Introduction
Electronic
commerce (E-commerce) is used by businesses to correspond and negotiate with
customers through the Internet. Steinberg explains, this way of business allows
the customer to view more options of possible purchases and read other customer
reviews to get a better idea of whether the product is worth the purchase
(Steinberg 2008). There are many success factors in E-commerce, but there are
also some challenges in the way.
E-commerce is
successful because it provides an easy way to conduct business. Everything is
easily accessed on the Internet and electronic transactions are made possible
through it. It’s also successful because it saves the customer from having to
drive somewhere to make purchases (and saves them gas). A lot of the challenges
that could get in the way of this success are a part of Internet fraud. This
paper will later go over the security issues and challenges that can be
overcome by awareness and caution.
Current Use
Currently
there are five different types of e-commerce. Business to Business (B2B) is the
commercial relations between businesses. E-commerce allows many types of
financial transactions between these companies to occur. The use of electronic
funds transfer and electronic data interchange are extremely important in B2B operations.
According to Wang, “prior research has shown that the adoption and performance
of B2B e-markets is driven by efficiency and legitimacy within the industry”
(Wang 2012). Business to Consumer (B2C) is the type of e-commerce when customers
place an order on products from a business. Customer to Customer (C2C), as
Steinberg put it, is the”yard sale of the Internet” (Steinberg 2008). Great C2C
examples usually use a type of intermediary. This helps customers find other
customers and gives them a way for payment to be made. Also, an option for
delivery is made available. The best example for C2C would be the website eBay
(an auctioning website). Steinberg explains Business to Government as a way for
“businesses to sell products and services to governments as they do to other
businesses” (Steinberg 2008). Citizen to Government is a way for citizens to
make transactions with the government through “license renewal, tax payment,
and worker compensation claim filing” (Steinberg 2008).
Supporting
applications are extremely helpful in e-commerce. Shopping cart is an
application that showcases merchandise to customers that click on products they
are interested in purchasing in a shopping cart before checkout. Payment
systems are necessary in e-commerce in order to receive a form of payment.
Inventory management is used to restock inventory just in time to carry out
customer demand while lowering the cost of bringing in inventory (Steinberg
2008). On the topic of the importance of e-commerce Sperdea states, “The electronic
commerce servers are a complex and vital resource for many critical business
applications” (Sperdea 2011). The current use of e-commerce is clearly popular
and beneficial which has lead to its success.
Security
A
reliable and secure processing atmosphere needs to be provided. The https
protocol provides secure transactions over the Web. Protection is necessary
when conducting e-commerce. Firewalls and anti-virus software should be used in
order to establish some protection and database backup should be performed regularly
(Steinberg 2008). Also, customers need to be aware of the precautions to take
in order to avoid any kind of Internet fraud.
Because
of the success in e-commerce it is important to make sure everything is secure.
According to Aghdaie trust is an important factor. “Especially when a business
is run in an uncertain environment, the business transactions require trust
factors. Trust in electronic commerce is a confidence level that shows how a
trustor’s intentions and actions are perfect during an interaction. A client
should believe that online transactions are consistent with his/her beliefs and
expectations” (Aghdaie 2011). A stable trustworthy security should be in place
in order for the customer to feel they can trust the Website and make a
purchase.
Ethical and Social Challenges
It
can be hard to tell if something is truly secure, according to Steinberg, “so
called secure transactions are not fully secure, since the information is
decrypted to standard text in order to process it” (Steinberg 2008). That is
when credit card information can be stolen. Phishing targets large businesses
because they have a wide customer base which would allow it to be more likely
that an actual customer receives the spam email. Some customers end up believing
it's an actual email from the site it is pretending to be and hand over
information to questions such as "What is your account ID and
password?" (Steinberg 2008).
Pharming
is the misuse of vulnerability in domain name servers that allows traffic to a
Web site to be redirected to another Web site. This is something to be
concerned about because if the Web site is a fraudulent copy of the original
one it has been redirected from it can use phishing or steal a computer ID
number or account number and passwords. Spam overflows the Internet with
multiple copies of the same message. It’s an attempt to force a message onto
people who would not want to receive it. Spam is mostly commercial advertising
but can also be for “get-rich-quick schemes” (Steinberg 2008).
What to Consider when Using E-commerce
If
anyone from a business to a customer is considering using any form of
e-commerce they should first consider the success factors and the challenges
they could run into. The most positive reason e-commerce is incredibly useful
is that it allows a way to make electronic payments. Other successes in using
e-commerce are that it allows customers to view multiple options for purchases
and customer reviews to help them make a decision on a purchase.
Unfortunately
every good thing needs a challenge. The Challenges (stolen credit cards,
phishing, pharming, and spam) do create many hurdles toward the success of
e-commerce, but can be avoided if the right steps are taken toward protection.
Security is a big key factor in helping workout the challenges, but customers
need to be aware of phishing, pharming, spam, etc. If they know what these
examples look like and know the right steps to take to avoid them they could
overcome these challenges. Businesses and Customers need to know about these
challenges in order to protect themselves from being victims of these.
Conclusion
The
usage of e-commerce keeps growing because of its success. Sperdea explains,
“The overall results provide strong evidence for the advantages of electronic
commerce to commercial parties, the mind share in e-commerce business, the
natural growth of Internet commerce, the rise of the e-commerce world, and the
emergence of e-commerce” (Sperdea 2011). These results show how the usage is
improving and growing and just how useful e-commerce is. These advantages
outweigh the challenges because e-commerce is an excellent technology that is
incredibly useful, but the challenges are still something to consider.
Bibliography
Aghdaie,
F., Fathi, S., & Piraman, A.. (2011). Factors affecting the attitude of
trust in internet purchasing from the perspective of consumers. Interdisciplinary Journal of Contemporary
Research In Business, 3(5), 208-221. Retrieved May 25, 2012, from
ABI/INFORM Global. (Document ID: 2513840561)
This journal
article explores the issues of trust and how it affects purchases on the
Internet. It reveals that in order for
success in e-commerce the customer's trust is needed.
Sperdea, N.,
Enescu, M., & Enescu, M.. (2011). Challenges of managing e-commerce. Economics, Management and Financial Markets,
6(2), 194-199. Retrieved May 25, 2012, from ABI/INFORM Global. (Document
ID: 2429761351).
This article
reveals most challenges that are brought up in e-commerce. The focus is on
the start of e-commerce, the regulation
of e-commerce, legal problems arising through the
use of e-commerce, and the eruption of the
law of e-commerce.
Steinberg, G. (2008). Introduction to
computer information systems. Dubuque, IA: Kendall/Hunt Publishing Company.
pp. 421-446.
This textbook
has an entire chapter on e-commerce. It is very informative and goes over most
of the information I need for this paper.
Wang, S., Mao,
J., & Archer, N.. (2012). On the performance of B2B e-markets: An analysis
of organizational capabilities and market opportunities. Electronic Commerce
Research and Applications: Special Issue: CAT Tournament, 11(1), 59-74.
Retrieved May 25, 2012, from ABI/INFORM Global. (Document ID: 2587235431)
This journal
article goes over the Business to Business type of e-commerce and discusses
organization capabilities and market
opportunities.
