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INTRODUCTION

Electronic commerce, commonly known as (electronic marketing) 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 extraordinarily with widespread Internet usage. The use 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), 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 large 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 sometimes known as e-tail. Almost all big retailers have electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-business or B2B. B2B can be open to all interested parties (e.g. commodity exchange) or limited to specific, pre-qualified participants

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(private electronic market). Electronic commerce that is conducted between businesses and consumers, on the other hand, is referred to as business-to-consumer or B2C. This is the type of electronic commerce conducted by companies such as Amazon.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists of the exchange of data to facilitate the financing and payment aspects of the business transactions

History

The meaning of 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 electronic commerce. Another form of e-commerce was the airline reservation system typified by Sabre in the USA and Travicom in the UK.

Online shopping, an important component of electronic commerce was invented by Michael Aldrich in the UK in 1979. The world's first recorded B2B was Thomson Holidays in 1981 The first recorded B2C was Gates head SIS/Tesco in 1984 The world's first recorded online shopper was Mrs. Jane Snowball of Gates head, England During the 1980s, online shopping was also used extensively in the UK by auto manufacturers such as Ford, Peugeot-Talbot, General Motors and Nissan. All these organizations and others used the Aldrich systems.

From the 1990s onwards, electronic commerce would additionally include enterprise resource planning systems (ERP), data mining and data warehousing.

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An early example of many-to-many electronic commerce in physical goods was the Boston Computer Exchange, a marketplace for used computers launched in 1982. An early online information marketplace, including online consulting, was the American Information Exchange, another pre Internet online system introduced in 1991.

In 1990 Tim Berners-Lee invented the World Wide Web and transformed an academic telecommunication network into a worldwide everyman everyday communication system called internet/www. Commercial enterprise on the Internet was strictly prohibited until 1991. Although the Internet became popular worldwide around 1994 when the first internet online shopping started, it took about five years to introduce security protocols and DSL allowing continual connection to the Internet. By the end of 2000, many European and American business companies offered their services through the World Wide Web. Since then people began to associate a word "ecommerce" with the ability of purchasing various goods through the Internet using secure protocols and electronic payment services

The Six Principles of E-commerce

1. Sell Everywhere – Be Seen and Be Shopped Customer expectations for how and when they buy products have changed substantially over the past few years. Multi-channel selling was once limited to managing direct sales, a call center, a website, and possibly a partner channel. With ecommerce 2.0, this has been expanded and refined to include various online channels.

2. The Long Tail – Target Niche Markets eTailers who can connect with niche markets and provide a better online experience are capitalizing on new-found revenue. In the past, the obvious strategy was to find the bulk of the market and then mass market to them. With so much competition, many online merchants have adapted by discovering new methods and tools that target specific niche markets. These niche markets are not flooded by the big brands and respond well to content and online experiences directed specifically at them.

3. Customers Rule – Build a Community of Raving Fans Buyers were once along for the ride in the ecommerce process. Now they are in the driver’s seat. The content buyers create through forums such as product reviews,

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blogs, and social networks influences other buyers as much or more than any promotion eTailers create.

4. Personalized Shopping – Make It Fun to Shop and Easy to Buy Shopping has long been considered a recreational activity by many. Shopping online is no exception. In fact, with the sophistication and speed of online shopping tools, consumers are spending more and more on eTailer sites. The best of these shopping tools takes into account that buyers want to be entertained and pleased. Buyers also—just as in the brick-and-mortar world—do not like long checkout processes.

5. Mash-ups – Integrate and Collaborate Integration is nothing new, but what is new is how dynamically these integrations need to be initiated, modified, and used. The ecommerce 2.0 environment is built upon many interrelated systems and processes that require information to be exchanged dynamically.

6. Data is King – Collect a Wealth of Opportunities Gone are the days of looking at purely operational reports. Seeing how many listings you have in a marketplace is fine, but it does not tell you how you compare to other eTailers, what your performance is like over time, or what other channels may be more profitable. Some common applications related to electronic commerce are the following:

Email

Enterprise content management

Instant messaging

Newsgroups

Online shopping and order tracking

Online banking

Online office suites

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Domestic and international payment systems

Shopping cart software

Teleconferencing

Electronic tickets

E-MAIL

Electronic mail (also known as email or e-mail) is one of the most commonly used services on the Internet, allowing people to send messages to one or more recipients.

The operating principle behind email is relatively simple, which has quickly made it the most popular service used on the Internet.

As with a traditional postal service, for your message to reach your recipient, all you need to know is their address. Its two main advantages over "paper mail" are the speed at which the email is sent (practically instantaneous) and the lower cost (included with the cost of an Internet connection).

Email addresses (both for senders and recipients) are two strings separated by the character "@" (the "at sign"):

user@domain

The right-hand part describes the domain name involved, and the left-hand part refers to the user who belongs to that domain. One or more mail servers Domain Name System correspond to each domain.

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An email address can be up to 255 characters long and can include the following characters:

Lowercase letters from a to z;

Digits

The characters ".","_" and "-" (full stop, underscore, and hyphen)

E BUSINESS

Electronic Business, commonly referred to as "ebusiness" or "e-Business", may be defined as the utilization of information and communication technologies (ICT) in support of all the activities of business. Commerce constitutes the exchange of products and services between businesses, groups and individuals and can be seen as one of the essential activities of any business. Electronic commerce focuses on the use of ICT to enable the external activities and relationships of the business with individuals, groups Business-to-consumer (B2C, sometimes also called Business-to-Customer) describes activities of businesses serving end consumers with products and/or services.

An example of a B2C transaction would be a person buying a pair of shoes from a retailer. The transactions that led to the shoes being available for purchase, that is the purchase of the leather, laces, rubber, etc. as well as the sale of the shoe from the shoemaker to the retailer would be considered (B2B) transactions.

Electronic business methods enable companies to link their internal and external data processing systems more efficiently and flexibly, to work more closely with suppliers and partners, and to better satisfy the needs and expectations of their customers.

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In practice, e-business is more than just e-commerce. While e-business refers to more strategic focus with an emphasis on the functions that occur using electronic capabilities, e-commerce is a subset of an overall e-business strategy. E-commerce seeks to add revenue streams using the World Wide Web or the Internet to build and enhance relationships with clients and partners and to improve efficiency using the Empty Vessel strategy. Often, e-commerce involves the application of knowledge management systems.

E-business involves business processes spanning the entire value chain: electronic purchasing and supply chain management, processing orders electronically, handling customer service, and cooperating with business partners. Special technical standards for e-business facilitate the exchange of data between companies. E-business software solutions allow the integration of intra and inter firm business processes. E-business can be

conducted using the Web, the Internet, intranets, extranets, or some

combination of these.

MODELS

Roughly dividing the world into providers/producers and consumers/clients

one can classify e-businesses into the following categories:

BUSINESS-TO-BUSINESS (B2B)

BUSINESS-TO-CONSUMER (B2C)

BUSINESS-TO-EMPLOYEE (B2E)

BUSINESS-TO-GOVERNMENT (B2G)

GOVERNMENT-TO-BUSINESS (G2B)

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GOVERNMENT-TO-GOVERNMENT (G2G)

GOVERNMENT-TO-CITIZEN (G2C)

CONSUMER-TO-CONSUMER (C2C)

CONSUMER-TO-BUSINESS (C2B)

PEER-TO-PEER (P2P)

TYPES

Business-to-business

Business-to-business (B2B) describes commerce transactions between businesses, such as between a manufacturer and a wholesaler, or between a wholesaler and a retailer. Contrasting terms are business-to-consumer (B2C) and business-to-government (B2G).

The volume of B2B transactions is much higher than the volume of B2C transactions. The primary reason for this is that in a typical supply chain there will be many B2B transactions involving subcomponent or raw materials, and only one B2C transaction, specifically sale of the finished product to the end customer. For example, an automobile manufacturer makes several B2B transactions such as buying tires, glass for windshields, and rubber hoses for its vehicles. The final transaction, a finished vehicle sold to the consumer, is a single (B2C) transaction.

The term "business-to-business" was originally coined to describe the electronic communications between businesses or enterprises in order to

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distinguish it from the communications between businesses and consumers (B2C). It eventually came to be used in marketing as well, initially describing only industrial or capital goods marketing. Today it is widely used to describe all products and services used by enterprises. Many professional institutions and the trade publications focus much more on B2C than B2B. This is a strange development as most sales and marketing people work in B2B.

Business-to-consumer

Business-to-consumer (B2C, sometimes also called Business-to-Customer) describes activities of businesses serving end consumers with products and/or services.

An example of a B2C transaction would be a person buying a pair of shoes from a retailer. The transactions that led to the shoes being available for purchase, that is the purchase of the leather, laces, rubber, etc. as well as the sale of the shoe from the shoemaker to the retailer would be considered (B2B) transactions

Consumer-to-consumer

Consumer-to-consumer (C2C) (or citizen-to-citizen) electronic commerce involves the electronically-facilitated transactions between consumers through some third party. A common example is the online auction, in which a consumer posts an item for sale and other consumers bid to purchase it; the third party generally charges a flat fee or commission. The sites are only intermediaries, just there to match consumers. They do not have to check quality of the products being offered.

Examples of C2C

eBay

Craigslist

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Amazon.com

This type of e-commerce is expected to increase in the future because it cuts out the costs of using another company. An example on cited in Management Information Systems, is for someone having a garage sale to promote their sale via advertising transmitted to the GPS units of cars in the area. This would potentially reach a larger audience than just posting signs around the neighborhood.

Consumer 2 business

Consumer-to-business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).

This kind of economic relationship is qualified as an inverted business type. The advent of the C2B scheme is due to major changes:

Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.

Decreased cost of technology : Individuals now have access to technologies that were once only available to large companies ( digital printing and acquisition technology, high performance computer, powerful software)

Business 2 government

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Business-to-government (B2G) is a derivative of B2B marketing and often referred to as a market definition of "public sector marketing" which encompasses marketing products and services to government agencies through integrated marketing communications techniques such as strategic public relations, branding, marcom, advertising, and web-based communications.

B2G networks allow businesses to bid on government RFPs in a reverse auction fashion. Public sector organizations (PSO's) post tenders in the form of RFP's, RFI's, RFQ's etc. and suppliers respond to them.

Business 2 employee

Business-to-employee (B2E) electronic commerce uses an intrabusiness network which allows companies to provide products and/or services to their employees. Typically, companies use B2E networks to automate employee-related corporate processes.

Examples of B2E applications include:

Online insurance policy management

Corporate announcement dissemination

Online supply requests

Special employee offers

Employee benefits reporting

401(k) Management

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GOVERNMENT-TO-BUSINESS (G2B)

Government-to-Business (abbreviated G2B) is the online non-commercial interaction between local and central government and the commercial business sector, rather than private individuals (G2C). For example http://www.dti.gov.uk is a government web site where businesses can get information and advice on e-business 'best practice'. http://g2b.perm.ru is another example.

FEATURES OF G2B

Widest coverage of industries on the web; all industrial fields covered thoroughly and classified by UNSPSC.Personalized service of matching bid recommendation as well as daily email alert of bid opportunities precisely tailored to your business interest. Instant analysis of agencies, contractors, product/services in various industrial fields. Intelligent bid tracking service.

Latest bid notices, RFQ, RFPs, contracting opportunities from federal, state, local agencies plus int'l governments. Updated exhaustively from synopsis, solicitation, bid modification on a real-time basis.

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BENEFITS

Save time with customized search options and obtain downloadable bid documents instantly.Accelerate your response to the bid notices by using bid alert service that sends you the bids that match your industrial category, business keywords, target areas, etc. Broaden your business opportunities by reviewing the federal bid histories - award, FebBizOpps history.

Have unlimited access to bid notices, RFQ, RFP, and contracting opportunities from local, state, federal governments of U.S. and Canada. Also, from other over 170 countries in worldwide.

Have unlimited access to bid notices, RFQ, RFP, and contracting opportunities from local, state, federal governments of U.S. and Canada. Also from other over 170 countries in worldwide.

Government-to-government

Government-to-Government (abbreviated G2G) is the online non-commercial interaction between Government organizations, departments, and authorities and other Government organizations, departments, and authorities. Its use is common in the UK, along with G2C, the online non-commercial interaction of local and central Government and private individuals, and G2B the online non-commercial interaction of local and central Government and the commercial business sector.

Government-to-citizen

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Government-to-Citizen (abbreviated G2C) is the online non-commercial interaction between local and central Government and private individuals, rather than the commercial business sector G2B. For example Government sectors become visibly open to the public domain via a Web Portal. Thus making public services and information accessible to all. One such web portal is Government Gateway

Consumer-to-business

Consumer-to-business (C2B) is an electronic commerce business model in which consumers (individuals) offer products and services to companies and the companies pay them. This business model is a complete reversal of traditional business model where companies offer goods and services to consumers (business-to-consumer = B2C).

This kind of economic relationship is qualified as an inverted business type. The advent of the C2B scheme is due to major changes:

Connecting a large group of people to a bidirectional network has made this sort of commercial relationship possible. The large traditional media outlets are one direction relationship whereas the internet is bidirectional one.

Decreased cost of technology : Individuals now have access to technologies that were once only available to large companies ( digital printing and acquisition technology, high performance computer, powerful software)

E MARKETING

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This chapter introduces you to the world of e-marketing; its background and its benefits. It explores the current e-marketing situation, e-marketing definitions as well as examples of good and bad e-marketing.

Chances are, your organization is already engaged in E-marketing, so in this chapter, and throughout the book, we give you a planning framework and checklists to evaluate and improve your current E-marketing practices or plan new initiatives.

The chapter is structured using a simple aide-mémoire, called SOSTAC®. SOSTAC® is used by thousands of professionals to produce all kinds of plans (marketing plans, corporate plans, advertising plans and e-marketing plans).

In later chapters and in particular, chapter 10 we provide a step-by-step guide to creating an e-marketing plan. In this chapter, we’ll use SOSTAC® to provide a structure for an initial review.

Even after several years of the commercial expansion of the Internetand the development of the World Wide Web (WWW), the adoption ofInternet technologies by global firms and the promises of reaching aglobal market appear to be fraught with a variety of structural andfunctional encumbrances (Guillen, 2002; Samiee, 1998). Some of thebarriers stem from the relatively slow pace of development of Internetinfrastructure around the world, while others are due to the inabilityof firms to fully exploit the global potential of the WWW. Thepotential of electronic technologies to foster radical changes tomarketing exchanges and organization depends to a large extent on theinstitutional context of specific firms and countries. Differences intechnological advancement, culture, politics, law, and consumerbehavior would largely shape the development of electronic markets(Guillen, 2002; Zugelder, Flaherty & Johnson 2000). While suchmarkets offer more complete information as compared to traditionalmarkets, buyer-seller exchanges would, nevertheless, have to adapt tothe unique constellation of institutional forces in different countriesand industries.

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Online Banking

Online banking (or Internet banking) allows customers to conduct financial transactions on a secure website operated by their retail or virtual bank, credit union or building society.

Since the internet has become a popular place to buy and sell goods, online banking services have made their way into most homes. Easier to pay bills, manage money, and transfer money to other accounts, internet banking is a convenient way to handle money. Many employers now have direct deposit, which makes it easier to put money into one's account. No more trips to the bank every Friday. The money is in the account the night before and is available for use on Friday morning. Most banks now offer some type of banking services on the net. While not all banks have all of the options that people will need, many banks now offer more services than they have before.

Some banks will allow people to send electronic checks to credit card companies and student loan organizations instead of writing out a check each month. This saves time and paper. Some banks will allow a person to see their account at any time during the day and allow them to make changes that they see fit.

They can transfer money into a savings account, open other accounts, or buy items online. Since many people shop online, they will use their debt card to pay for the items that they purchase. This can make money management even easier. Online banks that do not have traditional branches are also beginning to open on the internet. Without a location to visit, people conduct all of their banking online.

In the future, this may become the trend. Online banking that people will do exclusively on the internet is not out of reach. These days, people can look into investing, opening up other accounts, and taking out loans without leaving their computer. There are many advantages to this form of banking. Money is transferred faster, people can check their balances within minutes, and people will no longer miss bill payments.

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There are also disadvantages to operating solely on the internet. Sometimes it is necessary to talk with a banking representative in case there is a problem with the account. Being able to talk to a person face to face will help the situation. Online banking services would require that people speak through email or over the phone. Another problem is that errors concerning the amount of money that a person has in their account. Without a paper trail, the situation could be dire.

FEATURES

Online banking solutions have many features and capabilities in common, but traditionally also have some that are application specific.

The common features fall broadly into several categories

Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer... and applications... apply for a loan, new account, etc.)

Electronic bill presentment and payment - EBPP

Funds transfer between a customer's own checking and savings accounts, or to another customer's account

Investment purchase or sale

Loan applications and transactions, such as repayments

Non-transactional (e.g., online statements, check links, cobrowsing, chat)

Bank statements

Financial Institution Administration -

Support of multiple users having varying levels of authority

Transaction approval process

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Wire transfer

Features commonly unique to Internet banking include

Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

SECURITY

It is important to keep your hard-earned money safe. Whether you are concerned about online banking security or the traditional banking security threats, you'll find help here. We'll cover tips for safe online banking, ways to avoid identity theft, and more.

Safest BanksSome people only want to work with the safest banks. Even with FDIC insurance, bank failures can be a hassle. By sticking to the safest banks, you reduce the likelihood of any headaches, delays, or name changes on your statements. How do you figure out which banks are the safest banks?

Deposits at ATMs - RisksDeposits at ATMs can be convenient. However, you may run into trouble or have doubts about deposit ATMs. Are they safe? Do they have special rules? Learn about a few pitfalls of deposit ATMs so you can avoid unpleasant surprises.

Bad BanksBad banks are used to take risky assets from otherwise good banks. By using bad banks, banks can improve their financial strength and stay in business. Let's take a closer look at how bad banks work and some of their problems.

Your FDIC CoverageFDIC coverage can be complex. It is important that you keep all of your money insured in case your bank goes under. You can use a variety of

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tricks and services to stay within FDIC coverage limits. Let’s review what you can do, and how to make sure you’re properly using FDIC coverage.

Failed Institution ProtectionSometimes financial institutions fail. If your money - a savings account, 401k, or investment account - is with a failed firm, you might wonder if it’s safe. Will you lose everything? For most people, the answer is no. Let’s look at the safeguards in place to protect your money when a financial institution fails.

Bank FailuresBanks are the safest place to keep your cash. Nevertheless, bank failures happen from time to time. This page discusses bank failures in general and what you should expect if your bank goes under.

Bank RunsBank runs occur when customers flock to the bank to grab their cash. They are caused by a fear that the bank will fail before customers can get their assets out. This page covers the basics of bank runs and why they happen.

PIN - Personal Identification Numbers - PIN Number TipsPersonal identification numbers (PINs) are security features. Often referred to as PIN numbers (yes, it's redundant), PINs are important to keeping your money and your information safe. Picking a good PIN number and remembering it is easy if you use a few tricks.

FIVE WAYS TO BANK SAFETY AT THE ATMATM convenience is essential for hectic shoppers to get quick cash this holiday season. While Americans make more than 11 billion ATM transactions annually, December is always the busiest month for ATM usage. When ATM transactions increase, so do fraud, ID theft and crime at the ATM.

Skimming Scams Don’t fall prey to ATM skimming scams. Scammers can quickly read a card’s information and use it to access your account fraudulently. With a small device, your card’s information gets stored so that criminals can

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easily get to it later. This page covers how the scams work and how you can avoid getting stung.

Fishing Scamswhat’s a fishing scam? When you’re online and somebody asks you to “update your account information”, you probably don’t even think twice. It’s a scam 99% of the time. But what if you get a phone call?

Swishing ScamsThey are similar to phishing scams. You get a message from a bank or service provider asking you to do something. However, the Swishing is really a message from a scam artist. While most people are familiar with email phishing scams, they're less skeptical when receiving Swishing messages.

Government Mandated Free Credit ReportU.S. laws require that consumers be entitled to a free credit report each year. Don't be tricked into signing up for a subscription service -- or worse, a phishing scam. Keep an eye on what's happening with your credit.

7 Steps to ATM SecurityWhile ATM's have added some convenience to our lives, a few risks have also popped up. ATM's give criminals another opportunity to get at your money, and you should take steps to reduce your risk. Most of us can stay out of trouble with simple common sense, but you should periodically review some proven tactics. Follow these seven steps, and you'll improve your odds against the scamsters.

While ATM's have added some convenience to our lives, a few risks have also popped up. ATM's give criminals another opportunity to get at your money, and you should take steps to reduce your risk. Most of us can stay out of trouble with simple common sense, but you should periodically review some proven tactics. Follow these seven steps, and you'll improve your odds against the scamsters.

Look Around Before You Approach

Take a quick look at your surroundings. See if anybody or anything looks suspicious. Is anybody watching you or standing too close?

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Use ATM's That You're Familiar With

If you know an area well and have used an ATM before, you can expect similar results. In other words, your chances of getting robbed at a 'familiar' ATM are less than your chances of getting robbed at a 'new' ATM. There are a variety of reasons for this, but the point is that your odds are a lot better with a trusted source.

Look Over the Machine Before Inserting Your Card

If you see something that looks unfamiliar on the machine, it could be part of an ATM scam. Card skimmers (external readers) and hidden cameras can be used to compromise a bank account. Bottom line: if it looks funny, look for another ATM.

Lock Your Doors and Secure Windows at Automobile ATM's

We've all heard the stories about carjacking. Think how much more attractive you are as a target with cash-in-hand. When your car is stopped and you're picking up cash, just take the half-second required to lock the doors and keep crooks out.

Have Your Card Ready While Approaching the ATM

If you're quick, your chances are better. On the other hand, you're exposing yourself unnecessarily if you stand around the ATM digging through your wallet or purse for that special card. Get it out before you leave your car or as you're approaching the ATM and get your transaction started as soon as possible.

Use ATM's That are Well Lit and Safe

Have you ever had to swipe your ATM (or Credit/Debit) card to get into an ATM booth after hours? One of the reasons is that only somebody with a valid card can get through the door. This makes it less likely that an 'undesirable' will approach you just as your cash is coming out. Obviously this is not foolproof -- a crook can steal somebody's card and use it immediately.

Get Cash Out of Sight

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This is pretty obvious, but some people need to be more conscious. After you get your cash, get it out of sight. Whether it's a lot of money or a little, cash can be tempting when it's out in the open.

Test Your Computer's SecurityThis site offers a wealth of information on securing your computer in order to minimize the threat of identity theft and unauthorized account access.

BENEFITS

With the increasing popularity of the internet, more and more industries are seeking ways to utilize this popular medium in an effort to keep up with the changing technological preferences of their customers. These days you can do just about anything online from grocery shopping to making a free phone call to a friend in Tokyo through your PC. The possibilities of the internet are seemingly endless and the banking industry has decided that it will not be left behind. While most people have at least heard of online banking, the majority of them have probably not tried it yet. Maybe it's because we find more comfort in working with real people and real paper when it comes to money matters rather than performing transactions in the seemingly impersonal universe of the World Wide Web. Whatever the case may be, there are both advantages and disadvantages to online banking. This article will outline these advantages and disadvantages so you can either feel justified in your fears or see online banking as a safe way to quickly and efficiently manage your finances.

Let's begin with the advantages of online banking.

First, online banking is convenient. It allows you to perform transactions, pay bills and check balances 24 hours a day, 7 days a week. The bank virtually never closes because it is as accessible as your PC or laptop computer. No matter where you are in the country or in the world, you can visit your online bank and handle money matters. You can even schedule to pay several payees ahead of time rather than keeping up with paper bills or trying to remember when to visit a payee's web site to make an online payment. Your bank will automatically send the payments on your behalf in the amounts and on the dates you specify.

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Second, online banking is fast, efficient and effective. Through the internet, transactions are typically performed and executed at a faster rate than ATM's. In addition, online banks give you the ability to handle several bank accounts (checking, savings, CDs, IRAs, etc.) from one site. The majority of banking sites are also compatible with programs like Quicken and Microsoft Money, so as to allow for more effective management of assets.

Just as with anything else, there are disadvantages to online banking.

The main issue for most people is that of trust. They may wonder if their transaction went through successfully or if they clicked on the correct button. The best way to overcome this uneasiness is to make a habit of printing the transaction receipt. Keep this receipt until your bank statement or online account view confirms that you have successfully executed the transaction.

Online banking sites can also take a while to start up and can be difficult to learn at first. Some banks require customers to provide some form of photo identification in addition to signing a form at one of their branches. Spouses may also have to sign a power of attorney if you both plan to access and handle your accounts together online. In addition to all of this, it may take a while to learn how to use your banking site. Most if not all banks will offer an online banking tutorial. Some even offer live customer support for online banking via chat, email, or phone.

Clearly, online banking has both advantages and disadvantages. It simplifies life for some people and for them it is frankly a better way to bank. For others it may be a little more complex and downright intimidating. In light of these two perceptions, more and more banks are offering online banking as a viable option for their customers.

ONLINE SHOPPING

Online shopping is the process consumers go through to purchase products or services over the Internet. An online shop, e-shop, e-store,

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internet shop, web shop, web store, online store, or virtual store evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or in a shopping mall.

The metaphor of an online catalog is also used, by analogy with mail order catalogs. All types of stores have retail web sites, including those that do and do not also have physical storefronts and paper catalogs. Online shopping is a type of electronic commerce used for business-to-business (B2B) and business-to-consumer (B2C) transactions.

Web shop

The term "Web shop" also refers to a place of business where web development, web hosting and other types of web related activities take place (Web refers to the World Wide Web and "shop" has a colloquial meaning used to describe the place). Buying online introduced new ways of reducing costs by reducing the number of staff needed. It is a more effective way of getting products to people and spreading into different demographics.

Benefits of online shopping

Bargaining power of consumers. They enjoy a wider choice

Supplier power. It is more difficult for consumers to manage a non-digital channel.

Internet increases commoditization

Threat of new entrants. Online means it is easier to introduce new services with lower over-heads

Threat of substitutes

Rivalry among competitors. It is easier to introduce products and services to different market

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History

Online shopping pre-dates the internet/www, the IBM PC and Microsoft. It was invented in the UK in 1979 by Michael Aldrich of Redifon Computers. Aldrich connected a modified 26" color television to a real-time transaction processing computer via a domestic telephone line and demonstrated online shopping. From 1980 onwards he sold his systems in the UK with considerable success.

The world's first recorded B2B online shopping system was Thomson Holidays in March 1981. The world's first recorded B2C was Gates head SIS/Tesco in May 1984. The world's first recorded online home shopper was Mrs. Jane Snowball of Gates head, England in May 1984. During the 1980s online shopping was also used extensively in the UK and some parts of continental Europe by auto makers Peugeot-Talbot, Ford, Nissan and General Motors. All these organizations and others, particularly in Financial Services and manufacturing industry, used the Aldrich systems. These systems operated over the switched public network in dial-up and leased line modes. There was no broadband capability.

In 1990 Tim Berners-Lee created the first World Wide Web server and browser. In 1992 Charles Stack created the first online book store, Book Stacks Unlimited (aka Books.com), two years before Jeff Bezos started Amazon. In 1994 other advances took place, such as online banking and the opening of an online pizza shop by Pizza Hut.[6] During that same year, Netscape introduced SSL encryption of data transferred online, which has become essential for secure online shopping. In 1995 Amazon expanded its online shopping, and in 1996 eBay appeared.

Customers

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In general, shopping has always catered to middle class and upper class women. Shopping is fragmented and pyramid-shaped. At the pinnacle are elegant boutiques for the affluent; a huge belt of inelegant but ruthlessly efficient “discounters” flog plenty at the pyramid’s precarious middle. According to the analysis of Susan D. Davis, at its base are the world’s workers and poor, on whose cheapened labor the rest of the pyramid depends for its incredible abundance. Shopping has evolved from single stores to large malls containing many stores that most often offer attentive service, store credit, delivery, and acceptance of returns. These new additions to shopping have encouraged and targeted middle class women.

In recent years, online shopping has become popular; however, it still caters to the middle and upper class.[citation needed] In order to shop online, one must be able to have access to a computer, a bank account and a debit card. Shopping has evolved with the growth of technology. According to research found in the Journal of Electronic Commerce, if we[who?] focus on the demographic characteristics of the in-home shopper, in general, the higher the level of education, income, and occupation of the head of the household, the more favourable the perception of non-store shopping. An influential factor in consumer attitude towards non-store shopping is exposure to technology, since it has been demonstrated that increased exposure to technology increases the probability of developing favourable attitudes towards new shopping channels.

Online shopping widened the target audience to men and women of the middle class. At first, the main users of online shopping were young men with a high level of income and a university education. This profile is changing. For example, in USA in the early years of Internet there were very few women users, but by 2001 women were 52.8% of the online population. Sociocultural pressure has made men generally more independent in their purchase decisions, while women place greater value on personal contact and social relations. [Citation needed]

Trends

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One third of people that shop online use a search engine to find what they are looking for and about one fourth find websites by word of mouth. Word of mouth has become a leading way by which people find shopping websites. When an online shopper has a good first experience with a certain website, sixty percent of the time they will return to that website to buy more.

Books are one of the things bought most online. However, clothes, shoes, and accessories are all very popular things bought online. Cosmetics, nutrition products, and groceries are increasingly being purchased online. About one fourth of travelers buy their plane tickets online because it is a quick and easy way to compare airline travel and make a purchase.

From a sociological perspective, online shopping is arguably the most predictable way to shop One knows exactly what website to go to, how much the product will cost, and how long it will take for the product to reach them.

Logistics

Consumers find a product of interest by visiting the website of the retailer directly, or do a search across many different vendors using a shopping search engine.

Once a particular product has been found on the web site of the seller, most online retailers use shopping cart software to allow the consumer to accumulate multiple items and to adjust quantities, by analogy with filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete. Less sophisticated stores may rely on consumers to phone or e-mail their orders

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(though credit card numbers are not accepted by e-mail, for security reasons).

Payment

Online shoppers commonly use credit card to make payments, however some systems enable users to create accounts and pay by alternative means, such as:

Debit card

Various types of electronic money

Cash on delivery (C.O.D., offered by very few online stores)

Cheque

Wire transfer/delivery on payment

Postal money order

Reverse SMS billing to mobile phones

Gift cards

Direct debit in some countries

Some sites will not allow international credit cards and billing address and shipping address have to be in the same country in which site does its business. Other sites allow customers from anywhere to send gifts anywhere. The financial part of a transaction might be processed in real time (for example, letting the consumer know their credit card was declined before they log off), or might be done later as part of the fulfillment process.

While credit cards are currently the most popular means of paying for online goods and services, alternative online payments will account for 26% of e-commerce volume by 2009 according to Celent

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Product delivery

Once a payment has been accepted the goods or services can be delivered in the following ways.

Download: This is the method often used for digital media products such as software, music, movies, or images.

Shipping: The product is shipped to the customer's address.

Drop shipping: The order is passed to the manufacturer or third-party distributor, who ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.

In-store pickup: The customer orders online, finds a local store using locator software and picks the product up at the closest store. This is the method often used in the bricks and clicks business model.

In the case of buying an admission ticket one may get a code, or a ticket that can be printed out. At the premises it is made sure that the same right of admission is not used twice.

Shopping cart systems

Simple systems allow the offline administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a web space. These systems do not use an online database.

A high end solution can be bought or rented as a standalone program or as an addition to an enterprise resource planning program. It is usually installed on the company's own web server and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent.

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Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops at the same time.

Open source shopping cart packages include advanced platforms such as Interchange, and off the shelf solutions as Avactis, Satchmo, osCommerce, Magento, Zen Cart, VirtueMart, Batavi and PrestaShop.

Commercial systems can also be tailored to ones needs so that the shop does not have to be created from scratch. By using a framework already existing, software modules for different functionalities required by a web shop can be adapted and combined.

Design

Why does electronic shopping exist? For customers it is not only because of the high level of convenience, but also because of the broader selection; competitive pricing and greater access to information. For organizations it increases their customer value and the building of sustainable capabilities, next to the increased profits

Information load

Designers of online shops should consider the effects of information load. Mehrabian and Russel (1974) introduced the concept of information rate (load) as the complex spatial and temporal arrangements of stimuli within a setting. The notion of information load is directly related to concerns about whether consumers can be given too much information in virtual shopping environments. Compared with conventional retail shopping, computer shopping enriches the information environment of virtual shopping by providing additional product information, such as comparative products and services, as well as various alternatives and attributes of each alternative, etc.

Two major sub-dimensions have been identified for information load: complexity and novelty. Complexity refers to the number of different elements or features of a site, which can be the result of increased information diversity. Novelty involves the unexpected, suppressing, new, or unfamiliar aspects of the site. A research by Huang (2000) showed that the novelty dimension kept consumers exploring the shopping sites,

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whereas the complexity dimension has the potential to induce impulse purchases

Consumer expectations

The main idea of online shopping is not in having a good looking website that could be listed in a lot of search engines and it is not about the art behind the site. It also is not only just about disseminating information, because it is all about building relationships and making money. Mostly, organizations try to adopt techniques of online shopping without understanding these techniques and/or without a sound business model. Rather than supporting the organization’s culture and brand name, the website should satisfy consumer's expectations. Many researchers notify that the uniqueness of the web has dissolved and the need for the design, which will be user centered, is very important. Companies should always remember that there are certain things, such as understanding the customer’s wants and needs, living up to promises, never go out of style, because they give reason to come back. And the reason will stay if consumers always get what they expect. McDonaldization theory can be used in terms of online shopping, because online shopping is becoming more and more popular and website that wants to gain more shoppers will use four major principles of McDonaldization: efficiency, calculability, predictability and control.

Organizations, which want people to shop more online for them, should consume extensive amounts of time and money to define, design, develop, test, implement, and maintain website. Also if company wants their website to be popular among online shoppers it should leave the user with a positive impression about the organization, so consumers can get an impression that the company cares about them. The organization that wants to be acceptable in online shopping needs to remember, that it is easier to lose a customer then to gain one. Lots of researchers state that even when site was a “top-rated”, it would go nowhere if the organization failed to live up to common etiquette, such as returning e-mails in a timely

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fashion, notifying customers of problems, being honest, and being good stewards of the customers’ data. Organizations that want to keep their customers or gain new ones try to get rid of all mistakes and be more appealing to be more desirable for online shoppers. And this is why many designers of web shops considered research outcomes concerning consumer expectations. Research conducted by Elliot and Fowell (2000) revealed satisfactory and unsatisfactory customer experiences.