This document provides an overview of e-commerce and its key concepts. It discusses the growth of e-commerce since 1995 and its features. It compares traditional commerce to e-commerce and outlines advantages like lower costs, 24/7 access, and increased market reach. Disadvantages include security issues, lack of product touch/feel, and user resistance to online shopping. Key concepts covered are digital markets, goods, and business models like direct sales. Revenue models like advertising, sales, subscriptions, and transaction fees are also summarized.

1. A REPORT ON
Submitted by: Rahul Dutta |Roll No – 13/10 | November 20, 2015
E-COMMERCE:
Digital Markets, Digital Goods

2. CONTENTS
Page No
1. ABSTRACT ---------------------------1
2. OVERVIEW ---------------------------2
3. GROWTH OF E-COMMERCE ---------------------------3
4. FEATURES OF E-COMMERCE ---------------------------4
5. TRADITIONAL COMMERCE V/S E-COMMERCE ---------------------------5
6. ADVANTAGES OF E-COMMERCE ---------------------------6
a. Advantages to Organizations
b. Advantages to Consumers
c. Advantages to Society
7. DISADVANTAGES OF E-COMMERCE ---------------------------8
a. Technical disadvantages
b. Non-technical disadvantages
8. KEY CONCEPTS IN E-COMMERCE: ---------------------------10
a. Digital Markets
b. Digital Goods
9. E-COMMERCE BUSINESS MODELS ---------------------------14
10.E-COMMERCE REVENUE MODELS ---------------------------15
a. Business - to - Business (B2B
b. Business - to - Consumer (B2C)
c. Consumer - to - Consumer (C2C)
11.TYPES OF E-COMMERCE ---------------------------17
12.PAYMENT SYSTEMS ---------------------------22
13.SECURITY SYSTEMS ---------------------------25
14.EDI ---------------------------28
15.THE MOBILE DIGITAL PLATFORM AND MOBILE E-COMMERCE -----------------30
16.CONCLUSION ---------------------------31

3. PAGE | 1
ABSTRACT
In the emerging global economy, electronic-commerce has increasingly
become a necessary component of business strategy and a strong catalyst
for economic development. The integration of information and
communications technology (ICT) in business has revolutionized relationships
within organizations and those between and among organizations and
individuals. Specifically, the use of ICT in business has enhanced productivity,
encouraged greater customer participation, and enabled mass
customization, besides reducing costs. E-commerce creates new
opportunities for performing profitable activities online. It promotes easier
cooperation between different groups: businesses sharing information to
improve customer relations; companies working together to design and build
new products/services; or multinational company sharing information for a
major marketing campaign.

4. PAGE | 2
OVERVIEW
E-Commerce or Electronics Commerce is a methodology of modern business,
which addresses the need of business organizations, vendors and customers
to reduce cost and improve the quality of goods and services while increasing
the speed of delivery. E-commerce refers to the paperless exchange of
business information using the following ways:
 Electronic Data Exchange (EDI)
 Electronic Mail (e-mail)
 Electronic Bulletin Boards
 Electronic Fund Transfer (EFT)
 Other Network-based technologies

5. PAGE | 3
GROWTH OF E-COMMERCE
E-commerce began in 1995 when one of the first Internet portals,
Netscape.com, accepted the first ads from major corporations and
popularized the idea that the Web could be used as a new medium for
advertising and sales. No one envisioned at the time what would turn out to
be an exponential growth curve for e-commerce retail sales, which doubled
and tripled in the early years.
E-commerce grew at double-digit rates until the recession of 2008–2009
when growth slowed to a crawl. In 2009, e-commerce revenues were flat,
not bad considering that traditional retail sales were shrinking by 5 percent
annually. In fact, e-commerce during the recession was the only stable
segment in retail. Some online retailers forged ahead at a record pace:
Amazon’s 2009 revenues were up 25 percent over 2008 sales. Despite the
recession, in 2010, the Retail e-commerce revenues grew 15–25 percent per
year until the recession of 2008–2009, when they slowed measurably. In 2010,
e-commerce revenues grew again at an estimated 12 percent annually.
number of online buyers increased by 6 percent to 133 million, and the
average annual purchase went up by 5 percent to $1,139. Amazon’s sales
grew by 28 percent in the year. By 2006, e-commerce revenues returned to
solid growth, and have continued to be the fastest growing form of retail
trade in the United States, Europe, and Asia.
Fig: Growth of e-commerce.

6. PAGE | 4
FEATURES OF E-COMMERCE
E-Commerce provides the following features:
 Non-Cash Payment: E-Commerce enables the use of credit cards, debit
cards, smart cards, electronic fund transfer via bank's website, and other
modes of electronics payment.
 24x7 Service availability: E-commerce automates the business of
enterprises and the way they provide services to their customers. It is
available anytime, anywhere.
 Advertising/Marketing: E-commerce increases the reach of advertising
of products and services of businesses. It helps in better marketing
management of products/services.
 Improved Sales: Using e-commerce, orders for the products can be
generated anytime, anywhere without any human intervention. It gives
a big boost to existing sales volumes.
 Support: E-commerce provides various ways to provide pre-sales and
post-sales assistance to provide better services to customers.
 Inventory Management: E-commerce automates inventory
management. Reports get generated instantly when required. Product
inventory management becomes very efficient and easy to maintain.
 Communication improvement: E-commerce provides ways for faster,
efficient, reliable communication with customers and partners.

7. PAGE | 5
TRADITIONAL COMMERCE V/S E-COMMERCE
Traditional Commerce E-Commerce
Heavy dependency on information
exchange from person to person.
Information sharing is made easy via
electronic communication channels
making a little dependency on person to
person information exchange.
Communication/transactions are done in
synchronous way. Manual intervention is
required for each communication or
transaction.
Communication or transactions can be
done in asynchronous way. The whole
process is completely automated.
It is difficult to establish and maintain
standard practices in traditional
commerce.
A uniform strategy can be easily
established and maintained in e-
commerce.
Communications of business depends
upon individual skills.
In e-commerce, there is no human
intervention.
Unavailability of a uniform platform, as
traditional commerce depends heavily on
personal communication.
E-commerce websites provide the user a
platform where all the information is
available at one place.
No uniform platform for information
sharing, as it depends heavily on personal
communication.
E-commerce provides a universal platform
to support commercial/business activities
across the globe.

8. PAGE | 6
ADVANTAGES E-COMMERCE
The advantages of e-commerce can be broadly classified into three major
categories:
 Advantages to Organizations
 Advantages to Consumers
 Advantages to Society
Advantages to Organizations:
 Using e-commerce, organizations can expand their market to national and
international markets with minimum capital investment. An organization
can easily locate more customers, best suppliers, and suitable business
partners across the globe.
 E-commerce helps organizations to reduce the cost to create process,
distribute, retrieve and manage the paper based information by digitizing
the information.
 E-commerce improves the brand image of the company.
 E-commerce helps organizations to provide better customer service.
 E-commerce helps to simplify the business processes and makes them faster
and efficient.
 E-commerce reduces the paper work.
 E-commerce increases the productivity of organizations. It supports "pull"
type supply management. In "pull" type supply management, a business
process starts when a request comes from a customer and it uses just-in-
time manufacturing way.

9. PAGE | 7
Advantages to Customers
 It provides 24x7 support. Customers can enquire about a product or service
and place orders anytime, anywhere from any location.
 E-commerce application provides users with more options and quicker
delivery of products.
 E-commerce application provides users with more options to compare and
select the cheaper and better options.
 A customer can put review comments about a product and can see what
others are buying, or see the review comments of other customers before
making a final purchase.
 E-commerce provides options of virtual auctions.
 It provides readily available information. A customer can see the relevant
detailed information within seconds, rather than waiting for days or weeks.
 E-Commerce increases the competition among organizations and as a
result, organizations provides substantial discounts to customers.

10. PAGE | 8
Advantages to Society
 Customers need not travel to shop a product, thus less traffic on road and
low air pollution.
 E-commerce helps in reducing the cost of products, so less affluent people
can also afford the products.
 E-commerce has enabled rural areas to access services and products,
which are otherwise not available to them.
 E-commerce helps the government to deliver public services such as
healthcare, education, social services at a reduced cost and in an
improved manner.
DISADVANTAGES OF E-COMMERCE
The disadvantages of e-commerce can be broadly classified into two major
categories:
 Technical disadvantages
 Non-technical disadvantages
Technical Disadvantages
 There can be lack of system security, reliability or standards owing to poor
implementation of e-commerce.
 The software development industry is still evolving and keeps changing
rapidly.
 In many countries, network bandwidth might cause an issue.
 Special types of web servers or other software might be required by the
vendor, setting the e-commerce environment apart from network servers.

11. PAGE | 9
 Sometimes, it becomes difficult to integrate an e-commerce software or
website with existing applications or databases.
 There could be software/hardware compatibility issues, as some e-
commerce software may be incompatible with some operating system or
any other component.
Non-Technical Disadvantages
 Initial cost: The cost of creating/building an e-commerce application in-
house may be very high. There could be delays in launching an
e-Commerce application due to mistakes, and lack of experience.
 User resistance: Users may not trust the site being an unknown faceless
seller. Such mistrust makes it difficult to convince traditional users to switch
from physical stores to online/virtual stores.
 Security/ Privacy: It is difficult to ensure the security or privacy on online
transactions.
 Lack of touch or feel of products during online shopping is a drawback.
 E-commerce applications are still evolving and changing rapidly.
 Internet access is still not cheaper and is inconvenient to use for many
potential customers, for example, those living in remote villages.

12. PAGE | 10
KEY CONCEPTS IN E-COMMERCE:
DIGITAL MARKETS AND DIGITAL GOODS IN A
GLOBAL MARKETPLACE
DIGITAL MARKETS
Digital markets are very flexible and efficient because they operate with
reduced search and transaction costs, lower menu costs (merchants’ costs of
changing prices), greater price discrimination, and the ability to change
prices dynamically based on market conditions. In dynamic pricing, the price
of a product varies depending on the demand characteristics of the customer
or the supply situation of the seller. These new digital markets may either
reduce or increase switching costs, depending on the nature of the product
or service being sold, and they may cause some extra delay in gratification.
Unlike a physical market, we can’t immediately consume a product such as
clothing purchased over the Web (although immediate consumption is
possible with digital music downloads and
other digital products.)
Digital markets provide many opportunities to sell directly to the
consumer, bypassing intermediaries, such as distributors or retail outlets.
Eliminating intermediaries in the distribution channel can significantly lower
purchase transaction costs. To pay for all the steps in a traditional distribution
channel, a product may have to be priced as high as 135 percent of its original
cost to manufacture. By selling directly to consumers or reducing
the number of intermediaries, companies are able to raise profits while
charging lower prices. The removal of organizations or business process layers
responsible for intermediary steps in a value chain is called disintermediation.

13. PAGE | 11
Disintermediation and Re-intermediation
In traditional commerce, there are intermediating agents like wholesalers,
distributors, and retailers between the manufacturer and the consumer. In B2C
websites, a manufacturer can sell its products directly to potential consumers.
This process of removal of business layers responsible for intermediary functions
is called disintermediation.
Nowadays, new electronic intermediary breeds such as e-mall and product
selection agents are emerging. This process of shifting of business layers
responsible for intermediary functions from traditional to electronic mediums is
called re-intermediation.

14. PAGE | 12
Table below describes digital markets and how they differ from traditional
physical markets

15. PAGE | 13
DIGITAL GOODS
The Internet digital marketplace has greatly expanded sales of digital goods.
Digital goods are goods that can be delivered over a digital network. Music
tracks, video, software, newspapers, magazines, and books can all be
expressed, stored, delivered, and sold as purely digital products. Currently,
most of these products are sold as physical goods, for example, CDs, DVDs,
newspapers, and hard-copy books. But the Internet offers the possibility of
delivering all these products on demand as digital products. In general, for
digital goods, the marginal cost of producing another unit is about zero (it
costs nothing to make a copy of a music file). However, the cost of producing
the original first unit is relatively high—in fact, it is nearly the total cost of the
product because there are few other costs of inventory and distribution. Costs
of delivery over the Internet are very low, marketing costs remain the same,
and pricing can be highly variable. The impact of the Internet on the market
for these kinds of digital goods is nothing short of revolutionary, and we see the
results around us every day.
Table below describes digital goods and how they differ from traditional
physical goods.

16. PAGE | 14
E-COMMERCE BUSINESS MODELS
Changes in the economics of information described earlier have created the
conditions for entirely new business models to appear, while destroying older
business models. Table below describes some of the most important Internet
business models that have emerged. All, in one way or another, use the
Internet to add extra value to existing products and services or to provide the
foundation for new products and services.

17. PAGE | 15
E-COMMERCE REVENUE MODELS
A firm’s revenue model describes how the firm will earn revenue, generate
profits, and produce a superior return on investment. Although there are many
different e-commerce revenue models that have been developed, most
companies rely on one, or some combination, of the following six revenue
models:
 Advertising Revenue Model
 Sales Revenue Model
 Subscription Revenue Model
 Free/Premium Revenue Model
 Transaction fee Revenue Model
 Affiliate Revenue Model
Advertising Revenue Model
In the advertising revenue model, a Web site generates revenue by
attracting a large audience of visitors who can then be exposed to
advertisements. The advertising model is the most widely used revenue
model in e-commerce, and arguably, without advertising revenues, the Web
would be a vastly different experience from what it is now. Content on the
Web - everything from news to videos and opinions - is “free” to visitors
because advertisers pay the production and distribution costs in return for
the right to expose visitors to ads.
Sales Revenue Model
In the sales revenue model, companies derive revenue by selling goods,
information, or services to customers. Companies such as Amazon (which
sells books, music, and other products), LLBean.com, and Gap.com, all have
sales revenue models. Content providers make money by charging for
downloads of entire files such as music tracks (iTunes Store) or books or for
downloading music and/or video.
Subscription Revenue Model
In the subscription revenue model, a Web site offering content or services
charges a subscription fee for access to some or all of its offerings on an
ongoing basis. Content providers often use this revenue model. For instance,
the online version of Consumer Reports provides access to premium content,
such as detailed ratings, reviews, and recommendations, only to subscribers,

18. PAGE | 16
who have a choice of paying a $5.95 monthly subscription fee or a $26.00
annual fee. Netflix is one of the most successful subscriber sites with more that
15 million subscribers in September 2010. The Wall Street Journal has the
largest online subscription newspaper with more than 1 million online
subscribers.
Free/Freemium Revenue Model
In the free/freemium revenue model, firms offer basic services or content for
free, while charging a premium for advanced or special features. For
example, Google offers free applications, but charges for premium services.
Pandora, the subscription radio service, offers a free service with limited play
time, and a premium service with unlimited play. The idea is to attract very
large audiences with free services, and then to convert some of this
audience to pay a subscription for premium services. One problem with this
model is converting people from being “free loaders” into paying customers.
“Free” can be a powerful model for losing money.
Transaction Fee Revenue Model
In the transaction fee revenue model, a company receives a fee for
enabling or executing a transaction. For example, eBay provides an online
auction marketplace and receives a small transaction fee from a seller if the
seller is successful in selling an item. E*Trade, an online stockbroker, receives
transaction fees each time it executes a stock transaction on behalf of a
customer. The transaction revenue model enjoys wide acceptance in part
because the true cost of using the platform is not immediately apparent to
the user.
Affiliate Revenue Model
In the affiliate revenue model, Web sites (called “affiliate Web sites”) send
visitors to other Web sites in return for a referral fee or percentage of the
revenue from any resulting sales. For example, MyPoints makes money by
connecting companies to potential customers by offering special deals to its
members. When members take advantage of an offer and make a
purchase, they earn “points” they can redeem for free products and
services, and MyPoints receives a referral fee.

19. PAGE | 17
TYPES OF E-COMMERCE
E-commerce business models can generally be categorized into the
following categories.
 Business - to - Business (B2B)
 Business - to - Consumer (B2C)
 Consumer - to - Consumer (C2C)

20. PAGE | 18
B2B MODEL
A website following the B2B business model sells its products to an
intermediate buyer who then sells the products to the final customer. As an
example, a wholesaler places an order from a company's website and after
receiving the consignment, it sells the end-product to the final customer who
comes to buy the product at the wholesaler's retail outlet.
B2B identifies both the seller as well as the buyer as business entities. B2B
covers a large number of applications, which enables business to form
relationships with their distributors, re-sellers, suppliers, etc. Following are the
leading items in B2B e-Commerce:
 Electronics
 Shipping and Warehousing
 Motor Vehicles
 Petrochemicals
 Paper
 Office products
 Food

21. PAGE | 19
Key Technologies
Following are the key technologies used in B2B e-commerce:
 Electronic Data Interchange (EDI) - EDI is an inter-organizational exchange
of business documents in a structured and machine process able format.
 Internet - Internet represents the World Wide Web or the network of
networks connecting computers across the world.
 Intranet - Intranet represents a dedicated network of computers within a
single organization.
 Extranet - Extranet represents a network where the outside business
partners, suppliers, or customers can have a limited access to a portion of
enterprise intranet/network.
 Back-End Information System Integration – Back-end information systems
are database management systems used to manage the business data.
Architectural Models
Following are the architectural models in B2B e-commerce:
 Supplier-oriented Marketplace - In this type of model, a common
marketplace provided by a supplier is used by both the individual
customers as well as the business users. A supplier offers an e-store for sales
promotion.
 Buyer-oriented marketplace - In this type of model, the buyer has his/her
own market place or e-market. He/she invites suppliers to bid on the
product's catalog. A buyer company opens a bidding site.
 Intermediary-oriented marketplace - In this type of model, an intermediary
company runs a marketplace where business buyers and sellers can
transact with each other.

22. PAGE | 20
B2C MODEL
In B2C model, a business website is a place where all the transactions take
place directly between a business organization and a consumer.
In the B2C model, a consumer goes to the website, selects a catalog, orders
the catalog, and an email is sent to the business organization. After receiving
the order, goods are dispatched to the customer. Following are the key
features of the B2C model:
 Heavy advertising required to attract customers.
 High investments in terms of hardware/software.
 Support or good customer care service.

23. PAGE | 21
Consumer Shopping Procedure
Following are the steps used in B2C e-commerce:
A consumer –
1. determines the requirement,
2. searches available items on the website meeting the requirements,
3. compares similar items for price, delivery date or any other terms,
4. places the order,
5. pays the bill,
6. receives the delivered item and reviews/inspects them,
7. consults the vendor to get after-service support or returns the product if
not satisfied with the delivered product.
C2C MODEL
A website following the C2C business model helps consumers to sell their
assets like residential property, cars, motorcycles, etc., or rent a room by
publishing their information on the website. Website may or may not charge
the consumer for its services. Another consumer may opt to buy the product
of the first customer by viewing the post/advertisement on the website.

24. PAGE | 22
PAYMENT SYSTEMS
E-commerce sites use electronic payment, where electronic payment refers
to paperless monetary transactions. Electronic payment has revolutionized
the business processing by reducing the paperwork, transaction costs, and
labor cost. Being user friendly and less time-consuming than manual
processing, it helps business organization to expand its market
reach/expansion. Listed below are some of the modes of electronic
payments:
 Credit Card
 Debit Card
 Smart Card
 E-Money
 Electronic Fund Transfer (EFT)
Credit Card
Payment using credit card is one of most common mode of electronic
payment. Credit card is a small plastic card with a unique number attached
with an account. It has a magnetic strip embedded in it that is used to read
the credit card via card readers. When a customer purchases a product via
credit card, the credit card issuer bank pays on behalf of the customer and
the customer has a certain time period after which he/she can pay the
credit card bill. It is usually in the credit card monthly payment cycle.
Following are the actors in the credit card system:
 The card holder - Customer,
 The merchant - seller of product who can accept credit card
payments,
 The card issuer bank - card holder's bank,
 The acquirer bank - the merchant's bank,
 The card brand - for example, Visa or MasterCard.

25. PAGE | 23
Step Description
Step 1 Bank issues and activates a credit
card to the customer on his/her
request.
Step 2 The customer presents the credit
card information to the merchant
site or to the merchant from whom
he/she wants to purchase a
product/service.
Step 3 Merchant validates the customer's
identity by asking for approval from
the card brand company.
Step 4 Card brand company authenticates
the credit card and pays the
transaction by credit. Merchant
keeps the sales slip.
Step 5 Merchant submits the sales slip to
acquirer banks and gets the service
charges paid to him/her.
Step 6 Acquirer bank requests the card
brand company to clear the credit
amount and gets the payment.
Step 7 Now the card brand company asks
to clear the amount from the issuer
bank and the amount gets
transferred to the card brand
company.

26. PAGE | 24
Debit Card
Debit card, like credit card, is a small plastic card with a unique number
mapped with the bank account number. It is required to have a bank
account before getting a debit card from the bank. The major difference
between a debit card and a credit card is that in case of payment through
debit card, the amount gets deducted from the card's bank account
immediately and there should be sufficient balance in the bank account for
the transaction to get completed; whereas in case of a credit card
transaction, there is no such compulsion.
Debit cards free the customer to carry cash and cheques. Even merchants
accept a debit card readily. Having a restriction on the amount that can be
withdrawn in a day using a debit card helps the customer to keep a check
on his/her spending.
Smart Card
Smart card is again similar to a credit card or a debit card in appearance,
but it has a small microprocessor chip embedded in it. It has the capacity to
store a customer’s work-related and/or personal information. Smart cards are
also used to store money and the amount gets deducted after every
transaction. Smart cards can only be accessed using a PIN that every
customer is assigned with. Smart cards are secure, as they store information
in encrypted format and are less expensive/provides faster processing.
Mondex and Visa Cash cards are examples of smart cards.
E-Money
E-Money transactions refer to situation where payment is done over the
network and the amount gets transferred from one financial body to another
financial body without any involvement of a middleman. E-money
transactions are faster, convenient, and saves a lot of time.
Online payments done via credit cards, debit cards, or smart cards are
examples of e-money transactions. Another popular example is e-cash. In
case of e-cash, both customer and merchant have to sign up with the bank
or company issuing e-cash.

27. PAGE | 25
Electronic Fund Transfer
It is a very popular electronic payment method to transfer money from one
bank account to another bank account. Accounts can be in the same bank
or different banks. Fund transfer can be done using ATM (Automated Teller
Machine) or using a computer. Nowadays, internet-based EFT is getting
popular. In this case, a customer uses the website provided by the bank, logs
in to the bank's website and registers another bank account. He/she then
places a request to transfer certain amount to that account. Customer's
bank transfers the amount to other account if it is in the same bank,
otherwise the transfer request is forwarded to an ACH (Automated Clearing
House) to transfer the amount to other account and the amount is deducted
from the customer's account. Once the amount is transferred to other
account, the customer is notified of the fund transfer by the bank.
SECURITY SYSTEMS
Security is an essential part of any transaction that takes place over the
internet. Customers will lose his/her faith in e-business if its security is
compromised. Following are the essential requirements for safe e-
payments/transactions:
 Confidentiality - Information should not be accessible to an unauthorized
person. It should not be intercepted during the transmission.
 Integrity - Information should not be altered during its transmission over the
network.
 Availability - Information should be available wherever and whenever
required within a time limit specified.
 Authenticity - There should be a mechanism to authenticate a user before
giving him/her an access to the required information.
 Non-Repudiability - It is the protection against the denial of order or denial
of payment. Once a sender sends a message, the sender should not be
able to deny sending the message. Similarly, the recipient of message
should not be able to deny the receipt.
 Encryption - Information should be encrypted and decrypted only by an
authorized user.
 Auditability - Data should be recorded in such a way that it can be audited
for integrity requirements.

28. PAGE | 26
Measures to ensure Security
Major security measures are the following:
 Encryption - It is a very effective and practical way to safeguard the data
being transmitted over the network. Sender of the information encrypts the
data using a secret code and only the specified receiver can decrypt the
data using the same or a different secret code.
 Digital Signature -Digital signature ensures the authenticity of the
information. A digital signature is an e-signature authenticated through
encryption and password.
 Security Certificates - Security certificate is a unique digital id used to verify
the identity of an individual website or user.
Security Protocols in Internet
We will discuss here some of the popular protocols used over the internet to
ensure secured online transactions.
Secure Socket Layer (SSL)
It is the most commonly used protocol and is widely used across the industry.
It meets following security requirements:
 Authentication
 Encryption
 Integrity
 Non-reputability
"https://" is to be used for HTTP urls with SSL, whereas "http:/" is to be used for
HTTP urls without SSL.
Secure Hypertext Transfer Protocol (SHTTP)
SHTTP extends the HTTP internet protocol with public key encryption,
authentication, and digital signature over the internet. Secure HTTP supports
multiple security mechanism, providing security to the end-users. SHTTP works
by negotiating encryption scheme types used between the client and the
server.

29. PAGE | 27
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration.
Theoretically, it is the best security protocol. It has the following components:
 Card Holder's Digital Wallet Software - Digital Wallet allows the card holder
to make secure purchases online via point and click interface.
 Merchant Software - This software helps merchants to communicate with
potential customers and financial institutions in a secure manner.
 Payment Gateway Server Software - Payment gateway provides automatic
and standard payment process. It supports the process for merchant's
certificate request.
 Certificate Authority Software - This software is used by financial institutions
to issue digital certificates to card holders and merchants, and to enable
them to register their account agreements for secure electronic
commerce.

30. PAGE | 28
EDI
EDI stands for Electronic Data Exchange. EDI is an electronic way of
transferring business documents in an organization internally, between its
various departments or externally with suppliers, customers, or any subsidiaries.
In EDI, paper documents are replaced with electronic documents such as
word documents, spreadsheets, etc.
EDI Documents
Following are the few important documents used in EDI:
 Invoices
 Purchase orders
 Shipping Requests
 Acknowledgements
 Business Correspondence letters
 Financial information letters

31. PAGE | 29
Steps in an EDI System
Following are the steps followed in an EDI system:
1. A program generates a file that contains the processed document.
2. The document is converted into an agreed standard format.
3. The file containing the document is sent electronically on the network.
4. The trading partner receives the file.
5. An acknowledgement document is generated and sent to the originating
organization.
Advantages of an EDI System
Following are the advantages of having an EDI system:
 Reduction in data entry errors - Chances of errors are much less while
using a computer for data entry.
 Shorter processing life cycle - Orders can be processed as soon as
they are entered into the system. It reduces the processing time of the
transfer documents.
 Electronic form of data - It is quite easy to transfer or share the data,
as it is present in electronic format.
 Reduction in paperwork - As a lot of paper documents are replaced
with electronic documents, there is a huge reduction in paperwork.
 Cost Effective - As time is saved and orders are processed very
effectively, EDI proves to be highly cost effective.
 Standard means of communication - EDI enforces standards on the
content of data and its format which leads to clearer communication.

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THE MOBILE DIGITAL PLATFORM AND
MOBILE E-COMMERCE
M-commerce has taken off. In 2010, m-commerce represented less than 10
percent of all e-commerce, with about $5 billion in annual revenues
generated by selling music, videos, ring tones, applications, movies, television,
and location-based services like local restaurant locators and traffic updates.
However, m-commerce is the fastest growing form of e-commerce, with some
areas expanding at a rate of 50 percent or more per year. In 2010, there were
an estimated 5 billion cell phone subscribers worldwide, with over 855 million
in China and 300 million in the United States
M-COMMERCE SERVICES AND APPLICATIONS
The main areas of growth in mobile e-commerce are:
 location-based services,
 entertainment downloads of ring tones, music, video, and TV shows,
 mobile display advertising,
 direct shopping services such as Slifter and
 e-book sales.
M-commerce applications have taken off for services that are time-critical,
that appeal to people on the move, or that accomplish a task more efficiently
than other methods. They are especially popular in Europe, Japan, South
Korea, and other countries with strong wireless broadband infrastructures. The
following sections describe some examples.
Location-Based Services
Wikitude.me provides a special kind of browser for smart phones equipped
with a built-in global positioning system (GPS) and compass that can identify
your precise location and where the phone is pointed. Using information from
over 800,000 points of interest available on Wikipedia, plus thousands of other
local sites, the browser overlays information about points of interest you are
viewing, and displays that information on your smartphone screen,
superimposed on a map or photograph that you just snapped. For example,
users can point their smart phone cameras towards mountains from a tour bus
and see the names and heights of the mountains displayed on the screen.

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Banking and Financial Services
Banks and credit card companies are rolling out services that let customers
manage their accounts from their mobile devices. Customers can use their
cell phones to check account balances, transfer funds, and pay bills.
Wireless Advertising and Retailing
Although the mobile advertising market is currently small, it is rapidly growing
(up 17 percent from last year and expected to grow to over $6.2
billion by 2014), as more and more companies seek ways to exploit new
databases of location-specific information. Yahoo displays ads on its mobile
home page for companies such as Pepsi, Procter & Gamble, Hilton, Nissan,
and Intel. Google is displaying ads linked to cell phone searches by users of
the mobile version of its search engine. Ads are embedded in games, videos,
and other mobile applications.
Games and Entertainment
Cell phones have developed into portable entertainment platforms.
Smartphones like the iPhone and Droid offer downloadable and streaming
digital games, movies, TV shows, music, and ringtones. Users of broadband
services from the major wireless vendors can stream on-demand video clips,
news clips, and weather reports. Facebook, Myspace, YouTube, and other
social networking sites have versions for mobile devices.
CONCLUSION
With developments in the Internet and Web-based technologies, distinctions
between traditional markets and the global electronic marketplace-such as
business capital size, among others-are gradually being narrowed down.
e-commerce coupled with the appropriate strategy and policy approach
enables small and medium scale enterprises to compete with large and
capital-rich businesses. On another plane, developing countries are given
increased access to the global marketplace, where they compete with and
complement the more developed economies. Most, if not all, developing
countries are already participating in e-commerce, either as sellers or buyers.
However, to facilitate e-commerce growth in these countries, the relatively
underdeveloped information infrastructure must be improved.