to
retaining customers.

5. DIGITAL DIVIDE AND ACCESSIBILITY

DIGITAL DIVIDE:

• Access to Technology: Not all consumers have access to the technology or internet needed to
participate in e-commerce.
• Literacy and Skills: Digital literacy and skills vary widely, affecting individuals' ability to
engage in online shopping.

ACCESSIBILITY:

• Inclusive Design: E-commerce platforms need to be designed to be accessible to all users,

including those with disabilities.
• Localized Services: Providing services in multiple languages and adapting to local cultural
preferences can enhance accessibility.

6. ETHICAL ISSUES

FAIR PRACTICES:

• Labour Practices: Ensuring fair labour practices in the supply chain, including addressing issues
like sweatshop labour, is an ethical imperative.
• Environmental Impact: E-commerce businesses need to consider the environmental impact of
packaging and shipping.

TRANSPARENCY:

• Advertising: Ethical advertising practices, including honest product descriptions and clear terms
of service, are essential.
• Data Use: Transparent data use policies and practices help build consumer trust and avoid ethical
pitfalls.

PRIVACY POLICY

A privacy policy is a document through which a company makes available to its clients (and any other
person who visits its website) information on how their personal data will be used, the purpose for which
this data will be used, whether it will be shared with third parties and other aspects that might be pertinent
to reach an adequate level of transparency.

LEGAL PROTECTION S INTELECTUAL PROPERTY RIGHTS

Inventors, designers, developers and authors can protect the ideas they have developed,
for instance by means of copyright or patents. The aim is to prevent others from wrongly profiting from
their creations or inventions. It also gives them an opportunity to earn back the money they invested in

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developing a product. Intellectual Property Rights (IPR) in India are protected through various laws and
regulations.

1. Patents: In India, patents are governed by the Patents Act, 1970, and the Patents Rules, 2003. The
Indian Patent Office (IPO) administers the patent system in the country. Patent protection is granted for
inventions that are new, involve an inventive step, and are capable of industrial application. The term of a
patent in India is 20 years from the date of filing the application.

2. Trademarks: The Trade Marks Act, 1999, and the Trade Marks Rules, 2017, regulate trademarks in
India. The Controller General of Patents, Designs, and Trademarks, under the Department for Promotion
of Industry and Internal Trade (DPIIT), is responsible for trademark registration and administration.
Trademark protection is granted for distinctive signs, logos, symbols, etc., used to distinguish goods or
services of one entity from another.

3. Copyrights: Copyright protection in India is governed by the Copyright Act, 1957, and the Copyright
Rules, 2013. The Copyright Office, under the Ministry of Education, is responsible for copyright
registration and enforcement. Copyright protection is granted for original literary, dramatic, musical, and
artistic works, as well as cinematographic films and sound recordings. The term of copyright protection
varies depending on the type of work but generally lasts for the lifetime of the author plus 60 years.

4. Designs: Designs in India are protected under the Designs Act, 2000, and the Designs Rules, 2001.
The Controller General of Patents, Designs, and Trademarks administers the design registration system.
Design protection is granted for new or original designs applied to articles of industrial application.

5. Geographical Indications (GI): The Geographical Indications of Goods (Registration and Protection)
Act, 1999, and the Geographical Indications of Goods (Registration and Protection) Rules, 2002, govern
the protection of geographical indications in India. The Geographical Indications Registry, under the
Ministry of Commerce and Industry, handles the registration and protection of GIs.

6. Trade Secrets: Although India does not have specific legislation for trade secret protection, trade
secrets are protected under common law principles and through contractual agreements, such as non-
disclosure agreements (NDAs) and confidentiality clauses. Enforcement of IPR in India involves both
civil and criminal remedies, including injunctions, damages, fines, and imprisonment for infringement.
Additionally, India is a member of various international agreements related to intellectual property, such
as the Agreement on Trade Related Aspects of Intellectual Property Rights (TRIPS), administered by the
World Trade Organization (WTO).

E-GOVERNANCE

E-Governance, or electronic governance, refers to the use of digital technologies, particularly the internet,
to deliver government services, engage citizens, and improve the efficiency and effectiveness of
governmental processes. It encompasses a wide range of activities aimed at transforming the traditional
governance model into a more transparent, accountable, and inclusive one.

OBJECTIVES OF E-GOVERNANCE

1. Enhancing Public Service Delivery:

o Improve the accessibility, efficiency, and quality of public services.
o Enable citizens to access services anytime and anywhere.
2. Promoting Transparency and Accountability:

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 o Provide citizens with easy access to government information.
o Reduce corruption by making government processes more transparent.
3. Citizen Participation:
o Engage citizens in the decision-making process through digital platforms.
o Encourage feedback and collaboration between the government and the public.
4. Improving Administrative Efficiency:
o Streamline government operations and reduce bureaucracy.
o Utilize technology to automate processes and improve coordination between
departments.

KEY COMPONENTS OF E-GOVERNANCE

1. Government-to-Citizen (G2C):
o Services provided by the government to the citizens.
o Examples: Online tax filing, e-visa applications, digital health records.
2. Government-to-Business (G2B):
o Interactions between the government and the business community.
o Examples: Online business registration, e-procurement systems, digital compliance and
reporting.
3. Government-to-Government (G2G):
o Cooperation and information sharing between different government entities.
o Examples: Inter-departmental data sharing, integrated public service platforms.
4. Government-to-Employee (G2E):
o Services and information provided by the government to its employees.
o Examples: Online payroll management, employee training portals, digital HR services.

BENEFITS OF E-GOVERNANCE

1. Increased Efficiency:
o Automating and digitizing processes reduces paperwork and administrative burdens.
o Speeds up service delivery and reduces wait times for citizens.
2. Cost Savings:
o Reduces the cost of delivering services by minimizing physical infrastructure and
resources.
o Enhances resource management and budget allocation.
3. Improved Transparency:
o Digital records and online access to information make government actions more visible
to the public.
o Reduces opportunities for corruption and fosters trust in government institutions.
4. Better Accessibility:
o Ensures services are accessible to all citizens, including those in remote areas.
o Provides 24/7 access to government services through online platforms.
5. Enhanced Citizen Engagement:
o Encourages public participation in governance through online forums, surveys, and
social media.
o Facilitates a two-way communication channel between citizens and the government.
6. Data-Driven Decision Making:
o Enables governments to collect and analyse data to inform policy and decision-making.
o Helps in identifying trends, addressing issues, and improving public services.

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SKILL DEVELOPMENT QUESTIONS

LIST ANY SIX ORGANIZATIONS USING E - COMMERCE

➢ AMAZON
➢ WALMART
➢ ALIBABA
➢ NETFLIX
➢ OLA
➢ SWIGGY

LIST ANY SIX ADVANTAGES OF E- COMMERCE

✓ Global reach
✓ 24/7 Availability
✓ Lower operational costs
✓ Convenience
✓ Better Inventory Management
✓ Enhanced Customer Insights

LIST ANY SIX ELECTRONIC PAYMENT SYSTEMS

 Unified payment interface (UPI)

 Mobile wallets
 National Electronic Funds Transfer (NEFT)
 Credit cards
 Debit cards
 Bank transfers
 Crypto currency

LIST ANY SIX PROTECTIONS GIVEN UNDER IPR FOR E - COMMERCE FIRMS

❖ Patents
❖ Trademarks
❖ Copyright
❖ Industrial design
❖ Domain names
❖ Trade secrets
❖ Design rights

LIST ANY SIX ISSUES IN E-COMMERCE

 Cyber security threats

 Privacy concerns
 Fraud & scams
 Technical glitches
 Customer service challenges
 Payment processing issues

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