Businesses are constantly seeking ways to increase their efficiency and profit margins. Technological solutions are one way that businesses can achieve these goals. E-commerce and m-commerce have emerged as some of the technologies that businesses can employ to achieve increased productivity. This paper sets out to discuss electronic and mobile commerce and the manner in which it has impacted businesses and consumers.
It addresses the threats inherent in the technologies and how they can be mitigated to ensure that electronic and mobile commerce remains beneficial to the society. It starts by defining e-commerce and m-commerce the proceeds to highlight some of the important attributes of these technologies. It then delves into the impacts that the technologies have had on businesses and consumers. The threats facing e-commerce and m-commerce are highlighted and some of the ways in which they can be mitigated provided. It concludes by stating that the technologies will have a positive role in the economy as long as the threats identified are effectively addressed.
Since pre-historic times, the human race has engaged in commercial activities. While the ways in which this activity takes place have changed over the millenniums, commerce is still an integral part of modern human civilization. Humans are always looking for more efficient ways to facilitate trade in goods and services. Attempts have been made to incorporate the technological advances made in the 20th century into commercial activities. Specifically, the internet and mobile technologies developed and enhanced over the past four decades have been adopted for business purposes. These technologies have led to tremendous changes in the manner in which business is conducted.
Two novel technologies that make use of the internet and mobile technologies for commercial purposes are electronic commerce and mobile commerce. These technologies allow users to conveniently engage in the selling and buying of products via the internet. This paper will set out to discuss electronic and mobile commerce and the manner in which it has impacted businesses and consumers. It will address the threats inherent in this technology and how they can be mitigated to ensure that electronic and mobile commerce remains beneficial to the society.
Defining Electronic and Mobile Commerce
E-commerce is defined as any process that entails exchanging ownership of or rights to use goods and services via electronically linked devices that communicate interactively within networks (VanHoose, 2011). A key consideration in e-commerce is that the devices used to access the network are wired. These devices include computer, laptops, and notebooks. For an activity to qualify as e-commerce, it has to involve the buying or selling of goods or services. E-commerce enables businesses and users alike to take advantage of the power and efficiency of computing devices linked up to a network. Businesses have set up e-commerce sites that provide products and services to users. Consumers are able to visit such sites and purchase the products and services.
M-commerce is simply electronic commerce implemented via mobile communicating devices. M-commerce has been made possible by the significant advances in telecommunication technologies that have enabled mobile communication devices to access the internet at adequate speeds. The mobile devices are now capable of processing information quickly and running a number of applications in the same way that PCs do. By allowing users to access the internet through their mobile devices, telecom companies have facilitated a wide array of business activities, which are carried out without the need for a wired network. Alqatan, Singh and Ahmad (2011) reveal that businesses are able to engage in sales, marketing, and advertisement functions using mobile devices. The number of devices that can be used for m-commerce is wide and it includes smart phones, PDAs, and tablets.
Attributes of E-Commerce and M-Commerce
A significant attribute of e-commerce and m-commerce is that they improve efficiency and decrease costs of engaging in commercial activities. Businesses are able to make online sales initiated and completed by the consumer (Lendle & Olarreaga, 2012). This process is efficient since it is automated and relies on programming code written for the business. The risk of error is limited since there is no human intervention in the process. The consumer is able to access easily browse through the catalogue of products provided by the business and make a purchase.
Another attribute of e-commerce and m-commerce is that they have broad reach all over the world. Over the past two decades, the world has witnessed an explosion in the number of mobile and computing devices owned by the population. The cost of computers and mobile devices has decreased making them accessible to most people in the world. At the same time, technological advances have led to the development of high speed data connections for both wired and wireless networks. Zwass (2012) reveals that there are billions of personal computers in use all over the world and billions of mobile communication devices. Most of these devices have access to the internet meaning that they are equipped to facilitate e-commerce activities.
These technologies support interactivity when buying goods or services. Users of e-commerce and m-commerce services rely on web applications to carry out their activities. Botha (2008) reveals that interactivity is fundamental to the aspect of these technologies since it provides a way for consumers to make known their unique needs. Once the users have done this using any of the input methods allowed on the e-commerce site, the business can address the specific requirements on a unique one-to-one basis.
An attribute unique to m-commerce is that this technology allows users to engage in transactions while moving. Since this technology does not rely on wired networks, the individual does not have to be stationary while engaging in commerce (Alqatan, et al., 2011). Instead, he/she can use his/her mobile device to sell or buy goods from any location. Most mobile phones are equipped with locating technologies such as GPS, which make it possible for a user to access location-relevant information for commercial purposes.
Impact on Business
E-commerce and m-commerce technologies have had some significant impacts on businesses. To begin with, they have significantly reduced the operational costs incurred by businesses. By automating the transaction process, these technologies have significantly reduced the administrative costs. A company no longer needs to employ many cashiers or shop attendants to serve the customer. The costs for information gathering have also been reduced since the customer inputs most of the data from the client application running on his/her mobile device or though the business website.
M-commerce and e-commerce make it possible for a business to save costs by reducing the need to invest in physical infrastructure needed for business. Saeed and Kiomars (2012) note that companies no longer have to invest in expensive physical structures such as retail shops and buildings or infrastructure such as parking facilities for customers. M-commerce and e-commerce therefore lead to savings on items such as rent and physical infrastructure, which would be necessary in traditional businesses.
Another significant impact of these technologies is that they enlarge the market scope of a business. With just a single website, a business can advertise its goods and services to prospective customers from all over the world. The reach of even simple businesses is no longer confined to small geographical locations. Niranjanamurthy (2013) asserts that m-commerce and e-commerce open up new markets for the businesses. Since the business is located remotely, users from any location can access it through the internet. A study by Lendle and Olarreaga (2012) revealed that physical distance is not important when a business is using e-commerce or m-commerce.
These technologies make it possible for modestly sized business to gain entry into a given market by reducing market barriers. An aspiring entrepreneur must overcome a number of significant barriers before entering into business. These barriers to entry include capital requirements, government regulations, and competition from established businesses (Saeed & Kiomars, 2012). E-commerce and m-commerce reduce these entry barriers by first of all overcoming the fixed capital requirements. The business does not need physical buildings to begin the activity and this greatly reduces the capital requirements. In addition to this, the internet reduces the advertisement costs by making it cheap for a business to disseminate information about its presence and products to consumers.
Finally, these technologies impact business by intensifying competition. As noted, m-commerce and e-commerce reduce entry barriers to business leading to the presence of a large number of retailers offering similar products. In addition to this, the technologies make it easy for the consumers to compare princes online across a number of sellers (Botha, 2008). The competition among businesses is therefore intensified as they all try to gain a greater share of the market. The large choice of suppliers available to the consumers means that each business has to provide better products or lower its prices in order to have a competitive advantage.
Impact on Consumers
The first major impact of e-commerce and m-commerce on consumers is that it has led to better and greater access to product information and pricing. Consumers are able to learn about a wide array of goods and services provided by the e-businesses. In addition to this, the consumer is able to easily compare prices since the price information is provided by businesses in their websites. Balwinder (2014) reveals that consumers have access to many different items which can be viewed by simply clicking on a link.
E-commerce and m-commerce has led to time savings by the consumer since he/she is able to engage in shopping activities at his/her convenience. The consumer does not have to physically visit the store to purchase products. Instead, he/she can use a computing device to carry out commercial activities from any place and at any time. Balwinder (2014) notes that the user convenience is increased since the electronic stores are open at all times. For this reason, consumers do not suffer from the store-timing inconveniences that are common in traditional stores.
Finally, m-commerce and e-commerce has led to an improvement in consumer welfare by reducing product delivery time. This is especially evident when dealing with products that can be provided via the internet. Consumers are able to order products such as videos, music, and software and have them delivered instantly through digital downloads (Kiku & Lori, 2014). Such distribution channels lead to instant customer satisfaction as the product is received within seconds or minutes of being paid for. A person is therefore able to enjoy the product immediately, thanks to m-commerce and e-commerce technologies.
Threats to Electronic and Mobile Commerce
Transaction security presents the most significant threat to e-commerce and m-commerce. A transaction is the most important part of a business operation and it involves exchanging money for goods or services. This process has to be completed for a business deal to go though. In non-electronic commerce, the security of the transaction is assured since the customer hands the physical money to the seller who in return offers the product or service paid for. In e-commerce and m-commerce transactions, the consumer has to entrust confidential payment to the e-commerce website and this information has to travel through the internet (Botha, 2008).
Security threats exist for the confidential information might be stolen while travelling to the e-business or even from the e-business servers. Concerns about the security of the transaction have caused many potential consumers to avoid using e-commerce and m-commerce applications for their business needs.
E-commerce and m-commerce are also threatened by storage security issues. Since all operations occur electronically, there has to be records of the transactions. In addition to these records, the business might maintain information on the customer’s purchasing history and other information to help personalize the user experience while on the e-commerce website. The information maintained by the business is mostly of a confidential nature and the customers who provide it regard it as private information (VanHoose, 2011). There is a risk that the information might be stolen following a breach in the website database security. Hackers can attack the server sites and obtain access to this information. Many customers are cautious about using e-commerce and m-commerce technologies as a result of this threat.
In addition to this, e-commerce and m-commerce platforms face a threat due to their high reliance on e-commerce websites. There websites, which are maintained by the business owners, are the core of the system and if they fail the entire e-commerce transaction fails. Issues such as download speeds and website availability are critical to the success of the e-business. Niranjanamurthy (2013) notes that if the website suffers from disruption, even for a few minutes, it will cost the business significant losses. In addition to this, the disruptions lead to major customer dissatisfaction and this is harmful to the business.
Another significant threat that e-commerce and m-commerce faces is from phishing attacks. These kinds of attacks take advantage of the fact that e-commerce and m-commerce rely heavily on business websites to operate. Zwass (2012) warns that businesses operating websites are at risk of being subjected to phishing attacks, which expose consumers to identity fraud. The attackers try to lure potential customers into visiting fake websites that are designed to look like the legitimate e-commerce website. The fake website provides products and services that don’t exist. The user is then requested to provide confidential information such as credit card numbers to complete a transaction. When he does this, the attackers steal the information and use it to engage in identity fraud or steal money from the use’s account.
Finally, users are exposed to a number of internet security issues when they use e-commerce and m-commerce technologies for business activities. Viruses and malware present a significant threat to users as they make use of the internet for commercial purposes (Kiku & Lori, 2014). The viruses may infect the e-commerce website and proceed to infect any customer who visits the site. Once the customer’s individual computing device is infected, the virus might interfere with the operations of the device or corrupt the user files. Virus attacks are disruptive and recovering from the virus attack often costs the user significant amounts of money.
Addressing the Threats
Dealing with the threats identified is mandatory for e-commerce and m-commerce technologies to function successfully. The security threats can be managed in a number of ways. E-business operators should employ sufficient technology for secure business to client communication. Specifically, the electronic transactions should make use of the most advanced encryption technologies to ensure that the information is safe. By encrypting credit card numbers and other personal electronic data, it becomes useless to an unauthorized interceptor who might highjack it (Kesavan, 2014). Once users are sure that their payment information is safe, they will be more willing to engage in e-commerce and m-commerce activities.
The threat to the stored data can be mitigated by securing the business databases. Broers (20110 suggests that e-commerce website should be secured using firewalls to prevent unauthorized access. In addition to this, the business should make use of authentication processes to ensure that only authorized personnel can access the privileged information. Such security measures will increase customer trust and promote e-commerce activities. The lack of public confidence in the security implementation of many e-commerce websites has impeded the widespread adoption of e-commerce and m-commerce.
Ensuring constant and optimal performance of the website is also important. Studies show that download delays are a major problem, second only to security threats (Balwinder, 2014). Delays and disruption of web services lead to user frustration and dissatisfaction. E-businesses can deal with these issues by creating websites that user content optimized for the web. In addition to this, high performance technical equipment such as high end servers and large bandwidth can help increase system performance.
Users should take appropriate action to protect themselves against the virus and malware threats. This can be achieved by making use of antivirus and anti-malware programs (Broers, 2011). Such programs contain definitions of a wide list of viruses and malware and protect the user’s system from these malicious elements. The user should regularly update the products to make sure that the virus and malware definitions are up to date. By doing this, the user can engage in e-commerce and m-commerce activities without exposing himself/herself to this online threats.
The business community is rapidly adopting e-commerce and m-commerce technologies to enhance productivity. This paper set out to discuss these novel technologies and the impacts they have on businesses and consumers. It also sought to access the threats to the technologies and ways in which they can be mitigated. The paper began by acknowledging the widespread adoption of technological solutions by businesses and consumers in the 21st century. It then highlighted some of the attributes that make e-commerce and m-commerce especially beneficial for commercial activities.
The paper observed that the technologies have had tremendous impacts on businesses and consumers. These impacts are mostly positive and they are therefore likely to entice more businesses and consumers to adopt m-commerce and e-commerce. The paper then discussed the security and privacy threats that are inherent in e-commerce and m-commerce. A review of some of the solutions to these threats was then provided. Mitigating the threats to e-commerce and m-commerce will ensure that the technologies continue to play a positive role in the economic prosperity of countries.
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