Electronic Commerce: Big Changes in the Business World

E-Commerce Defined

Electronic commerce (e-commerce) is defined as any form of business transaction in which the parties interact electronically rather than by physical exchanges or direct physical contact.

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Electronic commerce is a means of enabling and supporting bigger changes in the business world on a global scale. It enables companies to be more efficient and flexible in their internal operations, to work more closely with their suppliers, and to be more responsive to the needs and expectations of their customers. It allows companies to select the best suppliers regardless of their geographical location and to sell to a global market.

One special case of electronic commerce is electronic trading, in which a supplier provides goods or services to a customer in return for payment. A special case of electronic trading is electronic retailing, where the customer is an ordinary consumer rather than another company. However, while these special cases are of considerable economic importance, they are just particular examples of the more general case of any form of business operation or transaction conducted via electronic media. Other equally valid examples include internal transactions within a single company or the provision of information to an external organization without charge.

Boundaries and Limitations of E-Commerce

Despite the early technological limitations of the Internet, companies were still quick to recognize the value of the Internet and the World Wide Web in particular as a medium to reach out to customers all over the world (Hoque, 2000).

The impact of electronic commerce will be pervasive, both on companies and society as a whole. For those companies that fully exploit its potential, electronic commerce offers the possibility of breakpoint changes – changes that so radically alter customer expectations that they re-define the market or create entirely new markets. All other companies, including those that try to ignore the new technologies, will then be impacted by these changes in markets and customer expectations. Equally, individual members of society will be presented with entirely new ways of purchasing goods, accessing information and services, and interacting with branches of government. The choice will be greatly extended, and restrictions of geography and time eliminated. The overall impact on lifestyle could well be comparable to, say, that of the growth in car ownership or the spread of the telephone.

The boundaries of electronic commerce are not defined by geography or national borders, but rather by the coverage of computer networks. Since the most important networks are global in scope, electronic commerce enables even the smallest suppliers to achieve a global presence and to conduct business worldwide.

E-Commerce Security

Security is by far the biggest concern surrounding online transactions, with consumers worrying that hackers will get into their accounts and spend their money (The Pros and the cons, 2004). Credit cards are prone to security issues, especially when it comes to online transactions. The details found in credit cards aren’t embedded insecure channels. Anyone who manages to intercept the data found on your credit card can easily use your line of credit for their purposes. As a result, making you suffer for the mistakes that you have never done (The Pros and Cons of Using a Credit Card, 2006).

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Since the Internet is a public network, it is necessary for the businesses offering e-commerce sites to safeguard the company’s and the consumers’ banking information, credit card numbers, Social Security number, and other information (What you should know about internet banking, 2007).

Criminals don’t always need to have shotguns and masks to threaten and rob money; it only takes a social security number, or a pre-approved credit card application from trash to make things according to their wicked way (ID Theft, 2004). Some consumers have had credit card numbers and Social Security numbers stolen and used fraudulently or identity theft. By taking reasonable steps to protect important personal information, can mitigate the chance that it may be stolen (What you should know about internet banking, 2007) by identity thieves.

Credit card numbers, driver’s license numbers, social security numbers, date of birth, and other personal identification can net criminals thousands of dollars in a very short time. Most often, identity thieves will obtain your identification numbers and obtain credit in your name by having credit cards, goods, or services delivered to their address or mail drop. Since the bills for charges incurred are sent to the thief’s address, the consumers will be unaware that debt is mounting up in their name until the collections department tracks them down (McGoey, 2007).

With all these concerns on internet security, there are several approaches and step to consider while starting up an e-commerce site.

The first is creating a catalog. In the e-catalog, goods are presented as images with text descriptions, prices, and product options. Any e-commerce definition would have to include an understanding of databases. Instead of “printing” each product web page uniquely, only one page is made and filled in by a database. This means that instead of a thousand pages for a thousand products, one page only is used – called a template. The template has empty places in it (like a picture space, a price space, a description space, etc.) that are filled in from the database. The information needed to call the right information into the placeholders is contained in the link to the product.

It is also necessary to create a navigation system. Typically the first set of links will be product categories and will build a list of individual items in that category, like links. These links in turn will call the exact product within the template page. This system is called drilling down.

When a visitor clicks the buy button, the product id number is placed in her shopping basket. This is a space in the computer’s memory created especially for this user. Additional commands can add or delete numbers in this space until the visitor is ready to purchase. When the visitor proceeds to the checkout, her details are moved from the temporary memory space into an empty part of the database, along with a list of what she is buying, the prices, options, etc.

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And, of course, there are the terms of payment. There are several methods of making online payments, all involve a secure socket layer (SSL). Once captured, the credit card number is stored for retrieval later to be processed through ordinary PDQ facilities (swiping machine or telephone), or cleared over the Internet by a specialist-clearing house that contacts the visitors’ bank.

After the payment is cleared online, the clearinghouse will send your website confirmation so that a receipt and/or order confirmation can be automatically generated for the customer. This can be done by writing an online program that runs on the web server.

The final part of our e-commerce definition deals with alerting the website owner that an order has been placed. This can be done by providing a control panel on the website where new entries in the database are displayed, or simply by sending an e-mail with the information on it to a regular inbox. If the information is going to include a credit card number, then a control panel page on a secure socket layer (SSL) must be used, as e-mail is not secure.

The website owner may want to provide his customer with order tracking facilities. This is done by simply adding a message to the database record and sending the client a unique id number that allows her access to only her record set.


Indeed, there is a bigger marketing opportunity for different e-commerce businesses! Once more and more consumers get to put high trust in the processes involved in e-commerce, sure more and more companies will invest in putting up their e-commerce.

And how can e-commerce earn the trust of consumers? It is strongly believed that putting up stricter, specific, and better-defined rules in logging in to an e-commerce site coupled, with a more privatized and hacker-free site to log in the credit card number of consumers for the payment, will help enhance the consumers’ trust on e-commerce. In addition to this, strategic marketing plans such as adding promotional and gimmick items for a purchased product through e-commerce or by giving out discount prices will help increase the consumers’ trust in the business companies offering services through e-commerce.


  1. Hoque, Faisal. E-Enterprise _ Business Models, Architectures and Components. Cambridge University Press. 2000.
  2. Definition of E-Commerce. 1997. Internet Business, Interest Verlag, Germany Augsburg.
  3. E – Commerce Definition. 2003. Web.design.uk-bitz. Web.
  4. E-Commerce and Internet Business Statistics. 2001. Plunket research Inc.
  5. May, Paul. The Business of E-Commerce. Cambridge University Press. 2000.
  6. McGoey, C. (2007).Identity Thefts Facts: Fastest Growing Crime World.
  7. The Pros and Cons of Using a Credit Card. (2006). Ezilon infobase.
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