Electronic Commerce/Nino Joseph Mihilli

E-commerce (electronic commerce or EC) is the buying and selling of goods and services, or the

transmitting of funds or data, over an electronic network, primarily the internet. These business

transactions occur either as business-to-business, business-to-consumer, consumer-to-consumer

or consumer-to-business. The terms e-commerce and e-business are often used interchangeably.

The term e-tail is also sometimes used in reference to transactional processes for online

shopping.

Types of E-Commerce

There are several types of electronic commerce. The most common is business to consumer, in

which a business sells products or services directly to consumers over the Internet. An example

of a business to consumer e-commerce transaction would be an individual purchasing a pair of

sneakers through Nike's website.

Another type of electronic commerce is business to business, where companies sell products or

services to other companies over the Internet. An example would be the company GoDaddy,

which sells domain names, websites, and hosting services to other businesses.

Consumer to business electronic commerce involves consumers selling products or services to

businesses. You've taken part in this form of e-commerce if you've ever completed a paid online

survey where you've given your opinion about a product.

Finally, there is consumer to consumer e-commerce, which is where consumers sell products to

other consumers. An example would be one consumer selling something that he or she no longer

needs or wants to another consumer via a site like eBay or Amazon.

E-commerce applications

E-commerce is conducted using a variety of applications, such as email, online catalogs and

shopping carts, EDI, File Transfer Protocol, and web services. This includes business-to-business

activities and outreach such as using email for unsolicited ads (usually viewed as spam) to

consumers and other business prospects, as well as to send out e-newsletters to subscribers. More

companies now try to entice consumers directly online, using tools such as digital coupons,

social media marketing and targeted advertisements.

The benefits of e-commerce include its around-the-clock availability, the speed of access, the

wide availability of goods and services for the consumer, easy accessibility, and international

reach. Its perceived downsides include sometimes-limited customer service, consumers not being

able to see or touch a product prior to purchase, and the necessitated wait time for product

shipping.

The e-commerce market continues to grow: Online sales accounted for more than a third of total

U.S. retail sales growth in 2015, according to data from the U.S. Commerce Department. Web

sales totaled $341.7 billion in 2015, a 14.6% increase over 2014. E-commerce conducted using

mobile devices and social media is on the rise as well: Internet Retailer reported that mobile

accounted for 30% of all U.S. e-commerce activities in 2015. And according to Invesp, 5% of all

online spending was via social commerce in 2015, with Facebook, Pinterest and Twitter

providing the most referrals.

The rise of e-commerce forces IT personnel to move beyond infrastructure design and

maintenance and consider numerous customer-facing aspects such as consumer data privacy and

security. When developing IT systems and applications to accommodate e-commerce activities,

data governance related regulatory compliance mandates, personally identifiable information

privacy rules and information protection protocols must be considered.

Government regulations for e-commerce

In the United States, the Federal Trade Commission (FTC) and the Payment Card Industry (PCI)

Security Standards Council are among the primary agencies that regulate e-commerce activities.

The FTC monitors activities such as online advertising, content marketing and customer privacy,

while the PCI Council develops standards and rules including PCI-DSS compliance that outlines

procedures for proper handling and storage of consumers' financial data.

To ensure the security, privacy and effectiveness of e-commerce, businesses should authenticate

business transactions, control access to resources such as webpages for registered or selected

users, encrypt communications and implement security technologies such as the Secure Sockets

Layer and two factor authentication.

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