PRACTICLE

FILE

ON

E- COMMERCE

SUBMITTED BY:- SUBMITTED TO:-

BHARAT SACHDEVA Mr. KAPIL GUPTA
ROLL NO.182522 (Computer Science Department)
UNIVERSITY ROLL NO. HINDU COLLEGE, SONEPAT
 TABLE OF CONTENTS

Sr. Particulars Remar

No. ks
1. INTRODUCTION TO E-COMMERCE
2. FEATURES OF E-COMMERCE
3. TYPES OF E-COMMERCE
4. REATAIL & WHOLESALE MODEL OF E-
COMMERCE
5. ELECTRONIC PAYMENT GATEWAY
6. ELECTRONIC DATA INTERCHANGE
7. SECURITY OF E-COMMERCE
8. ONLINE PROCEDURE FOR SHOPPING
CHAPTER 1

 INTRODUCTION TO ELECTRONIC COMMERCE

Electronic commerce, commonly known as ecommerce, is a type of industry

where buying and selling of product or service is conducted over electronic
systems such as the Internet and other computer networks. Electronic commerce
draws on technologies such as mobile commerce, electronic funds transfer,
supply chain management, Internet marketing, online transaction processing,
electronic data interchange (EDI), inventory management systems, and
automated data collection systems. Modern electronic commerce typically uses
the World Wide Web at least at one point in the transaction's life-cycle, although
it may encompass a wider range of technologies such as e-mail, mobile devices
social media, and telephones as well.

Electronic commerce is generally considered to be the sales aspect of e-

business. It also consists of the exchange of data to facilitate the financing and
payment aspects of business transactions.

E-commerce can be divided into:

 E-tailing or "virtual storefronts" on websites with online catalogues,

sometimes gathered into a "virtual mall"
 The gathering and use of demographic data through Web contacts and
social media
 Electronic Data Interchange (EDI), the business-to-business exchange of
data
 E-mail and fax and their use as media for reaching prospective and
established customers (for example, with newsletters)
 Business-to-business/ Business-to-Customer buying and selling
 The security of business transactions etc
 FEATURES OF E-COMMERCE:-
1. Ubiquity- The traditional business market is a physical place, access to
treatment by means of document circulation. For example, clothes and
shoes are usually directed to encourage customers to go somewhere to
buy. E-commerce is ubiquitous meaning that it can be everywhere. E-
commerce is the worlds reduce cognitive energy required to complete the
task.

2. Global Reach- E-commerce allows business transactions on the cross

country bound can be more convenient and more effective as compared
with the traditional commerce. On the e-commerce businesses potential
market scale is roughly equivalent to the network the size of the world’s
population.

3. Universal Standards- E-commerce technologies is an unusual feature, is

the technical standard of the Internet, so to carry out the technical
standard of e-commerce is shared by all countries around the world
standard. Standard can greatly affect the market entry cost and
considering the cost of the goods on the market. The standard can make
technology business existing become more easily, which can reduce the
cost, technique of indirect costs in addition can set the electronic
commerce website 10$ / month.

4. Richness- Advertising and branding are an important part of commerce.

E-commerce can deliver video, audio, animation, billboards, signs and
etc. However, it’s about as rich as television technology.

5. Interactivity- Twentieth Century electronic commerce business

technology is called interactive, so they allow for two-way
communication between businesses and consumers.
 6. Information Density- The density of information the Internet has greatly
improved, as long as the total amount and all markets, consumers and
businesses quality information. The electronic commerce technology,
reduce the information collection, storage, communication and processing
cost. At the same time, accuracy and timeliness of the information
technology increases greatly, information is more useful, more important
than ever.

7. Personalization- E-commerce technology allows for personalization.

Business can be adjusted for a name, a person’s interests and past
purchase message objects and marketing message to a specific individual.
The technology also allows for custom. Merchants can change the
product or service based on user preferences, or previous behavior.

 E-COMMERCE: A MAJOR INDUSTRY TREND

Electronic commerce, or e-commerce, involves the sale of goods and services

via electronic means—principally over the internet, although sales via television
(terrestrial, cable, and satellite) are also included. E-commerce can be further
divided into the following sectors: business-to-business (B2B), business-to-
government (B2G), consumer-to-consumer (C2C), government-to-business
(G2B), government-to-citizen (G2C), and business-to-consumer (B2C).
Retailers that rely primarily on e-commerce to sell goods or services are often
referred to as e-tailers.

The term "Electronic commerce" (or e-Commerce) refers to the use of an

electronic medium to carry out commercial transactions. Most of the time, it
refers to the sale of products via Internet, but the term ecommercealso covers
purchasing mechanisms via Internet (for B-To-B).
A client who purchases on the Internet is called a cyber- consumer.E-
commerce is not only limited to online sales, but also covers:

 Preparation of estimates online

 Consulting of users

 Provision of an electronic catalogue

 Access plan to point of sales

 Real-time management of product availability (stock)

 Online payment

 Delivery tracking

 After-sales service

 MAJOR TYPES OF E-COMMERCE

The several types of e-commerce in use today are classified
based on the nature of the transactions: business-to-consumer
(B2C), business-to-business (B2B), consumer-to-consumer
(C2C), consumer-to-business (C2B), and non-business and
government, and organizational (intra-business).

 BUSINESS-TO-CONSUMER E-COMMERCE In B2C e-

commerce, businesses sell directly a diverse group of products
and services to customers . In addition to pure B2C e-commerce
players such as Amazon.com, and hepsiburada.com other
traditional businesses have entered the virtual marketplace by
establishing comprehensive web sites and virtual storefronts. In
these cases, e-commerce supplements the traditional commerce
by offering products and services through electronic channels.
Wal-Mart Stores, and the Gap are examples of companies that
are very active in B2C e-commerce. Some of the advantages of
these e-commerce sites and companies include availability of
physical space (customers can physically visit the store),
availability of returns (customers can return a purchased item to
the physical store), and availability of customer service in these
physical stores. Figure 3.1 illustrates a B2C relationship. In the
figure ISP, means Internet service provider. Figure 3.1 A
business-to-consumer (B2C) e-commerce relationship A
Business-to-Consumer e-Commerce Cycle There are five major
activities involved in conducting B2C e-commerce. The B2B
ecommerce model uses a similar cycle. • Increased
communications results in improved inventory management and
control. Major Models of Business-to-Business e-Commerce
The three major B2B e-commerce models are determined by
seller, buyer, or intermediary (third party) who controls the
marketplace. Consequently, the following four marketplaces
have been created. Each model has specific characteristics and is
suitable for a specific business: • Seller-controlled marketplace:
This is t he most popular type of B2B model for both consumers
and businesses. In this model the sellers who provide to
fragmented markets such as chemicals, electronics.
 BUSİNESS-TO-BUSİNESS ECOMMERCE ABusiness-to-
Business e-commerce holds electronic transactions among and
between businesses. The Internet and reliance of all businesses
upon other companies for supplies, utilities, and services has
enhanced the popularity of B2B e-commerce and made B2B the
fastest growing segment within the e-commerce environment. In
recent years extranets (more than one intranet) have been
effectively used for B2B operations. B2B e-commerce creates
dynamic interaction among the business partners; this represents
a fundamental shift in how business will be conducted in the
21st century. Oracle, PeopleSoft, SAP, Broadvision, Commerce
One, Heatheon/Webmd, 12 Technologies, Inc., Ariba , Aspect
Development, Baan, BEA Systems, Internet Capital Group,
VerticalNet, Vignette are some of the major vendors of e-
commerce and B2B solutions [1]. Companies using B2B e-
commerce relationship observe cost savings by increasing the
speed, reducing errors, and eliminating many manual activities.
 CONSUMER-TO-CONSUMER E-COMMERCE Using
C2C e-commerce, consumers sell directly to other consumers
using the Internet and web technologies. Individuals sell a wide
variety of services/products on the Web or through auction sites
such as eBay.com, and gittigidiyor.com through classified ads or
by advertising. Figure 3.3 illustrates a general C2C e-commerce
relationship. Consumers are also able to advertise their products
and services in organizational intranets and sell them to other
 employees.A consumer-to-consumer (C2C) e-commerce
relationship

 CONSUMER-TO-BUSINESS E-COMMERCE Consumer-

to-business (C2B) e-commerce that involves individuals selling
to businesses may include a service/product that a consumer is
willing to sell. Individuals offer certain prices for specific
products/services. Companies such as pazaryerim.com and
mobshop.com are examples of C2B. Figure 2-4 shows a C2B e-
commerce relationship. Figure 3.5 A consumer-to-business
(C2B) e-commerce relationship

ELECTRONIC PAYMENT GATEWAY

A payment gateway is a merchant service provided by an e-

commerce application service provider that authorizescredit card or
direct payments processing for e-businesses, online retailers, bricks
and clicks, or traditional brick and mortar.[1] The payment gateway
may be provided by a bank to its customers, but can be provided by a
specialised financial service provider as a separate service, such as
a payment service provider.

A payment gateway facilitates a payment transaction by the transfer of

information between a payment portal (such as a website, mobile
phone or interactive voice response service) and the front end
processor or acquiring bank.
When a customer orders a product from a payment gateway-enabled
merchant, the payment gateway performs a variety of tasks to process
the transaction.[2]

1. A customer places an order on website by pressing the 'Submit

Order' or equivalent button, or perhaps enters their card details
using an automatic phone answering service.

2. If the order is via a website, the customer's web browser

encrypts the information to be sent between the browser and the
merchant's webserver. In between other methods, this may be
done via SSL (Secure Socket Layer) encryption. The payment
gateway may allow transaction data to be sent directly from the
customer's browser to the gateway, bypassing the merchant's
systems. This reduces the merchant's Payment Card Industry
Data Security Standard (PCI DSS) compliance obligations
without redirecting the customer away from the website.

3. The merchant then forwards the transaction details to their

payment gateway. This is another (SSL) encrypted connection
to the payment server hosted by the payment gateway.

4. The payment gateway converts the message from XML to ISO

8583 or a variant message format (format understood by EFT
Switches) and then forwards the transaction information to
the payment processor used by the merchant's acquiring bank.
5. The payment processor forwards the transaction information to
the card association (I.e.: Visa/MasterCard/American Express).
If an American Express or Discover Card was used, then the
card association also acts as the issuing bank and directly
provides a response of approved or declined to the payment
gateway. Otherwise [e.g.: MasterCard or Visa card was used],
the card association routes the transaction to the correct
card issuing bank.

6. The credit card issuing bank receives the authorization request,

verifies the credit or debit available and then sends a response
back to the processor (via the same process as the request for
authorization) with a response code (I.e.:: approved, denied). In
addition to communicating the fate of the authorization request,
the response code is also used to define the reason why the
transaction failed (I.e.: insufficient funds, or bank link not
available). Meanwhile, the credit card issuer holds an
authorization associated with that merchant and consumer for
the approved amount. This can impact the consumer's ability to
spend further ( because it reduces the line of credit available or
it puts a hold on a portion of the funds in a debit account).

7. The processor forwards the authorization response to the

payment gateway

8. The payment gateway receives the response, and forwards it on

to the website (or whatever interface was used to process the
 payment) where it is interpreted as a relevant response then
relayed back to the merchant and cardholder. This is known as
the Authorization or "Auth"

9. The entire process typically takes 2–3 seconds.[3]

10. The merchant then fulfills the order and the above process
can be repeated but this time to "Clear" the authorization by
consummating the transaction. Typically, the "Clear" is initiated
only after the merchant has fulfilled the transaction (I.e.:
shipped the order). This results in the issuing bank 'clearing' the
'auth' (i.e.: moves auth-hold to a debit) and prepares them to
settle with the merchant acquiring bank.

11. The merchant submits all their approved authorizations, in a

"batch" (end of the day), to their acquiring bank for settlement
via its processor. This typically reduces or "Clears" the
corresponding "Auth" if it has not been explicitly "Cleared".

12. The acquiring bank makes the batch settlement request of

the credit card issuer.

13. The credit card issuer makes a settlement payment to the

acquiring bank (the next day in most cases)

14. The acquiring bank subsequently deposits the total of the

approved funds into the merchant's nominated account (the
same day or next day). This could be an account with the
 acquiring bank if the merchant does their banking with the same
bank, or an account with another bank.

15. The entire process from authorization to settlement to

funding typically takes 3 days.

ELECTRONIC DATA INTERCHANGE (EDI)

Electronic Data Interchange (EDI) is the electronic interchange of business

information using a standardized format; a process which allows one company
to send information to another company electronically rather than with paper.
Business entities conducting business electronically are called trading partners.

Many business documents can be exchanged using EDI, but the two most
common are purchase orders and invoices. At a minimum, EDI replaces the
mail preparation and handling associated with traditional business
communication. However, the real power of EDI is that it standardizes the
information communicated in business documents, which makes possible a
"paperless" exchange.

The traditional invoice illustrates what this can mean. Most companies create
invoices using a computer system, print a paper copy of the invoice and mail it
to the customer. Upon receipt, the customer frequently marks up the invoice and
enters it into its own computer system. The entire process is nothing more than
the transfer of information from the seller's computer to the customer's
computer. EDI makes it possible to minimize or even eliminate the manual steps
involved in this transfer.
 PROCESS OF EDI

The process improvements that EDI offers are significant and can be dramatic.
For example, consider the difference between the traditional paper purchase
order and its electronic counterpart:

A Traditional Document ExchangeAn EDI Document Exchange of a

of a Purchase Order Purchase Order
This process normally takes betweenThis process normally occurs
three and five days. overnight and can take less than an
hour.

 Buyer makes a buying decision, Buyer makes a buying

creates the purchase order and prints it. decision, creates the purchase order
 Buyer mails the purchase order tobut does not print it.
the supplier.  EDI software creates an
 Supplier receives the purchaseelectronic version of the purchase
order and enters it into the order entryorder and transmits it automatically to
system. the supplier.
 Buyer calls supplier to determine if Supplier's order entry system
purchase order has been received, orreceives the purchase order and
supplier mails buyer an acknowledgmentupdates the system immediately on
of the order. receipt.
 Supplier's order entry system
creates an acknowledgment an
transmits it back to confirm receipt.

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