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Development of e-commerce

Now, most of the companies are using e-commerce technology and going to be used. Even small companies have their own web sites, giving details about their profile, Products and services and are moving up in the e-commerce value chain. Companies that were earlier providing access to information on their respective web sites are now engaging themselves in e-commerce practices. Some of the e-commerce practices which are being done by most of the companies for the development of e-commerce technology for them are as follows.

a) Better Information technology infrastructure

        E-business models are moving from the proprietary ‘Electronic Data Interchange’ (EDI) ‘Specific’ solutions to internet based ‘mass’ solutions. It has more to do with better computer penetration, increase in number of internet users and high-speed connectivity rather than anything else.

b) Wider acceptance of online payment system

        Online payment mechanism means ‘payment’ and ‘acceptance’ of virtual money. Any such online payment system requires not only the parties transacting business over the Internet but also a ‘payment gateway’ facilitating such transactions. To begin with, it requires use of credit cards and other modes of online payment using advanced technological tools.

          Master Card has recently introduced Site Data Protection Service (SDP), a comprehensive set of global e-business security services that proactively protects online merchants from hacker intrusions. It is a satellite communications network. Also credit card companies have come out with a technology that proactively helps prevents and skimming by using the ‘intrinsic noise’ properties of magnetic strip, which are unique for every card, to differentiate between and original and cloned cards.

Apart from credit card based transactions, other proprietary online payment systems to initiate the ‘uninitiated’ to shop on the Internet are:

  • Cybercash: Ensuring encrypted passage over the internet for the data card data.
  • E-Cash: Issued online for use over the Internet and is stored in an electronic device such as a chip card of computer memory. The person who has purchased such cash can use it online for making payments.
  • Online Pay: Online Pay allows consumers to shop online without fear of fraud by allowing them to make purchases without giving out information about their credit card or their checking account to the online vendor.
  • Secure Sockets Layers: It is developed by Netscape, which provides privacy, integrity and authentication through digital certificates. Increasing use of Smart Card has also given fillip to the e-commerce activities. Smart cards store all their information on a chip buried within the card. It works as an electronic purse storing digital money, which could be used over public terminals (Web sites, ATMs, Telephone lines) etc. A new system of credit card transactions over the Internet is being currently developed jointly by Visa and MasterCard with technical assistance from the Internet Information system and cryptology companies like Netscape, IBM. It is known to Secure Electronic Transactions (SET). It is expected that in coming years, SET would become the standard of payment over the Internet. Another important development has the adoption of digital signatures as authentication standards providing integrity, confidentiality and non-repudiation of electronic records. It has paved the way for legal recognition of electronic contracts, an extremely important step in giving legal sanctity to online payment system.

c) Legal recognition to e-commerce practices. 

      Legal recognition of E-commerce practices has come a long way from the initial adoption of UNCITRAL’s Model Law on Electronic commerce by the General Assembly of the United Nations in early 1997. The purpose of the UNCITRAL Model Law on electronic ecommerce is to encourage the use of electronic commerce and to provide nations with model legislation “governing the use of alternative to paper – based methods of communication and storage of information”. It is based on “fundamental-equivalent” approach and extends notions such as “writing”, “signature” and “original” of traditional paper based requirements to a paperless world. It gives legal acceptance to electronic records and digital signatures. Countries, by adopting the UNCITRAL’s Model Law on Electronic commerce have not only given credence to E-commerce laws globally. The most important element is that the nations’ laws on e-commerce have been based on a similar technology platform, i.e. asymmetric cryptography.


d) Adoption of security standards by the industry

        Business thrives on safety, security and trust whether it is offline or online. The internet being an open, integrated and public system requires far better security coverage than its offline counterpart. It needs an ‘encryption’ technology that provides (i) confidentially (ii) authentication (iii) Integrity (iv) non repudiation and of electronic transactions.

  1. Confidentiality: The idea that the information should be protected from unauthorized internal as well as external users by making it undecipherable. It uses encryption technology to ‘encrypt’ the information in such a way that only an intended user could ‘decrypt’ the information.
  2. Authentication: It means use of encryption technology to identify the sender of originator of the information. Similarly it should be possible to ensure that the message is sent to the person of whom it is meant.
  3. Integrity: It is to verify that the information, which is received, has not been manipulated during its transmission. On retrieval or receipt at the other end of a communication network the information should appear exactly as it was stored or sent by the sender of originator.
  4. Non-repudiation: It is ensure that sender or originator cannot disown information at a later date. Encryption technologies make it possible to bind messages and message acknowledgements with their originators. 

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Development of e-commerce Development of e-commerce Reviewed by mohamed on 1:05 AM Rating: 5

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