Friday, December 28, 2007
An Interview on Mcommerce
The E-Commerce Times spoke with Jeff Torgerson of Idearc, a multi-platform advertising provider. As senior product manager, Torgerson is responsible for driving his company's mobile strategy and products.
E-Commerce Times: The U.S. has mostly lagged behind other parts of the world -- namely Asia and Europe -- in terms of consumer acceptance of mobile handset Web features. Why do you believe that is?
Jeff Torgerson: I think there's a key difference in the U.S. versus Asia and some other markets, in that the PC has much deeper penetration in households in the U.S. market. Most households in the U.S. have PCs; a lot of them have multiple PCs. And if you look in especially Asian and some other markets, the PC market is not so deep. Individual users are accessing the Internet and getting their Web applications all done through mobile devices. And the open networks that we're talking about in the U.S. now aren't essentially fully open in other markets, but there's a lot more third-party development. Look at what NTT DoCoMo (NYSE: DCM) has done, as far as having third-party developers bring applications onto their devices and get them out to users.
The actual network speeds over there couple with that. They basically bring a much better user experience for the end consumer. That has got them to drive basically away from household PC usage and toward mobile usage out and about, including things like location-based services.
E-Commerce Times: We're seeing sort of a trend toward open networks over here too. Do you think opening networks here will lead to a wider use of Web applications on mobile handsets in the U.S.?
Torgerson: I do believe that opening up networks and getting more people developing can help out. If you look at just pure opening of the networks -- like with Verizon's (NYSE: VZ) press release about their network opening up, then AT&T's (NYSE: T) follow-up -- really getting additional devices on the network is only one point of it. You actually start having to get additional applications developed, and the base operating system that can be running those [has to expand]. Look at the Open Handset Alliance and the Android platform, and what they're trying to build out.
Couple those thing together, and I think you're going to see over the next couple of years a lot more things branching out.
E-Commerce Times: How about higher data transfer rates with wider use of 3G networks -- is that going to play into this as well?
Torgerson: If you look at pure content adoption, I believe definitely it does -- you look at people using mobile TV and things of that nature. ... Idearc has released video ads as part of our product line. So we can start bringing that sort of stuff to the mobile product, and as the broadband speeds get quicker in the devices, those things become essentially mobile-enabled and better for consumers -- and better for advertisers as well.
E-Commerce Times: It looks like the mobile Web is going in two different directions. There's the true Internet experience on handsets like the iPhone, which tries to give you the most desktop-like browser it can on a small screen. But then there are also phones that de-emphasize the browser in favor of Web-enabled features like map applications, social network mini-apps, music services, etc.-- it's all built for handset use specifically. Which of these directions has a better future?
Torgerson: In the short term, if you look at what thick-client applications are able to provide, [they] provide a much richer user experience. From a consumer standpoint, if you're trying to use a device and you're struggling with it, it's going to be something you're not very willing to adopt. So when I look at the iPhone example that you talked about, sure, the Safari browser on the iPhone can bring you the "real" Internet, as they call it. But if you've actually spent any time with it -- and I have a device myself -- you're able to go to any Web site that you want. When you have content and a user experience that's optimized for the device that you're working on, it's always a much more engaging and more compelling experience.
Especially when you start looking at trying to monetize those applications, which obviously everybody's trying to do, you can start leveraging stuff a little better if you have a good user experience and can drive consumers to the data they need and then actually get advertisers in place where it makes sense. You struggle when you're just trying to throw up a Web page on a small device with a small screen and trying to pan around and scroll to see stuff. It just doesn't work quite as well.
E-Commerce Times: The small screen question plays into advertising as well. In terms of screen real estate, users only have so much screen to use when they're trying to find the content that they're actively looking for. How does advertising get into that space when it's already pretty crammed on that screen as it is?
Torgerson: With the product we have, we really focus on relevancy for the consumer, and that's the key thing you need to pay attention to up front as you're building applications. If you take the experience that we've had on the Web, with people throwing banner ads and a lot of clicked advertising on the sidebars, it just doesn't work in a mobile experience, like you mentioned.
We've taken the approach that you look at how users are actually consuming the application, whether they're doing a keyword type search or a categorical type search, and you figure out what types of advertisers can work in those scenarios. So on a keyword search, if you have advertising that makes sense from a pay-per-click or a pay-per-call method that you can actually bring into the results, that's fine -- because it's good, relevant results for the users and you can still provide value to your advertisers. If you look at, say, categorical search, we actually took some time on our application to pare down the categories that you would be finding on the Web.
An example would be if you're searching for coffee when you're out and about. [With] a categorical search on our product, you're not going to be bringing back coffee wholesalers, the reason being that you're probably, in a mobile environment, not looking for those sorts of things. You're not in a research mode, you're in a transaction mode to find coffee, probably. What we do is look at those categories and how you can actually sell into those and bring advertiser value to a categorical search -- but then bring something to the consumer that is actually engaging to them.
E-Commerce Times: There are so many mobile browsers, operating systems, carriers and devices on the market right now. How is the mobile marketing industry dealing with such a broad array of standards out there?
Torgerson: It's definitely a challenge. I think back to the old browser war days when you had Netscape and IE as the two main browsers. You'd try to visit a Web site and you'd get the error message saying, "This site is optimized for IE." At least in those days, people were telling you what they were optimized for, and you really only had a couple choices.
The combination you have today is a series of devices that are either WAP (wireless application protocol) or XHTML (Extensible HyperText Markup Language) devices. Then you look at it even as a browser manufacturer, so you look at an open wave browser that may be deployed on multiple handsets. Based on carrier configurations, you even have different experiences across devices with the exact same version of the browser. So it compounds things greatly when you're trying to build applications.
The problem with that is, as you're trying to bring out applications to market and bring a good user experience, unless you have deeper pockets to spend the time and build across all those devices and make it work for the user in the most optimal fashion, you have a lot of developers who are bringing applications to market at the lowest common denominator. That's basically translating to poor user experiences. From an end-user perspective you're not getting exactly what you want out of the application -- and from an advertiser -- if you're trying to provide advertising on these devices. You're not getting much value out of it, because people aren't very engaged in staying on the device.
From our standpoint, you need to focus on the key devices and look at market penetration for those devices, and try to build out experiences that make sense. The problem in the market that I see is that unless you have resources to be able to do that, you might have a fantastic product with some great ideas to bring to market, but if you don't have the ability to deploy that across multiple devices, you're never going to get good penetration there. ...
E-Commerce Times: Are there any advertising opportunities that the mobile Web has that the desktop Web doesn't or hasn't yet explored?
Torgerson: I definitely believe so. If you look at the product that we've had to market for a year and a half now, we've actually focused on the get-go on location-based service. We really feel that when you're out and about, where you are is key to you, obviously. There are certain things you're willing to drive some distance for and certain things you're not willing to drive for. So the application being able to know where you are -- and react to that -- is important.
Initially, when we deployed on Sprint Nextel (NYSE: S) for our first deployment, we had essentially the same thing Google (Nasdaq: GOOG) has right now with the MyLocation feature, the ability to find out where you are even if your device isn't GPS-enabled. Think of it from a traveling standpoint -- you go into a new town and you need to find dinner, for example. You don't necessarily need to know your exact address; you need to know I'm roughly here, and where's the closest restaurant that I want to find. ...
If you start looking at having location-based services available and extend it to the advertising model, you can start doing things. ... If somebody's willing to click or somebody's willing to call your business, how valuable is that to you? If I can guarantee I'm bringing people to your doorstep, how valuable is that to you? You start to extend the location-based services into the advertising model. I think it can provide a lot of value for the advertising relationships there.
E-Commerce Times: The U.S. has mostly lagged behind other parts of the world -- namely Asia and Europe -- in terms of consumer acceptance of mobile handset Web features. Why do you believe that is?
Jeff Torgerson: I think there's a key difference in the U.S. versus Asia and some other markets, in that the PC has much deeper penetration in households in the U.S. market. Most households in the U.S. have PCs; a lot of them have multiple PCs. And if you look in especially Asian and some other markets, the PC market is not so deep. Individual users are accessing the Internet and getting their Web applications all done through mobile devices. And the open networks that we're talking about in the U.S. now aren't essentially fully open in other markets, but there's a lot more third-party development. Look at what NTT DoCoMo (NYSE: DCM) has done, as far as having third-party developers bring applications onto their devices and get them out to users.
The actual network speeds over there couple with that. They basically bring a much better user experience for the end consumer. That has got them to drive basically away from household PC usage and toward mobile usage out and about, including things like location-based services.
E-Commerce Times: We're seeing sort of a trend toward open networks over here too. Do you think opening networks here will lead to a wider use of Web applications on mobile handsets in the U.S.?
Torgerson: I do believe that opening up networks and getting more people developing can help out. If you look at just pure opening of the networks -- like with Verizon's (NYSE: VZ) press release about their network opening up, then AT&T's (NYSE: T) follow-up -- really getting additional devices on the network is only one point of it. You actually start having to get additional applications developed, and the base operating system that can be running those [has to expand]. Look at the Open Handset Alliance and the Android platform, and what they're trying to build out.
Couple those thing together, and I think you're going to see over the next couple of years a lot more things branching out.
E-Commerce Times: How about higher data transfer rates with wider use of 3G networks -- is that going to play into this as well?
Torgerson: If you look at pure content adoption, I believe definitely it does -- you look at people using mobile TV and things of that nature. ... Idearc has released video ads as part of our product line. So we can start bringing that sort of stuff to the mobile product, and as the broadband speeds get quicker in the devices, those things become essentially mobile-enabled and better for consumers -- and better for advertisers as well.
E-Commerce Times: It looks like the mobile Web is going in two different directions. There's the true Internet experience on handsets like the iPhone, which tries to give you the most desktop-like browser it can on a small screen. But then there are also phones that de-emphasize the browser in favor of Web-enabled features like map applications, social network mini-apps, music services, etc.-- it's all built for handset use specifically. Which of these directions has a better future?
Torgerson: In the short term, if you look at what thick-client applications are able to provide, [they] provide a much richer user experience. From a consumer standpoint, if you're trying to use a device and you're struggling with it, it's going to be something you're not very willing to adopt. So when I look at the iPhone example that you talked about, sure, the Safari browser on the iPhone can bring you the "real" Internet, as they call it. But if you've actually spent any time with it -- and I have a device myself -- you're able to go to any Web site that you want. When you have content and a user experience that's optimized for the device that you're working on, it's always a much more engaging and more compelling experience.
Especially when you start looking at trying to monetize those applications, which obviously everybody's trying to do, you can start leveraging stuff a little better if you have a good user experience and can drive consumers to the data they need and then actually get advertisers in place where it makes sense. You struggle when you're just trying to throw up a Web page on a small device with a small screen and trying to pan around and scroll to see stuff. It just doesn't work quite as well.
E-Commerce Times: The small screen question plays into advertising as well. In terms of screen real estate, users only have so much screen to use when they're trying to find the content that they're actively looking for. How does advertising get into that space when it's already pretty crammed on that screen as it is?
Torgerson: With the product we have, we really focus on relevancy for the consumer, and that's the key thing you need to pay attention to up front as you're building applications. If you take the experience that we've had on the Web, with people throwing banner ads and a lot of clicked advertising on the sidebars, it just doesn't work in a mobile experience, like you mentioned.
We've taken the approach that you look at how users are actually consuming the application, whether they're doing a keyword type search or a categorical type search, and you figure out what types of advertisers can work in those scenarios. So on a keyword search, if you have advertising that makes sense from a pay-per-click or a pay-per-call method that you can actually bring into the results, that's fine -- because it's good, relevant results for the users and you can still provide value to your advertisers. If you look at, say, categorical search, we actually took some time on our application to pare down the categories that you would be finding on the Web.
An example would be if you're searching for coffee when you're out and about. [With] a categorical search on our product, you're not going to be bringing back coffee wholesalers, the reason being that you're probably, in a mobile environment, not looking for those sorts of things. You're not in a research mode, you're in a transaction mode to find coffee, probably. What we do is look at those categories and how you can actually sell into those and bring advertiser value to a categorical search -- but then bring something to the consumer that is actually engaging to them.
E-Commerce Times: There are so many mobile browsers, operating systems, carriers and devices on the market right now. How is the mobile marketing industry dealing with such a broad array of standards out there?
Torgerson: It's definitely a challenge. I think back to the old browser war days when you had Netscape and IE as the two main browsers. You'd try to visit a Web site and you'd get the error message saying, "This site is optimized for IE." At least in those days, people were telling you what they were optimized for, and you really only had a couple choices.
The combination you have today is a series of devices that are either WAP (wireless application protocol) or XHTML (Extensible HyperText Markup Language) devices. Then you look at it even as a browser manufacturer, so you look at an open wave browser that may be deployed on multiple handsets. Based on carrier configurations, you even have different experiences across devices with the exact same version of the browser. So it compounds things greatly when you're trying to build applications.
The problem with that is, as you're trying to bring out applications to market and bring a good user experience, unless you have deeper pockets to spend the time and build across all those devices and make it work for the user in the most optimal fashion, you have a lot of developers who are bringing applications to market at the lowest common denominator. That's basically translating to poor user experiences. From an end-user perspective you're not getting exactly what you want out of the application -- and from an advertiser -- if you're trying to provide advertising on these devices. You're not getting much value out of it, because people aren't very engaged in staying on the device.
From our standpoint, you need to focus on the key devices and look at market penetration for those devices, and try to build out experiences that make sense. The problem in the market that I see is that unless you have resources to be able to do that, you might have a fantastic product with some great ideas to bring to market, but if you don't have the ability to deploy that across multiple devices, you're never going to get good penetration there. ...
E-Commerce Times: Are there any advertising opportunities that the mobile Web has that the desktop Web doesn't or hasn't yet explored?
Torgerson: I definitely believe so. If you look at the product that we've had to market for a year and a half now, we've actually focused on the get-go on location-based service. We really feel that when you're out and about, where you are is key to you, obviously. There are certain things you're willing to drive some distance for and certain things you're not willing to drive for. So the application being able to know where you are -- and react to that -- is important.
Initially, when we deployed on Sprint Nextel (NYSE: S) for our first deployment, we had essentially the same thing Google (Nasdaq: GOOG) has right now with the MyLocation feature, the ability to find out where you are even if your device isn't GPS-enabled. Think of it from a traveling standpoint -- you go into a new town and you need to find dinner, for example. You don't necessarily need to know your exact address; you need to know I'm roughly here, and where's the closest restaurant that I want to find. ...
If you start looking at having location-based services available and extend it to the advertising model, you can start doing things. ... If somebody's willing to click or somebody's willing to call your business, how valuable is that to you? If I can guarantee I'm bringing people to your doorstep, how valuable is that to you? You start to extend the location-based services into the advertising model. I think it can provide a lot of value for the advertising relationships there.
Wednesday, December 26, 2007
Ecommerce Tutorial
Introduction
Welcome to the eCommerce Tutorial. Would you like to be able to accept secure, real time credit card transactions on your web site? Well, here's how! This tutorial will show you how to get started in the complex and exciting world of Electronic Commerce.
This is how eCommerce works
The consumer moves through the internet to the merchant's web site. From there, he decides that he wants to purchase something, so he is moved to the online transaction server, where all of the informatio
n he gives is encrypted. Once he has placed his order, the information moves through a private gateway to a Processing Network, where the issuing and acquiring banks complete or deny the transaction. This generally takes place in no more than 5-7 seconds.There are many different payment systems available to accommodate the varied processing needs of merchants, from those who have a few orders a day to those who process thousands of transactions daily. With the addition of Secure Socket Layer technology, eCommerce is also a very safe way to complete transactions.There are several basic steps involved in becoming eCommerce Enabled.
Getting an Internet Merchant Bank Account; Web Hosting; Obtaining a Digital certificate; Finding a Provider of Online Transactions; Creating or Purchasing a Shopping Cart Software
Getting an Internet Merchant Bank Account
In order to be able to accept credit cards over the internet, you must apply to your bank for an Internet Merchant Bank Account. This can be relatively easy or somewhat difficult, depending on which country you live in and what bank you are with.U.S.A.:In the US, this is a fairly simple procedure. Many banks offer Internet Merchant Accounts, and most Online Transaction Providers will support them. See your bank for details.International:Since the vast majority of Online Transaction Providers are located in the US and are restricted in their ability to interact with banks outside their own country, international merchants have very little choice. An international merchant has to find a way to get a US merchant account, embark on the equally difficult task of finding a local Online Transaction Provider, or utilise one of the few companies that services the international market. Also, many banks outside the US have very restrictive policies regarding internet accounts. Luckily, the situation is improving, and most Online Transaction Providers will help you with this if you get in touch with them.In the ratings section, I have included information on which providers give international service.Here are some additional issues to keep in mind when you apply for a Merchant Bank Account:
A US merchant account can take up to a month to come through.
If you already have a merchant bank account, you will probably also need to upgrade it to an Internet account.
Ensure that your bank accepts Internet merchant accounts and has credit card processors that can connect to FDC, Paymentech or CyberCash.
Your account must be able to handle Card Not Present transactions.
Obtaining a Digital Certificate
A digital certificate, also known as a SSL Server Certificate, enables SSL (Secure Socket Layer encryption) on the web server. SSL protects communications so you can take credit card orders securely and ensure that hackers cannot eavesdrop on you. Any eCommerce company will require you to have SSL before you can use their services.Thankfully, for most people obtaining a digital certificate is not a problem. For a minimal fee, one can usually use the certificate owned by the web hosting company where your page resides. If you are a larger company, however, you may want to get your own digital certificate. A certificate costs about $125.00 and can be obtained from Thawte or Verisign.
Web Hosting
Web hosting is a very important step in this process, as this is how you gain a presence on the internet in the first place.It is important that the web hosting company is capable of providing you with the level of service that you need to maintain your Web Store. A few things to look for are:
Good uptime
Good technical support
Fast connection to the Net
Staff that is knowledgable about eCommerce
Compatibility with major eCommerce providers
It is always good to spend some time when choosing a web hosting company, as there are many 'fly-by-night' businesses out there. For the money you're spending, make sure that the company is reputable.
Finding a Provider of Online Transactions
Before you start looking for a provider, you should stop for a moment and consider what exactly you need. How many transactions do you expect to be completing in a month? How many products do you have to put on your web site? How complex does the There are a lot of online transaction providers out there, and they all have varying packages. Deciding on a provider's package that fits your needs is perhaps the most important aspect in creating an eCommerce website.The Directory page provides a good cross section of the companies out there. It is a good idea to go through a few of them and compare their prices and services. For a quick breakdown of the most popular packages these companies provide, visit the Summary section.
Shopping Cart Software
Shopping cart software is an operating system that can be used to allow people to purchase your items, keep track of your accounts, and tie together all of the aspects of your eCommerce site into one cohesive whole.While there are many other types of software that you can use in it's place, such as catalog software or a flat order form, shopping cart software is the most popular and the most widely known.Many Online Transaction Providers will have shopping cart software that comes with their service, but it can often be very expensive, so be warned. If you cannot afford to spend at least a couple of hundred dollars on this software, you should be looking for a package that offers it as a rental included in the monthly service charge, or one that offers a simple flat order form.
Conclusion
eCommerce can be a very rewarding venture, but it should not be undertaken lightly. There is a lot of information to absorb. Here are some additional tips on creating a successful Online Store:
If you know nothing about web design, it is probably a good idea to hire a designer.
Marketing your site is very important on the web. Here are some useful tips: - Submit your site to as many search engines as possible. - Try finding web sites with similar themes and make deals to create reciprocal links. - Create an advertising banner and purchase space from a popular website to display it. - Put your URL in the signature file of your email and the header of all business corespondence. - Word of mouth is very powerful on the Net; tell all of your friends about your page. - Avoid spamming - it is a sure way to get a very bad reputation.
Investigate the web sites that are possible rivals and formulate a strategy for competing against them.
If you anticipate a lot of growth in the amount of orders coming through your site, figure out how you are going to cope with the increased load before you get swamped.
Now that you know the basics, you should be able to make some informed decisions about how to proceed. Remember that you can ask for further advise from the company that you decide to employ.
Extracted from: www.online-commerce.com/tutorial5.html
Friday, December 21, 2007
Essentials of ecommerce
Whether you call it Internet commerce, or ecom, or ecommerce, or immerce, it means essentially the same thing. These terms mean buying or selling something electronically, and the time has never been better to jump in.
If you have something you'd like to sell on the Net, new technologies have opened up an array of ecom options -- there's one to suit every need and requirement.
Most importantly, ecom is safe. Experts tell us that online transactions are every bit as safe as face to face transactions-- although neither can be guaranteed to be 100% risk free. You're just as likely to be mugged on your way to the Bank Machine as you are to run into security problems with Internet commerce!
But ecommerce can be a confusing subject and many of us need a little help sorting it all out. If the jargon is confusing, read on and I’ll explain some of the basic concepts. This document contains three categories of information:
Definition of Ecommerce Terms
Commerce Service Providers (CSP)
CSPs are business or web sites that provide ecommerce solutions.
Digital or Electronic Cash or E-cash or Ecash or Digital Money
These terms are also used interchangeably, and they refer to any of the various methods that allow a person to purchase goods or services by transmitting a number from one computer to another. The numbers are issued by a bank and represent sums of real money. Digital cash is anonymous and reusable. Unlike credit card transactions, the merchant does not know the identity of the shopper. Yahoo’ Listing of Companies Providing various e-commerce solutions. Cybercash and E-cash are two well known methods.
Electronic Checks or Cheques
Customers pay for merchandise by writing an electronic check that is transmitted electronically by email, fax or phone. The "cheque" is a message that contains all of the information that is found on an ordinary cheque, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Various companies are selling Electronic Check software and services.
Electronic Wallet
Electronic Wallets store your credit card numbers on your hard drive in an encrypted form. You then make purchases at Web sites that support that particular type of electronic wallet . By clicking on a Pay Button, customers initiate a credit card payment via a secure transaction enabled by the electronic wallet company’s server.
Electronic Commerce or Ecom or Emmerce or EC
These terms are used interchangeably, and they all mean the same thing — the paperless exchange of routine business information using Electronic Data Interchange (EDI) , email, electronic bulletin boards, fax transmissions and Electronic Funds Transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of "soft merchandise" (software, documents, graphics, music, etc.), and business to business transactions.
Extranet
An extranet is an extension of a corporate intranet. It connects the internal network of one company with the intranets of its customers and suppliers. This makes it possible to create e-commerce applications that link all aspects of a business relationship, from ordering to payment.
Disintermediation
Disintermediation is the process of bypassing retail channels or mail order houses and selling directly to the customer.
Hard Goods vs Soft Goods
Hard Goods are items that exist in the real world, as opposed to soft goods, which exist virtually or electronically. For instance, an Internet merchant selling a book that is shipped to the customer in a print version is selling hard goods; a merchant offering a book for download in electronic format is selling soft goods.
High Risk Processors
High risk processors (or brokers) are financial institutions or companies that that issue merchant status accounts to high risk businesses. They offset their risks by charging higher transaction fees and higher rates than traditional banks do. However, the initial outlay of cash that you will be required to put up is usually much less than the large deposits required by traditional banking institutions. Some brokers may offer other added features such as shopping cart software, web site templates, forms or secure lines for ordering.
Immerce
Immerce is the new term being used for commerce that is transacted totally over the Internet.
Merchant Account
A Merchant Account is a relationship between a business (i.e. a merchant) and a merchant bank which allows the retailer or merchant to accept credit card payments from customers. Depending on the country involved, banks or financial institutions could have stiff requirements and regulations regarding the issuing of a merchant account. Many small or home based businesses report that they have great (sometimes insurmountable) difficulties acquiring Merchant Status. If Merchant Status is obtained, the merchant then rents or buys special software that is used to process the transaction. In some cases, depending on the bank and depending on the type of business that you are operating, you will also need to purchase or rent a piece of hardware known as a processing terminal.
An Internet Merchant Account is a special account that permits the acceptance of credit cards online. Transactions are processed online, in real time. While the customer waits, the system checks the credit card to be sure that it has not been reported stolen, has not expired, and is listed to the same address that the customer has given. If the card is approved, the customer and the merchant are both automatically notified that the sale has transpired. This type of account is a stricter banking relationship than one involving face-to-face transactions. Web transactions do not gather signatures from purchasers and therefore there is a higher risk of fraud.
Merchant Brokers specialize in obtaining credit card accounts for online businesses. Brokers charge a setup fee and lease or sell the software and hardware as needed. Expect to pay a discount rate, which is the percentage you pay for each transaction processed, as well as various other charges that differ among services. If obtaining a merchant account through a traditional bank is proving to be a problem, merchant brokers are a good alternative.
Microtransactions or Micropayments
Microtransactions are transactions of tiny amounts — a few cents or a few dollars, typically made in order to download or access graphics, games, and information.
Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount will be billed to his or her telephone bill. To date, this is being used for soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.For a sample, check eCharge Corporation
Facts About Accepting Credit Cards Online
Before you can accept credit cards (either online or offline), you must have a Merchant Account, which is a special arrangement with a banking institution. Small and home businesses often experience difficulties qualifying for a merchant account, and Web based businesses run into even more problems.
The situation is this: Online transactions don’t take place at the point of sale (POS). They are considered to be "non-face-to-face" transactions. Since there is no way of ascertaining the customer’s identification, there is no way to be sure that the customer is the legitimate card holder. Therefore, financial institutions are leery about the high potential for fraud.
Moreover, the major credit card companies offer their card holders the right to contest charges on their statements that may be the result of theft, fraud or error. A contested charge is referred to as a chargeback. When a chargeback occurs, the merchant will end up paying the charge to the issuing bank, in addition to a chargeback fee that can be as high as $30 or more. For example, if you sell a book for $20 through a credit card transaction, and the cardholder later contests the sale, you will end up paying your bank the $20 PLUS a chargeback fee of $10 to $30 dollars.
Consequently, many banks require a reserve fee when issuing merchant status. Typically, face to face sales have a chargeback rate of 1% of all sales. The potential for chargebacks is greater when it is an online sale, so the risk to both bank and merchant increases.
To minimize their risks, most banks have stringent requirements that a business must meet to establish eligibility for merchant status. Factors considered include cash reserves, length of time in business, tax returns, credit history, debt load, refund policies, volume of business, cost of item being sold, and other sources of income.
High Risk Processors are merchant acquirers that specialize in high risk business. They offset their risks by charging you higher transaction fees and higher rates. In the US, the Electronic Card Systems Inc. and Card Service International are two of the better known examples. Merchants living outside the US will be required to find a service that works with their own banking institutions.
Other Associated Expenses
The chargeback expense is the first and foremost concern for a merchant hoping to acquire a merchant account. Chargebacks can result in serious financial loss to the would-be merchant. Also, merchants who encounter too many chargebacks are at risk of losing their merchant account.
However, there are other charges and expenses to factor into the budget as well. Merchants will need to investigate hidden equipment costs, setup fees, line charges, bank transactions fees, holdbacks, and discount rates, etc. These vary considerably among service providers, so compare, compare, compare!
Ecommerce Solutions Compared
There are dozens, perhaps hundreds of businesses and organizations eager to assist you sell your product online. Basically, they fall into four categories: credit card transactions, digital cash transactions, electronic fund transfers and telephone billing systems. No solution is perfect and each comes with its own set of pros and cons. The right choice for you depends upon your specific business requirements.
1. Merchant Internet Accounts.
If you have a merchant status, you will need to consider the following factors:Pros:
Consumers are familiar with credit cards.
With credit card transactions, consumers don’ have to download and install special plugins.
Credit card sales lends itself to impulse buying.
You have the customers' contact information for follow up sales and marketing purposes. (This is a pro for the merchant but a con from the point of view of many customers, who prefer anonymity.)
Cons:
Consumers still have concerns regarding providing financial information online.
Not everyone has a credit card.
Vendors wanting to sell down loadable soft goods will need to find a way to ensure the product is paid for, either before or after the download.
You will have to deal with chargebacks.
If you can’t or won’t get a merchant account through your regular banking institution, you still have the broker option open to you. Brokers can often arrange merchant accounts for businesses who are deemed high risk. Setup fees and discount fees apply.
2. Electronic Cash Transactions
Electronic money is an arrangement whereby the customer pays for the merchandise using electronic money. Examples of this are the well known DigiCash, Cyberbucks, CyberCash, etc. As consumers become more comfortable providing credit card information over the Net, these methods are less utilized.
The Pros
No credit card transactions are required.
No concerns re chargebacks.
Lends itself well to micropayments.
Cons
Many people are unfamiliar with the concept and shy away from unknown entities.
The process is perceived as "a hassle" to some shoppers who prefer to simply give credit card information.
Both merchant and customer must be participating in the same scheme before this method of ecom can be used.
Eliminates the possibility of impulse buying, unless both customer and merchant are already in same scheme.
May not be available globally.
Check out Digicash and Cybercash
3. Electronic Fund Transfers
Funds are transferred electronically from the customers bank account to yours. (This is a highly simplified explanation, and is accurate in the most general sort of way. However, the bottom line is that the customer buys, and at some point the funds are removed from his or her account and ultimately deposited into yours.)
The best known method is the issuing of electronic checks Customers pay for merchandise by writing an electronic check that is transmitted by email, fax or phone. The "check" is a message that contains all of the information that is found on an ordinary check, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Pros
No credit card worries
Available to persons without credit cards
Cons
A very new technology that some perceive as being less secure than other forms of ecommerce.
Many customers are not set up to issue electronic cheques; time required to make the arrangements eliminates impulse buying.
May not be available to international consumers.
4. Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount is billed to his or her telephone bill. To date, this is being used for the sale of soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.
eCharge Corporation is a pioneer in the use of this technology.
Pros
Eliminates worries about credit cards (for both consumer and merchant)
Safeguards soft merchandise – no possibility of theft or pirating.
Available to customers without credit cards
Cons
Customer is required to download and install a plugin.
Currently available only for sale of soft merchandise but can do some limited transactions for hard goods.
Not available for all computer platforms.
Currently available for sales using telephone modems, and will not work for transactions over cable modems and ISDN lines.
Coverage is not global.
5. One-Stop Shops
More recently, with the huge interest shown in ecommerce, a multitude of services and products have become available. It's now a possibility to find a service that will broker your Internet Merchant Account, as well as providing web site storage, a template for designing your site, shopping cart software, a form generator, a secure line for safe online ordering, and more. IBM, ICAT and Vantage are examples of businesses offering these all-encompassing services. They are excellent starting points for the entrepreneur who wants to delve into ecommerce.
OR try the excellent SureFire, one of the SiteSell family of products.
If you are looking for a one-stop shop that makes everything fast and easy for you ... from building the site to submitting to search engines to providing an ecommerce solution and a whole lot more, then check out Site Build It, another hugely popular product from the SiteSell family.
Definition of Ecommerce Terms
Commerce Service Providers (CSP)
CSPs are business or web sites that provide ecommerce solutions.
Digital or Electronic Cash or E-cash or Ecash or Digital Money
These terms are also used interchangeably, and they refer to any of the various methods that allow a person to purchase goods or services by transmitting a number from one computer to another. The numbers are issued by a bank and represent sums of real money. Digital cash is anonymous and reusable. Unlike credit card transactions, the merchant does not know the identity of the shopper. Yahoo’ Listing of Companies Providing various e-commerce solutions. Cybercash and E-cash are two well known methods.
Electronic Checks or Cheques
Customers pay for merchandise by writing an electronic check that is transmitted electronically by email, fax or phone. The "cheque" is a message that contains all of the information that is found on an ordinary cheque, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Various companies are selling Electronic Check software and services.
Electronic Wallet
Electronic Wallets store your credit card numbers on your hard drive in an encrypted form. You then make purchases at Web sites that support that particular type of electronic wallet . By clicking on a Pay Button, customers initiate a credit card payment via a secure transaction enabled by the electronic wallet company’s server.
Electronic Commerce or Ecom or Emmerce or EC
These terms are used interchangeably, and they all mean the same thing — the paperless exchange of routine business information using Electronic Data Interchange (EDI) , email, electronic bulletin boards, fax transmissions and Electronic Funds Transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of "soft merchandise" (software, documents, graphics, music, etc.), and business to business transactions.
Extranet
An extranet is an extension of a corporate intranet. It connects the internal network of one company with the intranets of its customers and suppliers. This makes it possible to create e-commerce applications that link all aspects of a business relationship, from ordering to payment.
Disintermediation
Disintermediation is the process of bypassing retail channels or mail order houses and selling directly to the customer.
Hard Goods vs Soft Goods
Hard Goods are items that exist in the real world, as opposed to soft goods, which exist virtually or electronically. For instance, an Internet merchant selling a book that is shipped to the customer in a print version is selling hard goods; a merchant offering a book for download in electronic format is selling soft goods.
High Risk Processors
High risk processors (or brokers) are financial institutions or companies that that issue merchant status accounts to high risk businesses. They offset their risks by charging higher transaction fees and higher rates than traditional banks do. However, the initial outlay of cash that you will be required to put up is usually much less than the large deposits required by traditional banking institutions. Some brokers may offer other added features such as shopping cart software, web site templates, forms or secure lines for ordering.
Immerce
Immerce is the new term being used for commerce that is transacted totally over the Internet.
Merchant Account
A Merchant Account is a relationship between a business (i.e. a merchant) and a merchant bank which allows the retailer or merchant to accept credit card payments from customers. Depending on the country involved, banks or financial institutions could have stiff requirements and regulations regarding the issuing of a merchant account. Many small or home based businesses report that they have great (sometimes insurmountable) difficulties acquiring Merchant Status. If Merchant Status is obtained, the merchant then rents or buys special software that is used to process the transaction. In some cases, depending on the bank and depending on the type of business that you are operating, you will also need to purchase or rent a piece of hardware known as a processing terminal.
An Internet Merchant Account is a special account that permits the acceptance of credit cards online. Transactions are processed online, in real time. While the customer waits, the system checks the credit card to be sure that it has not been reported stolen, has not expired, and is listed to the same address that the customer has given. If the card is approved, the customer and the merchant are both automatically notified that the sale has transpired. This type of account is a stricter banking relationship than one involving face-to-face transactions. Web transactions do not gather signatures from purchasers and therefore there is a higher risk of fraud.
Merchant Brokers specialize in obtaining credit card accounts for online businesses. Brokers charge a setup fee and lease or sell the software and hardware as needed. Expect to pay a discount rate, which is the percentage you pay for each transaction processed, as well as various other charges that differ among services. If obtaining a merchant account through a traditional bank is proving to be a problem, merchant brokers are a good alternative.
Microtransactions or Micropayments
Microtransactions are transactions of tiny amounts — a few cents or a few dollars, typically made in order to download or access graphics, games, and information.
Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount will be billed to his or her telephone bill. To date, this is being used for soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.For a sample, check eCharge Corporation
Facts About Accepting Credit Cards Online
Before you can accept credit cards (either online or offline), you must have a Merchant Account, which is a special arrangement with a banking institution. Small and home businesses often experience difficulties qualifying for a merchant account, and Web based businesses run into even more problems.
The situation is this: Online transactions don’t take place at the point of sale (POS). They are considered to be "non-face-to-face" transactions. Since there is no way of ascertaining the customer’s identification, there is no way to be sure that the customer is the legitimate card holder. Therefore, financial institutions are leery about the high potential for fraud.
Moreover, the major credit card companies offer their card holders the right to contest charges on their statements that may be the result of theft, fraud or error. A contested charge is referred to as a chargeback. When a chargeback occurs, the merchant will end up paying the charge to the issuing bank, in addition to a chargeback fee that can be as high as $30 or more. For example, if you sell a book for $20 through a credit card transaction, and the cardholder later contests the sale, you will end up paying your bank the $20 PLUS a chargeback fee of $10 to $30 dollars.
Consequently, many banks require a reserve fee when issuing merchant status. Typically, face to face sales have a chargeback rate of 1% of all sales. The potential for chargebacks is greater when it is an online sale, so the risk to both bank and merchant increases.
To minimize their risks, most banks have stringent requirements that a business must meet to establish eligibility for merchant status. Factors considered include cash reserves, length of time in business, tax returns, credit history, debt load, refund policies, volume of business, cost of item being sold, and other sources of income.
High Risk Processors are merchant acquirers that specialize in high risk business. They offset their risks by charging you higher transaction fees and higher rates. In the US, the Electronic Card Systems Inc. and Card Service International are two of the better known examples. Merchants living outside the US will be required to find a service that works with their own banking institutions.
Other Associated Expenses
The chargeback expense is the first and foremost concern for a merchant hoping to acquire a merchant account. Chargebacks can result in serious financial loss to the would-be merchant. Also, merchants who encounter too many chargebacks are at risk of losing their merchant account.
However, there are other charges and expenses to factor into the budget as well. Merchants will need to investigate hidden equipment costs, setup fees, line charges, bank transactions fees, holdbacks, and discount rates, etc. These vary considerably among service providers, so compare, compare, compare!
Ecommerce Solutions Compared
There are dozens, perhaps hundreds of businesses and organizations eager to assist you sell your product online. Basically, they fall into four categories: credit card transactions, digital cash transactions, electronic fund transfers and telephone billing systems. No solution is perfect and each comes with its own set of pros and cons. The right choice for you depends upon your specific business requirements.
1. Merchant Internet Accounts.
If you have a merchant status, you will need to consider the following factors:Pros:
Consumers are familiar with credit cards.
With credit card transactions, consumers don’ have to download and install special plugins.
Credit card sales lends itself to impulse buying.
You have the customers' contact information for follow up sales and marketing purposes. (This is a pro for the merchant but a con from the point of view of many customers, who prefer anonymity.)
Cons:
Consumers still have concerns regarding providing financial information online.
Not everyone has a credit card.
Vendors wanting to sell down loadable soft goods will need to find a way to ensure the product is paid for, either before or after the download.
You will have to deal with chargebacks.
If you can’t or won’t get a merchant account through your regular banking institution, you still have the broker option open to you. Brokers can often arrange merchant accounts for businesses who are deemed high risk. Setup fees and discount fees apply.
2. Electronic Cash Transactions
Electronic money is an arrangement whereby the customer pays for the merchandise using electronic money. Examples of this are the well known DigiCash, Cyberbucks, CyberCash, etc. As consumers become more comfortable providing credit card information over the Net, these methods are less utilized.
The Pros
No credit card transactions are required.
No concerns re chargebacks.
Lends itself well to micropayments.
Cons
Many people are unfamiliar with the concept and shy away from unknown entities.
The process is perceived as "a hassle" to some shoppers who prefer to simply give credit card information.
Both merchant and customer must be participating in the same scheme before this method of ecom can be used.
Eliminates the possibility of impulse buying, unless both customer and merchant are already in same scheme.
May not be available globally.
Check out Digicash and Cybercash
3. Electronic Fund Transfers
Funds are transferred electronically from the customers bank account to yours. (This is a highly simplified explanation, and is accurate in the most general sort of way. However, the bottom line is that the customer buys, and at some point the funds are removed from his or her account and ultimately deposited into yours.)
The best known method is the issuing of electronic checks Customers pay for merchandise by writing an electronic check that is transmitted by email, fax or phone. The "check" is a message that contains all of the information that is found on an ordinary check, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Pros
No credit card worries
Available to persons without credit cards
Cons
A very new technology that some perceive as being less secure than other forms of ecommerce.
Many customers are not set up to issue electronic cheques; time required to make the arrangements eliminates impulse buying.
May not be available to international consumers.
4. Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount is billed to his or her telephone bill. To date, this is being used for the sale of soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.
eCharge Corporation is a pioneer in the use of this technology.
Pros
Eliminates worries about credit cards (for both consumer and merchant)
Safeguards soft merchandise – no possibility of theft or pirating.
Available to customers without credit cards
Cons
Customer is required to download and install a plugin.
Currently available only for sale of soft merchandise but can do some limited transactions for hard goods.
Not available for all computer platforms.
Currently available for sales using telephone modems, and will not work for transactions over cable modems and ISDN lines.
Coverage is not global.
5. One-Stop Shops
More recently, with the huge interest shown in ecommerce, a multitude of services and products have become available. It's now a possibility to find a service that will broker your Internet Merchant Account, as well as providing web site storage, a template for designing your site, shopping cart software, a form generator, a secure line for safe online ordering, and more. IBM, ICAT and Vantage are examples of businesses offering these all-encompassing services. They are excellent starting points for the entrepreneur who wants to delve into ecommerce.
OR try the excellent SureFire, one of the SiteSell family of products.
If you are looking for a one-stop shop that makes everything fast and easy for you ... from building the site to submitting to search engines to providing an ecommerce solution and a whole lot more, then check out Site Build It, another hugely popular product from the SiteSell family.
If you have something you'd like to sell on the Net, new technologies have opened up an array of ecom options -- there's one to suit every need and requirement.
Most importantly, ecom is safe. Experts tell us that online transactions are every bit as safe as face to face transactions-- although neither can be guaranteed to be 100% risk free. You're just as likely to be mugged on your way to the Bank Machine as you are to run into security problems with Internet commerce!
But ecommerce can be a confusing subject and many of us need a little help sorting it all out. If the jargon is confusing, read on and I’ll explain some of the basic concepts. This document contains three categories of information:
Definition of Ecommerce Terms
Commerce Service Providers (CSP)
CSPs are business or web sites that provide ecommerce solutions.
Digital or Electronic Cash or E-cash or Ecash or Digital Money
These terms are also used interchangeably, and they refer to any of the various methods that allow a person to purchase goods or services by transmitting a number from one computer to another. The numbers are issued by a bank and represent sums of real money. Digital cash is anonymous and reusable. Unlike credit card transactions, the merchant does not know the identity of the shopper. Yahoo’ Listing of Companies Providing various e-commerce solutions. Cybercash and E-cash are two well known methods.
Electronic Checks or Cheques
Customers pay for merchandise by writing an electronic check that is transmitted electronically by email, fax or phone. The "cheque" is a message that contains all of the information that is found on an ordinary cheque, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Various companies are selling Electronic Check software and services.
Electronic Wallet
Electronic Wallets store your credit card numbers on your hard drive in an encrypted form. You then make purchases at Web sites that support that particular type of electronic wallet . By clicking on a Pay Button, customers initiate a credit card payment via a secure transaction enabled by the electronic wallet company’s server.
Electronic Commerce or Ecom or Emmerce or EC
These terms are used interchangeably, and they all mean the same thing — the paperless exchange of routine business information using Electronic Data Interchange (EDI) , email, electronic bulletin boards, fax transmissions and Electronic Funds Transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of "soft merchandise" (software, documents, graphics, music, etc.), and business to business transactions.
Extranet
An extranet is an extension of a corporate intranet. It connects the internal network of one company with the intranets of its customers and suppliers. This makes it possible to create e-commerce applications that link all aspects of a business relationship, from ordering to payment.
Disintermediation
Disintermediation is the process of bypassing retail channels or mail order houses and selling directly to the customer.
Hard Goods vs Soft Goods
Hard Goods are items that exist in the real world, as opposed to soft goods, which exist virtually or electronically. For instance, an Internet merchant selling a book that is shipped to the customer in a print version is selling hard goods; a merchant offering a book for download in electronic format is selling soft goods.
High Risk Processors
High risk processors (or brokers) are financial institutions or companies that that issue merchant status accounts to high risk businesses. They offset their risks by charging higher transaction fees and higher rates than traditional banks do. However, the initial outlay of cash that you will be required to put up is usually much less than the large deposits required by traditional banking institutions. Some brokers may offer other added features such as shopping cart software, web site templates, forms or secure lines for ordering.
Immerce
Immerce is the new term being used for commerce that is transacted totally over the Internet.
Merchant Account
A Merchant Account is a relationship between a business (i.e. a merchant) and a merchant bank which allows the retailer or merchant to accept credit card payments from customers. Depending on the country involved, banks or financial institutions could have stiff requirements and regulations regarding the issuing of a merchant account. Many small or home based businesses report that they have great (sometimes insurmountable) difficulties acquiring Merchant Status. If Merchant Status is obtained, the merchant then rents or buys special software that is used to process the transaction. In some cases, depending on the bank and depending on the type of business that you are operating, you will also need to purchase or rent a piece of hardware known as a processing terminal.
An Internet Merchant Account is a special account that permits the acceptance of credit cards online. Transactions are processed online, in real time. While the customer waits, the system checks the credit card to be sure that it has not been reported stolen, has not expired, and is listed to the same address that the customer has given. If the card is approved, the customer and the merchant are both automatically notified that the sale has transpired. This type of account is a stricter banking relationship than one involving face-to-face transactions. Web transactions do not gather signatures from purchasers and therefore there is a higher risk of fraud.
Merchant Brokers specialize in obtaining credit card accounts for online businesses. Brokers charge a setup fee and lease or sell the software and hardware as needed. Expect to pay a discount rate, which is the percentage you pay for each transaction processed, as well as various other charges that differ among services. If obtaining a merchant account through a traditional bank is proving to be a problem, merchant brokers are a good alternative.
Microtransactions or Micropayments
Microtransactions are transactions of tiny amounts — a few cents or a few dollars, typically made in order to download or access graphics, games, and information.
Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount will be billed to his or her telephone bill. To date, this is being used for soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.For a sample, check eCharge Corporation
Facts About Accepting Credit Cards Online
Before you can accept credit cards (either online or offline), you must have a Merchant Account, which is a special arrangement with a banking institution. Small and home businesses often experience difficulties qualifying for a merchant account, and Web based businesses run into even more problems.
The situation is this: Online transactions don’t take place at the point of sale (POS). They are considered to be "non-face-to-face" transactions. Since there is no way of ascertaining the customer’s identification, there is no way to be sure that the customer is the legitimate card holder. Therefore, financial institutions are leery about the high potential for fraud.
Moreover, the major credit card companies offer their card holders the right to contest charges on their statements that may be the result of theft, fraud or error. A contested charge is referred to as a chargeback. When a chargeback occurs, the merchant will end up paying the charge to the issuing bank, in addition to a chargeback fee that can be as high as $30 or more. For example, if you sell a book for $20 through a credit card transaction, and the cardholder later contests the sale, you will end up paying your bank the $20 PLUS a chargeback fee of $10 to $30 dollars.
Consequently, many banks require a reserve fee when issuing merchant status. Typically, face to face sales have a chargeback rate of 1% of all sales. The potential for chargebacks is greater when it is an online sale, so the risk to both bank and merchant increases.
To minimize their risks, most banks have stringent requirements that a business must meet to establish eligibility for merchant status. Factors considered include cash reserves, length of time in business, tax returns, credit history, debt load, refund policies, volume of business, cost of item being sold, and other sources of income.
High Risk Processors are merchant acquirers that specialize in high risk business. They offset their risks by charging you higher transaction fees and higher rates. In the US, the Electronic Card Systems Inc. and Card Service International are two of the better known examples. Merchants living outside the US will be required to find a service that works with their own banking institutions.
Other Associated Expenses
The chargeback expense is the first and foremost concern for a merchant hoping to acquire a merchant account. Chargebacks can result in serious financial loss to the would-be merchant. Also, merchants who encounter too many chargebacks are at risk of losing their merchant account.
However, there are other charges and expenses to factor into the budget as well. Merchants will need to investigate hidden equipment costs, setup fees, line charges, bank transactions fees, holdbacks, and discount rates, etc. These vary considerably among service providers, so compare, compare, compare!
Ecommerce Solutions Compared
There are dozens, perhaps hundreds of businesses and organizations eager to assist you sell your product online. Basically, they fall into four categories: credit card transactions, digital cash transactions, electronic fund transfers and telephone billing systems. No solution is perfect and each comes with its own set of pros and cons. The right choice for you depends upon your specific business requirements.
1. Merchant Internet Accounts.
If you have a merchant status, you will need to consider the following factors:Pros:
Consumers are familiar with credit cards.
With credit card transactions, consumers don’ have to download and install special plugins.
Credit card sales lends itself to impulse buying.
You have the customers' contact information for follow up sales and marketing purposes. (This is a pro for the merchant but a con from the point of view of many customers, who prefer anonymity.)
Cons:
Consumers still have concerns regarding providing financial information online.
Not everyone has a credit card.
Vendors wanting to sell down loadable soft goods will need to find a way to ensure the product is paid for, either before or after the download.
You will have to deal with chargebacks.
If you can’t or won’t get a merchant account through your regular banking institution, you still have the broker option open to you. Brokers can often arrange merchant accounts for businesses who are deemed high risk. Setup fees and discount fees apply.
2. Electronic Cash Transactions
Electronic money is an arrangement whereby the customer pays for the merchandise using electronic money. Examples of this are the well known DigiCash, Cyberbucks, CyberCash, etc. As consumers become more comfortable providing credit card information over the Net, these methods are less utilized.
The Pros
No credit card transactions are required.
No concerns re chargebacks.
Lends itself well to micropayments.
Cons
Many people are unfamiliar with the concept and shy away from unknown entities.
The process is perceived as "a hassle" to some shoppers who prefer to simply give credit card information.
Both merchant and customer must be participating in the same scheme before this method of ecom can be used.
Eliminates the possibility of impulse buying, unless both customer and merchant are already in same scheme.
May not be available globally.
Check out Digicash and Cybercash
3. Electronic Fund Transfers
Funds are transferred electronically from the customers bank account to yours. (This is a highly simplified explanation, and is accurate in the most general sort of way. However, the bottom line is that the customer buys, and at some point the funds are removed from his or her account and ultimately deposited into yours.)
The best known method is the issuing of electronic checks Customers pay for merchandise by writing an electronic check that is transmitted by email, fax or phone. The "check" is a message that contains all of the information that is found on an ordinary check, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Pros
No credit card worries
Available to persons without credit cards
Cons
A very new technology that some perceive as being less secure than other forms of ecommerce.
Many customers are not set up to issue electronic cheques; time required to make the arrangements eliminates impulse buying.
May not be available to international consumers.
4. Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount is billed to his or her telephone bill. To date, this is being used for the sale of soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.
eCharge Corporation is a pioneer in the use of this technology.
Pros
Eliminates worries about credit cards (for both consumer and merchant)
Safeguards soft merchandise – no possibility of theft or pirating.
Available to customers without credit cards
Cons
Customer is required to download and install a plugin.
Currently available only for sale of soft merchandise but can do some limited transactions for hard goods.
Not available for all computer platforms.
Currently available for sales using telephone modems, and will not work for transactions over cable modems and ISDN lines.
Coverage is not global.
5. One-Stop Shops
More recently, with the huge interest shown in ecommerce, a multitude of services and products have become available. It's now a possibility to find a service that will broker your Internet Merchant Account, as well as providing web site storage, a template for designing your site, shopping cart software, a form generator, a secure line for safe online ordering, and more. IBM, ICAT and Vantage are examples of businesses offering these all-encompassing services. They are excellent starting points for the entrepreneur who wants to delve into ecommerce.
OR try the excellent SureFire, one of the SiteSell family of products.
If you are looking for a one-stop shop that makes everything fast and easy for you ... from building the site to submitting to search engines to providing an ecommerce solution and a whole lot more, then check out Site Build It, another hugely popular product from the SiteSell family.
Definition of Ecommerce Terms
Commerce Service Providers (CSP)
CSPs are business or web sites that provide ecommerce solutions.
Digital or Electronic Cash or E-cash or Ecash or Digital Money
These terms are also used interchangeably, and they refer to any of the various methods that allow a person to purchase goods or services by transmitting a number from one computer to another. The numbers are issued by a bank and represent sums of real money. Digital cash is anonymous and reusable. Unlike credit card transactions, the merchant does not know the identity of the shopper. Yahoo’ Listing of Companies Providing various e-commerce solutions. Cybercash and E-cash are two well known methods.
Electronic Checks or Cheques
Customers pay for merchandise by writing an electronic check that is transmitted electronically by email, fax or phone. The "cheque" is a message that contains all of the information that is found on an ordinary cheque, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Various companies are selling Electronic Check software and services.
Electronic Wallet
Electronic Wallets store your credit card numbers on your hard drive in an encrypted form. You then make purchases at Web sites that support that particular type of electronic wallet . By clicking on a Pay Button, customers initiate a credit card payment via a secure transaction enabled by the electronic wallet company’s server.
Electronic Commerce or Ecom or Emmerce or EC
These terms are used interchangeably, and they all mean the same thing — the paperless exchange of routine business information using Electronic Data Interchange (EDI) , email, electronic bulletin boards, fax transmissions and Electronic Funds Transfer. It refers to Internet shopping, online stock and bond transactions, the downloading and selling of "soft merchandise" (software, documents, graphics, music, etc.), and business to business transactions.
Extranet
An extranet is an extension of a corporate intranet. It connects the internal network of one company with the intranets of its customers and suppliers. This makes it possible to create e-commerce applications that link all aspects of a business relationship, from ordering to payment.
Disintermediation
Disintermediation is the process of bypassing retail channels or mail order houses and selling directly to the customer.
Hard Goods vs Soft Goods
Hard Goods are items that exist in the real world, as opposed to soft goods, which exist virtually or electronically. For instance, an Internet merchant selling a book that is shipped to the customer in a print version is selling hard goods; a merchant offering a book for download in electronic format is selling soft goods.
High Risk Processors
High risk processors (or brokers) are financial institutions or companies that that issue merchant status accounts to high risk businesses. They offset their risks by charging higher transaction fees and higher rates than traditional banks do. However, the initial outlay of cash that you will be required to put up is usually much less than the large deposits required by traditional banking institutions. Some brokers may offer other added features such as shopping cart software, web site templates, forms or secure lines for ordering.
Immerce
Immerce is the new term being used for commerce that is transacted totally over the Internet.
Merchant Account
A Merchant Account is a relationship between a business (i.e. a merchant) and a merchant bank which allows the retailer or merchant to accept credit card payments from customers. Depending on the country involved, banks or financial institutions could have stiff requirements and regulations regarding the issuing of a merchant account. Many small or home based businesses report that they have great (sometimes insurmountable) difficulties acquiring Merchant Status. If Merchant Status is obtained, the merchant then rents or buys special software that is used to process the transaction. In some cases, depending on the bank and depending on the type of business that you are operating, you will also need to purchase or rent a piece of hardware known as a processing terminal.
An Internet Merchant Account is a special account that permits the acceptance of credit cards online. Transactions are processed online, in real time. While the customer waits, the system checks the credit card to be sure that it has not been reported stolen, has not expired, and is listed to the same address that the customer has given. If the card is approved, the customer and the merchant are both automatically notified that the sale has transpired. This type of account is a stricter banking relationship than one involving face-to-face transactions. Web transactions do not gather signatures from purchasers and therefore there is a higher risk of fraud.
Merchant Brokers specialize in obtaining credit card accounts for online businesses. Brokers charge a setup fee and lease or sell the software and hardware as needed. Expect to pay a discount rate, which is the percentage you pay for each transaction processed, as well as various other charges that differ among services. If obtaining a merchant account through a traditional bank is proving to be a problem, merchant brokers are a good alternative.
Microtransactions or Micropayments
Microtransactions are transactions of tiny amounts — a few cents or a few dollars, typically made in order to download or access graphics, games, and information.
Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount will be billed to his or her telephone bill. To date, this is being used for soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.For a sample, check eCharge Corporation
Facts About Accepting Credit Cards Online
Before you can accept credit cards (either online or offline), you must have a Merchant Account, which is a special arrangement with a banking institution. Small and home businesses often experience difficulties qualifying for a merchant account, and Web based businesses run into even more problems.
The situation is this: Online transactions don’t take place at the point of sale (POS). They are considered to be "non-face-to-face" transactions. Since there is no way of ascertaining the customer’s identification, there is no way to be sure that the customer is the legitimate card holder. Therefore, financial institutions are leery about the high potential for fraud.
Moreover, the major credit card companies offer their card holders the right to contest charges on their statements that may be the result of theft, fraud or error. A contested charge is referred to as a chargeback. When a chargeback occurs, the merchant will end up paying the charge to the issuing bank, in addition to a chargeback fee that can be as high as $30 or more. For example, if you sell a book for $20 through a credit card transaction, and the cardholder later contests the sale, you will end up paying your bank the $20 PLUS a chargeback fee of $10 to $30 dollars.
Consequently, many banks require a reserve fee when issuing merchant status. Typically, face to face sales have a chargeback rate of 1% of all sales. The potential for chargebacks is greater when it is an online sale, so the risk to both bank and merchant increases.
To minimize their risks, most banks have stringent requirements that a business must meet to establish eligibility for merchant status. Factors considered include cash reserves, length of time in business, tax returns, credit history, debt load, refund policies, volume of business, cost of item being sold, and other sources of income.
High Risk Processors are merchant acquirers that specialize in high risk business. They offset their risks by charging you higher transaction fees and higher rates. In the US, the Electronic Card Systems Inc. and Card Service International are two of the better known examples. Merchants living outside the US will be required to find a service that works with their own banking institutions.
Other Associated Expenses
The chargeback expense is the first and foremost concern for a merchant hoping to acquire a merchant account. Chargebacks can result in serious financial loss to the would-be merchant. Also, merchants who encounter too many chargebacks are at risk of losing their merchant account.
However, there are other charges and expenses to factor into the budget as well. Merchants will need to investigate hidden equipment costs, setup fees, line charges, bank transactions fees, holdbacks, and discount rates, etc. These vary considerably among service providers, so compare, compare, compare!
Ecommerce Solutions Compared
There are dozens, perhaps hundreds of businesses and organizations eager to assist you sell your product online. Basically, they fall into four categories: credit card transactions, digital cash transactions, electronic fund transfers and telephone billing systems. No solution is perfect and each comes with its own set of pros and cons. The right choice for you depends upon your specific business requirements.
1. Merchant Internet Accounts.
If you have a merchant status, you will need to consider the following factors:Pros:
Consumers are familiar with credit cards.
With credit card transactions, consumers don’ have to download and install special plugins.
Credit card sales lends itself to impulse buying.
You have the customers' contact information for follow up sales and marketing purposes. (This is a pro for the merchant but a con from the point of view of many customers, who prefer anonymity.)
Cons:
Consumers still have concerns regarding providing financial information online.
Not everyone has a credit card.
Vendors wanting to sell down loadable soft goods will need to find a way to ensure the product is paid for, either before or after the download.
You will have to deal with chargebacks.
If you can’t or won’t get a merchant account through your regular banking institution, you still have the broker option open to you. Brokers can often arrange merchant accounts for businesses who are deemed high risk. Setup fees and discount fees apply.
2. Electronic Cash Transactions
Electronic money is an arrangement whereby the customer pays for the merchandise using electronic money. Examples of this are the well known DigiCash, Cyberbucks, CyberCash, etc. As consumers become more comfortable providing credit card information over the Net, these methods are less utilized.
The Pros
No credit card transactions are required.
No concerns re chargebacks.
Lends itself well to micropayments.
Cons
Many people are unfamiliar with the concept and shy away from unknown entities.
The process is perceived as "a hassle" to some shoppers who prefer to simply give credit card information.
Both merchant and customer must be participating in the same scheme before this method of ecom can be used.
Eliminates the possibility of impulse buying, unless both customer and merchant are already in same scheme.
May not be available globally.
Check out Digicash and Cybercash
3. Electronic Fund Transfers
Funds are transferred electronically from the customers bank account to yours. (This is a highly simplified explanation, and is accurate in the most general sort of way. However, the bottom line is that the customer buys, and at some point the funds are removed from his or her account and ultimately deposited into yours.)
The best known method is the issuing of electronic checks Customers pay for merchandise by writing an electronic check that is transmitted by email, fax or phone. The "check" is a message that contains all of the information that is found on an ordinary check, but it is signed digitally, or indorsed. The digital signature is encoded by encrypting with the customer’s secret key. Upon receipt, the merchant or "payee" may further indorse by encoding with a private key. When the cheque is processed, the resulting message is encoded with the bank’s secret key, thus providing proof of payment.
Pros
No credit card worries
Available to persons without credit cards
Cons
A very new technology that some perceive as being less secure than other forms of ecommerce.
Many customers are not set up to issue electronic cheques; time required to make the arrangements eliminates impulse buying.
May not be available to international consumers.
4. Telephone Billing Systems
A very new approach, telephone transactions allow the customer to purchase an item or service, and the amount is billed to his or her telephone bill. To date, this is being used for the sale of soft items such as downloads, time measured services (i.e. time spent at a Web site) or for making charitable donations online.
eCharge Corporation is a pioneer in the use of this technology.
Pros
Eliminates worries about credit cards (for both consumer and merchant)
Safeguards soft merchandise – no possibility of theft or pirating.
Available to customers without credit cards
Cons
Customer is required to download and install a plugin.
Currently available only for sale of soft merchandise but can do some limited transactions for hard goods.
Not available for all computer platforms.
Currently available for sales using telephone modems, and will not work for transactions over cable modems and ISDN lines.
Coverage is not global.
5. One-Stop Shops
More recently, with the huge interest shown in ecommerce, a multitude of services and products have become available. It's now a possibility to find a service that will broker your Internet Merchant Account, as well as providing web site storage, a template for designing your site, shopping cart software, a form generator, a secure line for safe online ordering, and more. IBM, ICAT and Vantage are examples of businesses offering these all-encompassing services. They are excellent starting points for the entrepreneur who wants to delve into ecommerce.
OR try the excellent SureFire, one of the SiteSell family of products.
If you are looking for a one-stop shop that makes everything fast and easy for you ... from building the site to submitting to search engines to providing an ecommerce solution and a whole lot more, then check out Site Build It, another hugely popular product from the SiteSell family.
Ways of doing e commerce
ECOMMERCE
Online retailers agree that it's better to give than receive, yet they stand to receive more than most. Santa will barely have time to shuck his boots for his slippers before the merchandise misfits begin a return journey to the warehouse to wreak havoc on the season's sales numbers.
"The reality is that returns are nearly always higher for e-commerce sales than for store sales, but that's just the nature of the beast," Sucharita Mulpuru, principal analyst of retail for Forrester Research, told the E-Commerce Times.
Year after year, e-tailers struggle to tame that beast. Efforts vary, and the results are mixed. Still, with online sales matching -- and often exceeding -- brick-and-mortar sales, no one minds if the beast remains a bit unruly.
Know Thy Customer
Many e-tailers tried the track-and-repeat method to slow the return rate, believing that the key to a satisfying purchase was bound to be linked to knowing what the customer bought in the past.
"Personalization is probably one of the most debated topics in e-commerce," Randi Barshack, vice president of marketing at Mercado Software, told the E-Commerce Times. "A lot of retailers tell us that for the most part, their customers don't want to be put in a bucket -- and find suggestions based on past purchases quite annoying."
Too late, retailers came to understand that just because a buyer bought a thingamajig last year for Mr. Whatchamacallit, doesn't necessarily mean that the buyer is into thingamajigs or even likes Mr. Whatchamacallit. This year's list may call for a whizit for Ms. Whodathoughtit, the new boss, instead. In any case, it's a safe bet that no one cherishes the thought of being labeled with Mr. Whatchamacallit's and Ms. Whodathoughtit's tastes for the next 50 purchases made online.
Rather than tracking and responding to individual buying trends, retailers are turning to a new tactic.
"We find more retailers are embracing segmentation or "persona"-lization, where their merchandising strategy reflects types of buyers or buyer segments -- for example, a search for a kayak might indicate a shopper is an outdoor enthusiast, so the retailer has the opportunity to execute appropriate merchandising strategies based on this," says Barshack.
Previews and Reviews Stick
The prevailing consensus among e-tailers is that it may be more important to give the shopper as many specifics as possible on the product than it is to collect specifics on the shopper.
"Usually, more robust information on product detail pages, color matching and live chat are all tools that can help consumers get more information about a product, which -- if effective -- can help to prevent returns," says Mulpuru.
"In terms of conversion rate increases, retailers tell us they are getting between three and five times conversion rate increases from pages featuring detailed navigation refinements versus static product or category pages," adds Barshack.
Giving customers access to other buyers' reviews and comments also helps shoppers choose merchandise they are likely to find satisfying, says Bob Melcher, senior account executive, D&E Communications. Of course, that mostly helps when the reviews are good. Too many bad reviews may indicate a need to change out the merchandise.
"Sell merchandise that is exciting enough to not be returned," Melcher told the E-Commerce Times.
Sift and Sort
"One of the ways online retailers reduce the number of returns is through really granular product selection features," says Barshack. "By giving customers detailed refinement options, it's like asking 'What about this? Have you considered this color?' or 'Did you know this style comes in tall?' This definitely leads to more-informed purchase decisions."
"Another feature that does this is product comparison functionality," adds Barshack. "Again, the more informed the customer is, the more confident he or she will be with the product choice."
Algorithm King?
The buzz has it that Amazon's (Nasdaq: AMZN) fancy new algorithm can't go wrong in pegging the customer. Does that mean the ultimate answer lies in a better algorithm?
"It's not so much algorithms. It's more about creating merchandising business rules," says Barshack.
There's even doubt that Amazon's edge is strictly a matter of algorithm.
"Amazon's isn't the most sophisticated algorithm -- it's just what's known as 'collaborative filtering,'" says Mulpuru. "It's product-to-product associations, but it does a pretty decent job, and it evidently drives lots of sales from their customers."
There are some pretty slick algorithms in play out there, though.
"Netflix has a pretty good algorithm, and the trick is just lots and lots of data that they collect every day from customers," adds Mulpuru.
Even so, not everyone believes the solution addresses the right problem.
"I think you are looking at the wrong end of the equation. Returns are a normal part of customer service, and you should be able to operate an e-business that accounts for them," says Melcher.
If nothing else, an e-tailer can always pass the buck.
"When you have enough clout, make the manufacturer pay for returns, based on your return policy," says Melcher.
Online retailers agree that it's better to give than receive, yet they stand to receive more than most. Santa will barely have time to shuck his boots for his slippers before the merchandise misfits begin a return journey to the warehouse to wreak havoc on the season's sales numbers.
"The reality is that returns are nearly always higher for e-commerce sales than for store sales, but that's just the nature of the beast," Sucharita Mulpuru, principal analyst of retail for Forrester Research, told the E-Commerce Times.
Year after year, e-tailers struggle to tame that beast. Efforts vary, and the results are mixed. Still, with online sales matching -- and often exceeding -- brick-and-mortar sales, no one minds if the beast remains a bit unruly.
Know Thy Customer
Many e-tailers tried the track-and-repeat method to slow the return rate, believing that the key to a satisfying purchase was bound to be linked to knowing what the customer bought in the past.
"Personalization is probably one of the most debated topics in e-commerce," Randi Barshack, vice president of marketing at Mercado Software, told the E-Commerce Times. "A lot of retailers tell us that for the most part, their customers don't want to be put in a bucket -- and find suggestions based on past purchases quite annoying."
Too late, retailers came to understand that just because a buyer bought a thingamajig last year for Mr. Whatchamacallit, doesn't necessarily mean that the buyer is into thingamajigs or even likes Mr. Whatchamacallit. This year's list may call for a whizit for Ms. Whodathoughtit, the new boss, instead. In any case, it's a safe bet that no one cherishes the thought of being labeled with Mr. Whatchamacallit's and Ms. Whodathoughtit's tastes for the next 50 purchases made online.
Rather than tracking and responding to individual buying trends, retailers are turning to a new tactic.
"We find more retailers are embracing segmentation or "persona"-lization, where their merchandising strategy reflects types of buyers or buyer segments -- for example, a search for a kayak might indicate a shopper is an outdoor enthusiast, so the retailer has the opportunity to execute appropriate merchandising strategies based on this," says Barshack.
Previews and Reviews Stick
The prevailing consensus among e-tailers is that it may be more important to give the shopper as many specifics as possible on the product than it is to collect specifics on the shopper.
"Usually, more robust information on product detail pages, color matching and live chat are all tools that can help consumers get more information about a product, which -- if effective -- can help to prevent returns," says Mulpuru.
"In terms of conversion rate increases, retailers tell us they are getting between three and five times conversion rate increases from pages featuring detailed navigation refinements versus static product or category pages," adds Barshack.
Giving customers access to other buyers' reviews and comments also helps shoppers choose merchandise they are likely to find satisfying, says Bob Melcher, senior account executive, D&E Communications. Of course, that mostly helps when the reviews are good. Too many bad reviews may indicate a need to change out the merchandise.
"Sell merchandise that is exciting enough to not be returned," Melcher told the E-Commerce Times.
Sift and Sort
"One of the ways online retailers reduce the number of returns is through really granular product selection features," says Barshack. "By giving customers detailed refinement options, it's like asking 'What about this? Have you considered this color?' or 'Did you know this style comes in tall?' This definitely leads to more-informed purchase decisions."
"Another feature that does this is product comparison functionality," adds Barshack. "Again, the more informed the customer is, the more confident he or she will be with the product choice."
Algorithm King?
The buzz has it that Amazon's (Nasdaq: AMZN) fancy new algorithm can't go wrong in pegging the customer. Does that mean the ultimate answer lies in a better algorithm?
"It's not so much algorithms. It's more about creating merchandising business rules," says Barshack.
There's even doubt that Amazon's edge is strictly a matter of algorithm.
"Amazon's isn't the most sophisticated algorithm -- it's just what's known as 'collaborative filtering,'" says Mulpuru. "It's product-to-product associations, but it does a pretty decent job, and it evidently drives lots of sales from their customers."
There are some pretty slick algorithms in play out there, though.
"Netflix has a pretty good algorithm, and the trick is just lots and lots of data that they collect every day from customers," adds Mulpuru.
Even so, not everyone believes the solution addresses the right problem.
"I think you are looking at the wrong end of the equation. Returns are a normal part of customer service, and you should be able to operate an e-business that accounts for them," says Melcher.
If nothing else, an e-tailer can always pass the buck.
"When you have enough clout, make the manufacturer pay for returns, based on your return policy," says Melcher.
Saturday, December 15, 2007
What is e-Commerce - Advantages and Drawbacks!
Electronic Commerce or e-commerce is the trade of products and services by means of the Internet or other computer networks. E-commerce follows the same basic principles as traditional commerce that is, buyers and sellers come together to swap commodities for money. But rather than conducting business in the traditional way in shopping stores or through mail order catalogs and telephone operators — in e-commerce buyers and sellers transact business over networked computers.
E-commerce offers buyers maximum convenience. They can visit the web sites of multiple vendors round the clock a day to compare prices and make purchases, without having to leave their homes or offices from around the globe. In some cases, consumers can immediately obtain a product or service, such as an electronic book, a music file, or computer software, by downloading it over the Internet.
For sellers, e-commerce offers a way to cut costs and expand their markets. They do not need to build, staff, or maintain a physical store or print and distribute mail order catalogs. Automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded then e-commerce firms have no distribution costs involved. Because the products can be sold sell over the global Internet, sellers have the potential to market their products or services globally and are not limited by the physical location of a store. Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs.
E-commerce however has some drawbacks. Consumers are hesitant to buy some products online. Online furniture businesses, for example, have failed for the most part because customers want to test the comfort of an expensive item such as a sofa before they purchase it. Many people also consider shopping a social experience. For instance, they may enjoy going to a store or a shopping mall with friends or family, an experience that they cannot duplicate online. Consumers also need to be reassured that credit card transactions are secure and that their privacy is respected.
In the existence of these few disadvantages e-commerce has opened new horizons to versatile the modern age. It puts away time, energies, labor and money.
Article Source: http://EzineArticles.com/?expert=William_King
E-commerce offers buyers maximum convenience. They can visit the web sites of multiple vendors round the clock a day to compare prices and make purchases, without having to leave their homes or offices from around the globe. In some cases, consumers can immediately obtain a product or service, such as an electronic book, a music file, or computer software, by downloading it over the Internet.
For sellers, e-commerce offers a way to cut costs and expand their markets. They do not need to build, staff, or maintain a physical store or print and distribute mail order catalogs. Automated order tracking and billing systems cut additional labor costs, and if the product or service can be downloaded then e-commerce firms have no distribution costs involved. Because the products can be sold sell over the global Internet, sellers have the potential to market their products or services globally and are not limited by the physical location of a store. Internet technologies also permit sellers to track the interests and preferences of their customers with the customer’s permission and then use this information to build an ongoing relationship with the customer by customizing products and services to meet the customer’s needs.
E-commerce however has some drawbacks. Consumers are hesitant to buy some products online. Online furniture businesses, for example, have failed for the most part because customers want to test the comfort of an expensive item such as a sofa before they purchase it. Many people also consider shopping a social experience. For instance, they may enjoy going to a store or a shopping mall with friends or family, an experience that they cannot duplicate online. Consumers also need to be reassured that credit card transactions are secure and that their privacy is respected.
In the existence of these few disadvantages e-commerce has opened new horizons to versatile the modern age. It puts away time, energies, labor and money.
Article Source: http://EzineArticles.com/?expert=William_King
Wednesday, December 12, 2007
What is e-commerce
E-commerce (electronic commerce or EC) is the buying and selling of goods and services on the Internet, especially the World Wide Web. In practice, this term and a newer term, e-business, are often used interchangably. For online retail selling, the term e-tailing is sometimes used.
E-commerce can be divided into:
E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts
Electronic Data Interchange (EDI), the business-to-business exchange of data
e-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)
Business-to-business buying and selling
The security of business transactions
E-tailing or The Virtual Storefront and the Virtual MallAs a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers disappeared in the economic shakeout of 2000, Web retailing at sites such as Amazon.com, CDNow.com, and CompudataOnline.com continues to grow.
Market ResearchIn early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)
Electronic Data Interchange (EDI)EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to be replaced by one or more standard XML formats, such as ebXML.
E-Mail, Fax, and Internet TelephonyE-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in.
Business-to-Business Buying and SellingThousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.
The Security of Business TransactionsSecurity includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.
CONTRIBUTORS:
Mark van Ketel and Tim D. Nelson
E-commerce can be divided into:
E-tailing or "virtual storefronts" on Web sites with online catalogs, sometimes gathered into a "virtual mall"
The gathering and use of demographic data through Web contacts
Electronic Data Interchange (EDI), the business-to-business exchange of data
e-mail and fax and their use as media for reaching prospects and established customers (for example, with newsletters)
Business-to-business buying and selling
The security of business transactions
E-tailing or The Virtual Storefront and the Virtual MallAs a place for direct retail shopping, with its 24-hour availability, a global reach, the ability to interact and provide custom information and ordering, and multimedia prospects, the Web is rapidly becoming a multibillion dollar source of revenue for the world's businesses. A number of businesses already report considerable success. As early as the middle of 1997, Dell Computers reported orders of a million dollars a day. By early 1999, projected e-commerce revenues for business were in the billions of dollars and the stocks of companies deemed most adept at e-commerce were skyrocketing. Although many so-called dotcom retailers disappeared in the economic shakeout of 2000, Web retailing at sites such as Amazon.com, CDNow.com, and CompudataOnline.com continues to grow.
Market ResearchIn early 1999, it was widely recognized that because of the interactive nature of the Internet, companies could gather data about prospects and customers in unprecedented amounts -through site registration, questionnaires, and as part of taking orders. The issue of whether data was being collected with the knowledge and permission of market subjects had been raised. (Microsoft referred to its policy of data collection as "profiling" and a proposed standard has been developed that allows Internet users to decide who can have what personal information.)
Electronic Data Interchange (EDI)EDI is the exchange of business data using an understood data format. It predates today's Internet. EDI involves data exchange among parties that know each other well and make arrangements for one-to-one (or point-to-point) connection, usually dial-up. EDI is expected to be replaced by one or more standard XML formats, such as ebXML.
E-Mail, Fax, and Internet TelephonyE-commerce is also conducted through the more limited electronic forms of communication called e-mail, facsimile or fax, and the emerging use of telephone calls over the Internet. Most of this is business-to-business, with some companies attempting to use e-mail and fax for unsolicited ads (usually viewed as online junk mail or spam) to consumers and other business prospects. An increasing number of business Web sites offer e-mail newsletters for subscribers. A new trend is opt-in e-mail in which Web users voluntarily sign up to receive e-mail, usually sponsored or containing ads, about product categories or other subjects they are interested in.
Business-to-Business Buying and SellingThousands of companies that sell products to other companies have discovered that the Web provides not only a 24-hour-a-day showcase for their products but a quick way to reach the right people in a company for more information.
The Security of Business TransactionsSecurity includes authenticating business transactors, controlling access to resources such as Web pages for registered or selected users, encrypting communications, and, in general, ensuring the privacy and effectiveness of transactions. Among the most widely-used security technologies is the Secure Sockets Layer (SSL), which is built into both of the leading Web browsers.
CONTRIBUTORS:
Mark van Ketel and Tim D. Nelson
E-commerce
A short glimpse to ecommerce
Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown dramatically since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.A small percentage of electronic commerce is conducted entirely electronically for "virtual" items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is known as e-tail. E-commerce or electronic commerce is generally considered to be the sales aspect of e-business.HistoryEarly developmentThe meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. From the 1990s onwards, e-commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.Perhaps the earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.Web developmentWhen the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites.In the dot com era, e-commerce came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web, usually with secure connections, with e-shopping carts and with electronic payment services such as credit card payment authorizations.Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites.$259 billion of online sales including travel are expected in 2007 in USA, an 18% increase from the previous year, as forecasted by the "State of Retailing Online 2007" report from the National Retail Federation (NRF) and Shop.org.[1]Timeline1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio stations "Radio HK" and Netradio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.1999: business.com was sold for US $7.5 million (purchased in 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.2000: The dot-com bust.2003: Amazon.com: first-ever full-year profit.FormsContemporary e-commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of e-commerce.Success factorsThis article does not cite any references or sources. (October 2007)Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.In many cases, an e-commerce company survives not only based on its product, but through a competent management team, post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. The factors can be divided between technical or organization aspects and direct service to the consumer.Technical and organizational aspectsSufficient work done in market research and analysis. Like traditional models, e-commerce implicates good business planning and the fundamental laws of supply and demand.A good management team armed with information technology strategy. A company's IT strategy can involve the business re-design process.Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants process credit card transactions on site through arrangements made with commercial banks or credit cards companies.Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers can react against a big brother experience.Constructing a commercially sound business model.Engineering an electronic value chain focused on a "limited" number of core competencies. Electronic stores have succeeded as either specialist or generalist in aim.Operating on or near the cutting edge of technology and staying there as technology changes.Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.Providing an attractive website. The tasteful use of color, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.Streamlining business processes, possibly through re-engineering and information technologies.Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisers and selectors.Other standard necessities include honesty about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. (Of course, customers can, and occasionally do, research a brick-and-mortar store online before visiting it, so this distinction does not hold water in every case.)Customer experienceA successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Many factors go into making this possible. Such factors include:Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help.Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale.Providing a sense of community. Chat rooms, discussion boards, soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect.Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all product information is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.Helping customers do their job of consuming. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.TaxationMain article: Internet taxationFrom the inception of the Internet until the late 1990s, the Internet was free of regulation by government in the United States at all levels, and also free of any specially targeted tax levies, duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. states and municipalities began to see Internet services as a potential source of tax revenue.The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet, grandfathering existing taxes in ten states.[2] In the United States alone, some 30,000 taxing jurisdictions could otherwise have laid claim to taxes on a piece of the Internet.[3] The law, however, did not affect sales taxes applied to online purchases. These continue to be taxed at varying rates depending on the jurisdiction, in the same way that phone and mail orders are taxed.The enactment of this legislation has coincided with the beginning of a period of spectacular Internet growth. Its proponents argue that the benefits of knowledge, trade, and communications that the Internet is bringing to more people in more ways than ever before are worth the tax revenue losses, if any, and that the economic and productivity growth attributable to the Internet may well have contributed more revenues to various governments than would otherwise have been received. Opponents, on the other hand, have argued that the Internet would continue to prosper even if taxed, and that the current federal ban on Internet-specific levies denies government at all levels a much-needed source of revenue.
This this article is taken from the wikipedia.
Electronic commerce, commonly known as e-commerce or eCommerce, consists of the buying and selling of products or services over electronic systems such as the Internet and other computer networks. The amount of trade conducted electronically has grown dramatically since the spread of the Internet. A wide variety of commerce is conducted in this way, spurring and drawing on innovations in electronic funds transfer, supply chain management, Internet marketing, online transaction processing, electronic data interchange (EDI), automated inventory management systems, and automated data collection systems. Modern electronic commerce typically uses the World Wide Web at least at some point in the transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail as well.A small percentage of electronic commerce is conducted entirely electronically for "virtual" items such as access to premium content on a website, but most electronic commerce involves the transportation of physical items in some way. Online retailers are sometimes known as e-tailers and online retail is known as e-tail. E-commerce or electronic commerce is generally considered to be the sales aspect of e-business.HistoryEarly developmentThe meaning of the term "electronic commerce" has changed over the last 30 years. Originally, "electronic commerce" meant the facilitation of commercial transactions electronically, using technology such as Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s, allowing businesses to send commercial documents like purchase orders or invoices electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and telephone banking in the 1980s were also forms of e-commerce. From the 1990s onwards, e-commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.Perhaps the earliest example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. The first online information marketplace, including online consulting, was likely the American Information Exchange, another pre-Internet online system introduced in 1991.Web developmentWhen the Web first became well-known among the general public in 1994, many journalists and pundits forecast that e-commerce would soon become a major economic sector. However, it took about four years for security protocols (like HTTPS) to become sufficiently developed and widely deployed. Subsequently, between 1998 and 2000, a substantial number of businesses in the United States and Western Europe developed rudimentary web sites.In the dot com era, e-commerce came to include activities more precisely termed "Web commerce" -- the purchase of goods and services over the World Wide Web, usually with secure connections, with e-shopping carts and with electronic payment services such as credit card payment authorizations.Although a large number of "pure e-commerce" companies disappeared during the dot-com collapse in 2000 and 2001, many "brick-and-mortar" retailers recognized that such companies had identified valuable niche markets and began to add e-commerce capabilities to their Web sites. For example, after the collapse of online grocer Webvan, two traditional supermarket chains, Albertsons and Safeway, both started e-commerce subsidiaries through which consumers could order groceries online.The emergence of e-commerce also significantly lowered barriers to entry in the selling of many types of goods; many small home-based proprietors are able to use the internet to sell goods. Often, small sellers use online auction sites such as eBay, or sell via large corporate websites like Amazon.com, in order to take advantage of the exposure and setup convenience of such sites.$259 billion of online sales including travel are expected in 2007 in USA, an 18% increase from the previous year, as forecasted by the "State of Retailing Online 2007" report from the National Retail Federation (NRF) and Shop.org.[1]Timeline1990: Tim Berners-Lee wrote "The WorldWideWeb browser" using a NeXT computer.1994: Netscape released the Navigator browser in October under the code name Mozilla. Pizza Hut offered pizza ordering on its Web page. The first online bank opened. Attempts to offer flower delivery and magazine subscriptions online. "Adult" materials were also commercially available, as were cars and bikes. Netscape 1.0 in late 1994 introduced SSL encryption that made transactions secure.1995: Jeff Bezos launched Amazon.com and the first commercial 24 hr. internet only radio stations "Radio HK" and Netradio started broadcasting. Dell and Cisco began to aggressively use Internet for commercial transactions. eBay was founded by computer programmer Pierre Omidyar as AuctionWeb.1998: Electronic postal stamps can be purchased and downloaded for printing from the Web.1999: business.com was sold for US $7.5 million (purchased in 1997 for US $150,000) The peer-to-peer filesharing software "Napster" was launched.2000: The dot-com bust.2003: Amazon.com: first-ever full-year profit.FormsContemporary e-commerce involves everything from ordering "digital" content for immediate online consumption, to ordering conventional goods and services, to "meta" services to facilitate other types of e-commerce.Success factorsThis article does not cite any references or sources. (October 2007)Please help improve this article by adding citations to reliable sources. Unverifiable material may be challenged and removed.In many cases, an e-commerce company survives not only based on its product, but through a competent management team, post-sales services, well-organized business structure, network infrastructure and a secured, well-designed website. The factors can be divided between technical or organization aspects and direct service to the consumer.Technical and organizational aspectsSufficient work done in market research and analysis. Like traditional models, e-commerce implicates good business planning and the fundamental laws of supply and demand.A good management team armed with information technology strategy. A company's IT strategy can involve the business re-design process.Providing an easy and secured way for customers to effect transactions. Credit cards are the most popular means of sending payments on the internet, accounting for 90% of online purchases. In the past, card numbers were transferred securely between the customer and merchant through independent payment gateways. Such independent payment gateways are still used by most small and home businesses. Most merchants process credit card transactions on site through arrangements made with commercial banks or credit cards companies.Providing reliability and security. Parallel servers, hardware redundancy, fail-safe technology, information encryption, and firewalls can enhance this requirement.Providing a 360-degree view of the customer relationship, defined as ensuring that all employees, suppliers, and partners have a complete view, and the same view, of the customer. However, customers can react against a big brother experience.Constructing a commercially sound business model.Engineering an electronic value chain focused on a "limited" number of core competencies. Electronic stores have succeeded as either specialist or generalist in aim.Operating on or near the cutting edge of technology and staying there as technology changes.Setting up an organization of sufficient alertness and agility to respond quickly to any changes in the economic, social and physical environment.Providing an attractive website. The tasteful use of color, graphics, animation, photographs, fonts, and white-space percentage may aid success in this respect.Streamlining business processes, possibly through re-engineering and information technologies.Providing complete understanding of the products or services offered, which not only includes complete product information, but also sound advisers and selectors.Other standard necessities include honesty about its product and its availability, shipping reliably, and handling complaints promptly and effectively. A unique property of the Internet environment is that individual customers have access to far more information about the seller than they would find in a brick-and-mortar situation. (Of course, customers can, and occasionally do, research a brick-and-mortar store online before visiting it, so this distinction does not hold water in every case.)Customer experienceA successful e-commerce organization must also provide an enjoyable and rewarding experience to its customers. Many factors go into making this possible. Such factors include:Providing value to customers. Vendors can achieve this by offering a product or product-line that attracts potential customers at a competitive price, as in non-electronic commerce.Providing service and performance. Offering a responsive, user-friendly purchasing experience, just like a flesh-and-blood retailer, may go some way to achieving these goals.Providing an incentive for customers to buy and to return. Sales promotions to this end can involve coupons, special offers, and discounts. Cross-linked websites and advertising affiliate programs can also help.Providing personal attention. Personalized web sites, purchase suggestions, and personalized special offers may go some of the way to substituting for the face-to-face human interaction found at a traditional point of sale.Providing a sense of community. Chat rooms, discussion boards, soliciting customer input and loyalty programs (sometimes called affinity programs) can help in this respect.Owning the customer's total experience. E-tailers foster this by treating any contacts with a customer as part of a total experience, an experience that becomes synonymous with the brand.Letting customers help themselves. Provision of a self-serve site, easy to use without assistance, can help in this respect. This implies that all product information is available, cross-sell information, advise for product alternatives, and supplies & accessory selectors.Helping customers do their job of consuming. E-tailers and online shopping directories can provide such help through ample comparative information and good search facilities. Provision of component information and safety-and-health comments may assist e-tailers to define the customers' job.TaxationMain article: Internet taxationFrom the inception of the Internet until the late 1990s, the Internet was free of regulation by government in the United States at all levels, and also free of any specially targeted tax levies, duties, imposts, or license fees. By 1996, however, that began to change, as several U.S. states and municipalities began to see Internet services as a potential source of tax revenue.The 1998 Internet Tax Freedom Act halted the expansion of direct taxation of the Internet, grandfathering existing taxes in ten states.[2] In the United States alone, some 30,000 taxing jurisdictions could otherwise have laid claim to taxes on a piece of the Internet.[3] The law, however, did not affect sales taxes applied to online purchases. These continue to be taxed at varying rates depending on the jurisdiction, in the same way that phone and mail orders are taxed.The enactment of this legislation has coincided with the beginning of a period of spectacular Internet growth. Its proponents argue that the benefits of knowledge, trade, and communications that the Internet is bringing to more people in more ways than ever before are worth the tax revenue losses, if any, and that the economic and productivity growth attributable to the Internet may well have contributed more revenues to various governments than would otherwise have been received. Opponents, on the other hand, have argued that the Internet would continue to prosper even if taxed, and that the current federal ban on Internet-specific levies denies government at all levels a much-needed source of revenue.
This this article is taken from the wikipedia.
Subscribe to:
Posts (Atom)