Ecommerce (Elective - II)

(Diploma in Computer Engineering)

IIIrd year / IInd part

Compiled By Anil Oli

All rights belong to Tech About Need

 Table Of Contents

Unit: 1 - Introduction 5
Ecommerce 5
History of E-commerce 5
E-Business 5
Global trading environment & adoption of e-commerce 6
Differences between traditional and e-Commerce 6
Advantages and disadvantages of e-Commerce 7
E-commerce framework 8

Unit: 2 - Business Models of e-Commerce 10

Business Model 10
Business to Business (B2B) 10
Business to Consumer (B2C) 11
Consumer to Consumer (C2C) 11
Development of B2B e-Commerce 12
B2B Vs B2C 12
E-Procurement 13

Unit : 3 - The network infrastructure for e-commerce 14

Introduction to information superhighway (I-way) 14
Requirements of I-way 14
Components of I-way 15
Internet, Intranet, Extranet 15
Software agents 17
Types of software agents 17
ADSL, Wi-Fi, UMTS, LTE, Bluetooth 18

Unit-4: Electronic Data Interchange (EDI ) 20

Concepts of EDI 20
EDI Vs e-mail 20
Components of EDI 21
Document Standard 22
XML 22
EFT 23
Internet Advertising 23
Benefits of EDI 24
How EDI works 24
Security and privacy issues of EDI 25
Advantages of EDI 26
Applications of EDI 26
Unit-5: Mobile Commerce 27
Definition 27
Application Of M-Commerce 27
Advantages of M-commerce 28
Wireless application protocol 28
WAP Browser 29
Mobile Commerce architecture 29

Unit-6: Network Security 30

E-Commerce Security Issues 30
Risks Involved in e-Commerce 32
Concept of network 34
Computer Security 34
Data and message security 34
Firewall 34
Cryptography 35
Types of cryptography 36
Public Key in Cryptography 37
Private Key in Cryptography 37
Antivirus 37
Digital Signature 37
Digital Certificate 38
Certificate Authority 38
Third party authentication 38
Secure Socket Layer (SSL) 38
VPN (Virtual Private Network) 38

Unit-7: Electronic payment system (EPS) 39

Online banking 39
EPS 39
Types of EPS 40
Security Requirement of EPS 40
Secure electronic transaction (SET) 41
Payment System 42
Payment Gateway 42
Payment Processing 42
Payment Processing Network 42
Digital wallet 42
Online banking facilities of banks (Nepali banks) 43

Unit-8: Legal and Ethical Issues 43

Issues related to e-Commerce 43
 Legal issues 44
Ethical issues 44
Taxation 46

Unit-9: Cyber law 47

Concept of Cyber Law 47
Aims of cyber law 47
Salient features of Cyber law 48

Unit-10: Introduction to Entrepreneurship 48

Entrepreneur 48
Entrepreneurship 48
Entrepreneurship Development 49
MANAGER 49
Entrepreneur vs Entrepreneurship 50
Entrepreneur vs Manager 50
Entrepreneurial Culture 51

Unit-11: Online marketing 52

Definition 52
Concept of online marketing 52
Advantages of online marketing 52
Online marketing Vs Offline marketing 53
Tools for online marketing 53
Tools for offline marketing 54
Issues with online marketing 55
 Unit: 1 - Introduction

Ecommerce

E-commerce is the buying and selling of goods or services via the internet, and the
transfer of money and data to complete the sales. It’s also known as electronic commerce
or internet commerce.

Ecommerce is often used to refer to the sale of physical products online, but it can also
describe any kind of commercial transaction that is facilitated through the internet.

History of E-commerce

History of E-commerce was introduced in our country just with the purpose that the Nepali
residing abroad can send gifts to the one in Nepal. People outside the country.

E-commerce has been developing since the 1990 ad and its evolution is directly linked to
the advancement of information technology. History of E-commerce purchasing
experience has a more positive attribute toward online buying and selling. E-commerce or
Electronic commerce also known as e-business refers to the transaction of goods and
services.

The history of e-commerce started over 40 year ago. When the introduction of technology
like electronic data interchanges and teleshopping in the 1970 ad. The history of
e-commerce is closely inter-wined with the history of the internet. Online shopping became
possible when the internet was open to the public in 1991.

E-Business

E-Business (electronic business) is any process that a business organization conducts

over a computer-mediated network. Business organizations include any for-profit,
governmental, or nonprofit entity. Their processes include production, customer and
internal or management-focused business processes.

E-Business refers to business with the help of the internet. Electronic business differs from
electronic commerce as it does not only deal with online transactions of selling and buying
of a product and/or service but also enables the conduct of business processes within the
value chain through internal or external networks.
Global trading environment & adoption of e-commerce

The Global trading environment consists of trade negotiations between nations to form
agreements by giving a way some of their business parts. The trading environment is an
interrelated system whose elements include potential trading objects and usable trading
tools.

The world has become a global village. People of Nepal can communicate and do
business with the people of the USA. All the primary groups of e-business firms are in a
race to capture global business revenues. Telecommunication firms are competing to build
the infrastructure in countries all over the world. It performs ISP services and software
procedures like mercantile corporation ETC.

Adoption of e-commerce has been adopted because it is the overall process of buying and
selling , transferring or exchanging product or service or information VIA computer
networks and the internet. The purpose of this study is e-commerce, business network,
ICT skill, technology qualified human resources . E-commerce is a buying and selling of
goods and services or transmitting of fund data over an electronic network. The term
e-business is often used interchangeability, cost of equipment and services , security
system, distribution logistics.

Differences between traditional and e-Commerce

E-Commerce Traditional Commerce

E-commerce is a form of online shopping Traditional Commerce is a traditional

where users can buy goods and services approach to buy goods and services in
from their electronic devices such as person which involves face to face dealing.
laptop, mobile, tablet.

It is used to save valuable time and money. It is ancient and still in usage where the
digital network is not reachable.

It is easier to use and operate if the It can be followed by any person

customer has basic digital gadget irrespective of education or knowledge.
knowledge.
 It is in electronic or digital mode only. It can be in any form which is non
electronic or manual form.

It is available round the clock. It is available during limited time as

prescribed by the law and based on the
type of business.

Inspecting a product before purchasing is Inspecting a product before purchasing is

not possible in this type. possible in traditional commerce business
models.

Advantages and disadvantages of e-Commerce

Advantages:

● Easy to set up: electronic business is easy to set up even from home, the only
requirements are software, a device and internet connection.

● Flexible Business Hours: There are no time barriers that a location-based business
can encounter since the internet is available to everyone all the time. Your products
and services can be accessed by everyone with an internet connection.

● Cheaper than Traditional Business: Electronic business is less costly than a

traditional business, but it is more expensive to set up. Transactions cost are also
cheaper.

● No Geographical Boundaries: The greatest benefit is the possibility of geographical

dispersion. Anyone can order anything from anywhere at any time.

● Government Subsidies: Digitalisation is very encouraged by the government and

they provide the necessary support.

● Newmarket entry: It has a great potential to enable an entry to a previously unknown

market that a traditional business could not.[22][23]

● Lower levels of inventory: Electronic business enables companies to lower their

level of inventory by digitizing their assets. (i.e.: Netflix does not sell anymore
physical DVD's but proposes online streaming content instead).
 ● Lower costs of marketing and sales: E-commerce allows the actors of the industry
to advertise for their product/service offer (i.e.: house rental) at generally lower costs
than by promoting physically their business.

Disadvantages

● Lack of Personal Touch: The products cannot be examined or felt before the final
purchase. In the traditional model, we have a more personal customer experience,
while in electronic business that is mostly not the case. Another missing factor of
personal touch could also be in online transactions.

● Delivery Time: Traditional business enables instant satisfaction as you obtain the
product the moment you purchase it, while in electronic business that is not
possible. There will always be a waiting period before you receive the product. For
example, Amazon assures one-day delivery. This does not resolve the issue
completely, but it is an improvement.

● Security Issues: Scams could be mentioned as a factor for people's distrust in

electronic business. Hackers can easily get customers financial and personal
details. Some customers still find it hard to trust electronic businesses because of
the lack of security, reliability and integrity issues.

E-commerce framework

An ecommerce framework refers to the type of software you're using to build your
ecommerce store. For example, ecommerce software Magento uses an open source
framework, while BigCommerce is SaaS. Both also enable a headless framework.

1. SaaS

2. Open source

3. Headless commerce

SaaS

SaaS stands for “software as a service.” Users subscribe as opposed to buying software
that the vendor continues to host, maintain and improve. SaaS platforms, on average,
come with more out-of-the-box functionality.

Pros
 ● The vendor can push out real-time feature upgrades as they continue to improve the
software over time.

● Total cost of ownership is typically much less than with an open source or headless
commerce framework.

● SaaS can help you get to market quickly.

● Security and maintenance are included in your costs, and you won’t have to worry
about hosting.

Cons

● Not as customizable as open source or headless commerce frameworks.

Open Source

Open source software is software that allows users to access and change the source code
on their own software instance. Open source ecommerce platforms offer a high level of
customization, but it comes at a cost.

You’ll need developers to not just make the customizations you want, but also to maintain
the code over time. The more customization, the higher the risk of unintended
consequences and ensure continued cybersecurity defenses to protect your business and
your shoppers.

Pros

1. Almost limitless customization opportunities.

2. Engaged communities of developers.

Cons

1. You’ll be responsible for installing software updates and security patches.

2. The ability to customize also means that the software is more complex, and you’ll
be more reliant on developers not just at implementation but over the lifecycle of
your business.

3. The TCO is typically high once you factor in all the related extraneous costs.

Headless

Headless commerce decouples the back and front-ends so retailers can choose their own
front-end presentation layer to deliver a differentiated customer experience by leveraging a
composable architecture approach. This also gives you the opportunity to take a
multi-vendor approach, using one vendor for the back-end solution and something
different on the front.

Pros

1. You’ll have the flexibility to use the front-end of your choice, from digital experience
platforms to PWAs and more.

2. You can use your back-end to power multiple front-ends for a multi-site experience.

3. When your front- and back-ends are decoupled, each can undergo development
work without risking impacts to each other.

Cons

1. The total cost of ownership can be high, because you’ll be paying for your
back-end, front-end and development work.

2. Architectures can be complex and require developer expertise.

Unit: 2 - Business Models of e-Commerce

Business Model

Business model refers to a company's plan for making a profit. It identifies the products or
services the business plans to sell, its identified target market, and any anticipated
expenses. Business models are important for both new and established businesses. They
help new, developing companies attract investment, recruit talent, and motivate
management and staff. Established businesses should regularly update their business
plans or they'll fail to anticipate trends and challenges ahead. Business plans help
investors evaluate companies that interest them.

Business to Business (B2B)

Business-to-business (B2B), also called B-to-B, is a form of transaction between

businesses, such as one involving a manufacturer and wholesaler, or a wholesaler and a
retailer. Business-to-business refers to business that is conducted between companies,
rather than between a company and individual consumer. Business-to-business stands in
contrast to business-to-consumer (B2C) and business-to-government (B2G) transactions.
 ● Business-to-business (B2B) is a transaction or business conducted between one
business and another, such as a wholesaler and retailer.

● B2B transactions tend to happen in the supply chain, where one company will
purchase raw materials from another to be used in the manufacturing process.

● B2B transactions are also commonplace for auto industry companies, as well as
property management, housekeeping, and industrial cleanup companies.

Business to Consumer (B2C)

The term business-to-consumer (B2C) refers to the process of selling products and
services directly between a business and consumers who are the end-users of its products
or services. Most companies that sell directly to consumers can be referred to as B2C
companies.

B2C became immensely popular during the dotcom boom of the late 1990s when it was
mainly used to refer to online retailers who sold products and services to consumers
through the Internet.

As a business model, business-to-consumer differs significantly from the

business-to-business (B2B) model, which refers to commerce between two or more
businesses.

1. Business-to-consumer refers to the process of businesses selling products and

services directly to consumers, with no middle person.

2. B2C typically refers to online retailers who sell products and services to consumers
through the Internet.

3. Online B2C became a threat to traditional retailers, who profited from adding a
markup to the price.

Consumer to Consumer (C2C)

Consumer to consumer (C2C) markets provide a way to allow customers to interact with
each other. Traditional markets require business to customer relationships, in which a
customer goes to the business in order to purchase a product or service. In customer to
customer markets, the business facilitates an environment where customers can sell
goods or services to each other.
Consumer-to-consumer (or citizen-to-citizen) electronic commerce involves the
electronically facilitated transactions between consumers through some third party. A
common example is an 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 the quality of the products being offered.

Consumer to consumer (C2C) marketing is the creation of a product or service with the
specific promotional strategy being for consumers to share that product or service with
others as brand advocates based on the value of the product. The investment into
conceptualizing and developing a top-of-the-line product or service that consumers are
actively looking for is equitable to a retail pre-launch product awareness marketing.

Development of B2B e-Commerce

B-to B refers to the activities of buying and selling that occur between business as
opposed to business. Selling to consumers. E-commerce development process project &
clients. E-commerce web site design and development is creating e-commerce solutions
tailored to a specific business model and audience .

E-commerce is the activity of buying or selling products on online services or over the
internet. E-commerce originated as a standard for the exchanges of business documents
such as orders or invoices between suppliers and their business customers. B-to-B
E-commerce is offering products and services that specifically target outside business
organizations. Who purchase from large suppliers then sell these products to their
customers through separate business to consumer , e-commerce web sites.

B2B Vs B2C

B2B e-commerce B2C e-commerce

Multiple pricing tiers and order volume Single pricing tiers for all customers
discounts

Account manager handle issues Customer service team helps

customers
 Website is closer to an account Website is built to attract and convert
dashboard

Checkout process has multiple steps Checkout is streamlines to avoid drop

and options offs

Organization must be about the Clear, concise and simple languages to

be used in order.
Product /service.
Can only send communication that the
Communication must be about the
information and agree.
Individual job role.

E-Procurement

E-procurement is the process of buying and selling supplies and services over the Internet.
It differs from e-commerce in that it makes use of a supplier’s closed system typically
available only to registered users.

When implemented properly, e-procurement opens the lines of communication between a

company and a supplier by creating a direct link and facilitating interactions such as bids,
purchase orders and emails.

Benefits of E-Procurements

Cost Savings

Built-in monitoring tools help control costs and maximize performance, reducing overhead
and paperwork. Fully automated systems streamline processes and can result in a faster
cycle from creating an order to fulfillment. There also is an opportunity for a larger selection
of products and services.

Shorter Purchasing Cycles

Centralized transaction tracking simplifies reporting on orders, payments, and requisitions,

as well as ensuring contract compliance, all of which can reduce delivery time. Buyers
have electronic access to available products, services, and prices.

Improved Inventory Control

Procurement professionals can quickly locate products from preferred suppliers and are
limited to the purchases they can make, so inventory is better controlled.

Transparency

All information is centralized and can be made available to management, stakeholders,

shareholders or the public, as appropriate.

Unit : 3 - The network infrastructure for

e-commerce

Introduction to information superhighway (I-way)

Electronic commerce needs a network infrastructure to transport the content- data, audio,
visual, text, animation and so on. This network infrastructure is provided by what is known
as the I-way or information superhighway.

The information superhighway may be defined as a high capacity, electronic pipeline to a

consumer or business premise that is capable of simultaneously supporting a large
number of e-commerce applications and providing interactive connectivity between users
and services. The I-way has emerged as the basic network infrastructure for all types of
e-commerce activities due to its capability to provide integrated voice, data and video
services.

Requirements of I-way

Start: The alignment should be short so as to make the road project economical.

Easy: The alignment should be such that it is easy to construct and maintain the road with
problems.

Safe: safe enough for construction and maintenance from the viewpoint of satiability
natural will slope cut foundation.

Economical: The road alignment could be considered economical only if the total life
cycle cost considering the initial cost, maintenance cost cost and vehicle operation cost is
lowest.

Utilities: The alignment should be fixed such that it provides comfort to the driver and
passengers.
Natural aspect: As the road project needs large investment , the government should be
clear about the requirement of the road.

The distance between two terminal stations should be short and as far as possible straight.
It consists of three key elements in addition to the communication infrastructure that
permit two way communication, information appliances such as TV, Telephone and
computers and new products and combining elements of the internet, networking
communication and transfer in an ideal highway.

Components of I-way

Network access equipment:

Network access equipment which is at the consumer end and enables the consumer to
access the network. It consists of the hardware such as computers, modems, routers,
switches for computer networks, set-top boxes for television networks and software
platforms such as browsers and operating systems.

Access media:

Access media provide the communication backbone for the transmission of data and
information. The access providers may be differentiated into four categories: telecom
based, cable TV based, wireless based or computer based on-line systems.

Global information distribution networks:

It provides the infrastructure for connecting across the countries and continents.They
include such networks as the long distance telephone lines, the satellite networks and
internet.

Internet, Intranet, Extranet

Internet

Internet is a world wide, publicity accessible computer network of interconnected

computer networks that transmitted data using the standard internet protocol. The largest
internet network in the world is the internet.

The internet forms a well known component of the global information distribution network.
It targets a wide range of e-commerce applications such as video on demand, home
shopping, e-mail, edi, information publishing, information retrieval, video conferencing and
many more.
All the components of the I-way together provide a network infrastructure for the
e-commerce activities.

Intranet

An intranet is a private network that can only be accessed by authorized users. For
example, a business may create an intranet to allow employees to securely share
messages and files with each other.

An intranet can be defined as a private network used by an organization. Its primary

purpose is to help employees securely communicate with each other, to store information,
and to help collaborate.

Applications of an Intranet

● Company-wide Announcements

● A Company Directory

● Instant Messaging Feature

● Content Management System

● Automating Forms Capability

● Social Network for Employees

● Event Management

● Workgroup Scheduling and Calendars

Extranet

The extranet is the private networks that use the internet that allows people outside
business . Internet protocol network connectivity and public communication system to
security share part of a business information or operation with suppliers, vendors,
partners, customers or other business. An extranet can be viewed as part of a company's
internet that is extended to users outside the company.

An extranet is often considered part of a company's intranet extended to authorized users

outside of the organization. It provides controlled access to authorized people outside of
the company. An extranet can be understood as a private internet over the internet
creating a private network for sharing information and programs.
Software agents

A software agent is a piece of software that functions as an agent for a user or another
program, working autonomously and continuously in a particular environment. It is
inhibited by other processes and agents, but is also able to learn from its experience in
functioning in an environment over a long period of time.

Software agents offer various benefits to end users by automating repetitive tasks. The
basic concepts related to software agents are:

1. They are invoked for a task

2. They reside in "wait" status on hosts

3. They do not require user interaction

4. They run status on hosts upon starting conditions

5. They invoke other tasks including communication

Types of software agents

Some Software Agents are:

Interface, collaborative, information, reactive, hybrid, mobile, smart agent, Corporate

,autonomously agent and learn agent

Explanation of Some Software Agents:

Interface

Interface as a "face-to-face," a place where things, or people and things meet. Any
common boundary or area of convergence can be an interface. Used as a verb,
communicating and working together.

Collaborative

Collaboration would be to outline it as the process of two or more people or organizations

working together to complete a task or achieve a goal.

Information

Knowledge communicated or received concerning a particular fact or information

concerning a knowledge gained through study, communication, research, instruction etc
factual data of general information is amazing.
Mobile

Mobile phones are used for a variety of purposes, such as keeping in touch with family
members, for conducting business, and in order to have access to a telephone in the event
of an emergency. Some people carry more than one mobile phone for different purposes,
such as for business and personal use.

ADSL, Wi-Fi, UMTS, LTE, Bluetooth

ADSL

ADSL stands for Asymmetric Digital Subscriber Line. It is a technology that provides high
transmission speeds for video and voice to homes over an ordinary copper telephone wire
ADSL is a type of internet connection that uses a home landline to provide broadband. It
splits the telephone connection so that frequencies not used in a voice telephone call are
used for broadband. ADSL where the speed of data sent is known as upstream and data
received is known as downstream.

Wi-Fi

Wi-Fi is the wireless technology used to connect computers, tablets, smartphones and
other devices to the internet. Wi-Fi is the radio signal sent from a wireless router to a
nearby device, which translates the signal into data you can see and use.

Currently, WiFi is available in two frequencies 2.4GHz and 5GHz. 2.4GHz has the larger
distance coverage but it has interference issues in the network. While 5GHz has a shorter
distance than 2.4GHz but less interference with great speed improvement.

UMTS (3G)

UMTS stands for Universal Mobile Telecommunications System. It is a third generation

mobile cellular system for networks based on the GSM standard. UMTS uses wideband
code-division multiple access (W-CDMA) radio access technology to offer greater spectral
efficiency and bandwidth to mobile network operators.

UMTS uses the static fixed carrier of frequency 5MHz. UMTS supports 3G.

LTE (4G)

Long-Term Evolution (LTE) is a standard for wireless broadband communication for mobile
devices and data terminals, based on the GSM/EDGE and UMTS/HSPA standards. It
improves on those standards capacity and speed by using a different radio interface and
core network improvements. LTE is the upgrade path for carriers with both GSM/UMTS
networks and CDMA2000 networks. Because LTE frequencies and bands differ from
country to country, only multi-band phones can use LTE in all countries where it is
supported.

LTE is also called 3.95G and has been marketed as "4G LTE" and "Advanced 4G" but it
does not meet the technical criteria of a 4G wireless service, as specified in the 3GPP (3rd
Generation Partnership Project) Release 8 and 9 document series for LTE Advanced.

BLUETOOTH

Bluetooth is a wireless technology standard whose purpose is to connect without a cable.

The Bluetooth module is a tiny part of the chip in a device, which it wirelessly
communicates with a Bluetooth module on any other devices.

Bluetooth is a short-range wireless technology standard that is used for exchanging data
between fixed and mobile devices over short distances using UHF radio waves in the ISM
bands, from 2.402 GHz to 2.48 GHz, and building personal area networks.

Use of Bluetooth

● In laptops, notebooks and wireless PCs

● In mobile phones and PDAs (personal digital assistant).
● In printers.
● In wireless headsets.
● In wireless PANs (personal area networks) and even LANs (local area networks)
● To transfer data files, videos, and images and MP3 or MP4.
● In wireless peripheral devices like mouse and keyboards.
● In data logging equipment.
● In the short-range transmission of data from sensor devices to sensor nodes like
mobile phones.

Advantages of Bluetooth

● Wireless
● Availability
● Usability
● Efficiency
● Security
 Unit-4: Electronic Data Interchange (EDI )

Concepts of EDI

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

using a standardized format; a process which allows one company to send information to
another company electronically rather than with paper. Business entities conducting
business electronically are called trading partners. Electronic data interchange (EDI) is the
concept of businesses electronically communicating information that was traditionally
communicated on paper. EDI that will suit your business needs, technical capabilities and
budget. Many larger companies adopt hybrid EDI solutions to connect with their business
partners, depending on size and frequency of their transactions.

EDI Vs e-mail

EDI EMAIL

There is typically no human involvement in A human-to-software interface is involved

the processing of the information, as the at minimum of one end of the interchange.
interface has software-to-software
orientation.

The data are structured in a software The data are not necessarily structured to
understandable way. be software understandable.

The interchange is composed by one The message is composed by a human

software for interpretation by another and/or interpreted by a human.
software.

If a replay is involved, it is composed by a A reply is composed by a human and/or

software to be interpreted by another interpreted by a human.
software.
Components of EDI

Application/ Conversion Layer

The application layer consists of actual business applications that are going to be
connected through the EDI system for exchange of information. This application uses their
own electronic format. They need to convert the internal company document format into a
format that can be understood by other trading companies. The application layer is also
called semantic layer.

Standard Format Layer

This layer of EDI architecture defines the structure of the business form. There are different
formats to use EDI documents. Some of which are EDIFACT and ANSI X12.

Transport layer

The data transport layer consists of the services that automate the tasks of electronic
transfer of messages. Some of the protocols used in this layer are Email, FTP, Telnet,
HTTP, X.H35(MIME).

Interconnection Layer

This layer refers to the network infrastructure that is used for the exchange of information
between trading partners. It consists of a dial up line, WAN. Internet. I-way etc.
Document Standard

EDIFACT

Electronic Data Interchange for Administration, Commerce and Transport (EDIFACT) is the
international standard for electronic data interchange, which was developed under the
auspices of the United Nations. The standard was approved as the ISO 9735 standard by
the International Organization for Standardization (ISO) in 1987. The EDIFACT standard
provides rules on how to structure data and standardize messages for multi-industry and
multi-country exchange.

ANSI X12

ANSI X12 stands for American National Standards Institute X12 and refers to the American
EDI standard developed back in 1979 by the ANSI subsidiary Accredited Standards
Committee (ASC).

The goal of ANSI X12 is to uniform standards for inter-industry electronic exchange of
business documents, namely EDI. ANSI X12 is a global set of rules for the intercompany
electronic data exchange between two EDI Trading Partners.

ANSI X12 Standard as Part of EDI communication between Trading Partners.

By defining uniform segments and elements that describe the information in the electronic
file and which are used for a wide variety of business documents (such as invoices,
purchase orders, delivery notes, etc.), a common standard was invented

XML

XML (Extensible Markup Language) is used to describe data. The XML standard is a
flexible way to create information formats and electronically share structured data via the
public internet, as well as via corporate networks.

XML is a markup language based on Standard Generalized Markup Language (SGML)

used for defining markup languages.

XML's primary function is to create formats for data that is used to encode information for
documentation, database records, transactions and many other types of data. XML data
may be used for creating different content types that are generated by building dissimilar
types of content including web, print and mobile content that are based on the XML data.

XML Example:
<personal>

<name>Anil Oli</name>

<birth>

<year>2058</year>

<month>04</month>

<date>08</date>

</birth>

<address>

<permanent>Gadhawa Rural Municipality 6, Dang</permanent>

<temporary>Devinagar 11, Butwal</temporary>

</address>

<email>aniloli42@gmail.com</email>

</personal>

EFT

An electronic funds transfer (EFT) is the electronic transfer of money over an online
network. Electronic funds transfers can be performed between the same bank or a
different one, and can be accomplished with several different types of payment systems.
An EFT can be initiated by a person or by an institution like a business and often doesn’t
require much more than a bank account in good standing.

Some types of EFT includes:

- Direct Deposit
- Wired Transfer
- ATM
- Debit Card
- Online Banking

Internet Advertising

Online advertising, also known as online marketing, Internet advertising, digital advertising
or web advertising, is a form of marketing and advertising which uses the Internet to
promote products and services to audiences and platform users. Online advertising
includes email marketing, search engine marketing (SEM), social media marketing, many
types of display advertising (including web banner advertising), and mobile advertising.
Advertisements are increasingly being delivered via automated software systems operating
across multiple websites, media services and platforms, known as programmatic
advertising.

Benefits of EDI

Improved operational efficiency

Automating the flow of messages with integrated EDI improves the speed and efficiency of
your operations by eliminating the need to manually rekey data in multiple systems.

Fewer errors

By removing manual, paper based processes the occurrence of human errors is

dramatically reduced or even eliminated.

Increased accuracy

Automated message validation ensures that errors are flagged and rectified before they
impact your trading partners and data integrity in your internal systems is maintained.

Increased return on investment (ROI)

Automation through integrated EDI enables you to maximize the benefits of EDI and move
beyond simply complying with your customers' EDI requirements.

Enhanced visibility

EDI provides full transparency of the ordering and invoicing process for you and your
trading partners. This end-to-end visibility enables more informed decisions to be made
and ultimately improves the service delivered to consumers.

Reduced inventory cost: Increased visibility within the supply chain eliminates unknowns
and can therefore enable you to reduce the levels of inventory you need to hold.

How EDI works

EDI optimizes workflow by replacing previous order processes such as mail, fax or email
and electronically exchanges documents between two companies with different business
systems. A translator will convert the business application data between the sender and
receiver, such as trading partners.
An EDI Billing is an electronic version of a paper invoice that sellers send to buyers to
request payment for products delivered. An electronic invoice is one of the most
fundamental documents in an automated EDI system.

Security and privacy issues of EDI

Password Guessing Attacks

Most of the present day systems rely on passwords to gain access but, pass-

words are easy to guess and this makes the system vulnerable to password

guessing attacks. Users are very poor at choosing good passwords. An in-

truder can capture a quantity X that is derived from a password in a known

Way.

Cross Vulnerability

A potential exposure or cross-vulnerability due to technical limitations in one EDI system

can compromise the integrity of the other dependent EDI systems. Cross-vulnerabilities

exist between systems that rely on common values for user identification and

authentication, such as IDs and passwords.

Multiple Standards

Trading partners usually work on a variety of standards such as UN/EDIFACT,

ANSI X12, ODETTE etc.

Problems arise when the two trading partners adhere to different standards. The security
features offered in a particular standard may not be comparable to the other standard.

Authentication

The extensive use of open networks and distributed systems poses serious threats to the
security of end-to-end communications and network components themselves. A
necessary foundation for securing a network is the ability to reliably authenticate
communication partners and other network entities.

Authentication is the most important of the security services, because all other security
services depend upon it.

Non-Repudiation

Non-repudiation services provide a communication user with protection against another

user who later denies that some communication exchange took place. While these
services do not prevent a user from repudiating another user's claim that something
occurred, they provide evidence to resolve any such disagreement. In general, the
evidence must be proved convincingly to the third party arbitrator.

Disclosure of Information

With the introduction and use of EDI, additional security risks arise apart from those which
exist for the conventional electronic information systems.

The computers of a trading partner can initiate transactions inside another partner's
accounting systems which are processed in a totally automatic environment. By its very
nature, EDI requires that the system be continuously open to receive incoming
transactions.

Advantages of EDI

1. It is less costly than traditional system

2. It aids in improved customers service and delivery
3. It reduces error and clerical work.
4. It improves business cycle
5. It has a faster response time
6. It aids in better planning and forecasting.

Applications of EDI

Retail Sector

In the retail sector profit margins usually depend upon efficient inventory management. EDI
provides a structured way to maintain and replenish goods stocked at a retail outlet.
Retailers use a common model stock for each shop location and the point of sale stock
position is updated continuously and data is fed via EDI enabled SCM (supply chain
management) network. The EDI software monitors all the logistics and makes updates in
the original stock.
Manufacturing Sector

EDI ensures effective and efficient management of materials required for production of a
commodity. In the manufacturing sector EDI facilitates Material requirement planning and
just in time manufacturing. The Inventory position of OEM is constantly updated through
EDI and the supplier is notified about the shortage of materials. This helps the supplier to
plan and schedule supply according to requirements of the manufacturer.

Automobile Sector

In the automobile sector EDI is used to keep customers updated with the current product
and pricing information during the purchase cycle. An advance shipping notice is
transmitted through EDI to the customers to prepare a loading schedule and to ensure
proper receipt of the product. The customer may also make payment on receipt of goods
via EDI to speed up the payment process.

Financial Sector

In the financial sector EDI replaces the labor intensive activities of collecting, processing
and dispersing payments with an electronic system. It facilitates the flow of payment
between the bank accounts of trading partners without requiring any human intervention. A
payee's bank account is electronically credited and the payer's account is electronically
credited on the scheduled day of payment; such an exchange is known as electronic fund
transfer (EFT).

Unit-5: Mobile Commerce

Definition

Mobile commerce, also known as m-commerce. It involves using wireless handheld

devices like cellphones and tablets to conduct commercial transactions online, including
the purchase and sale of products, online banking, and paying bills.

Application Of M-Commerce

1. Mobile Banking:

Using a mobile website or application to perform all your banking functions. It is one
step ahead of online banking and has become commonplace these days. For
example, in Nigeria, the majority of banking transactions happen on mobile phones.
 2. Mobile Ticketing and Booking:

Making bookings and receiving your tickets on the mobile. The digital ticket or
boarding pass is sent directly to your phone after you make the payment from it.
Even in India now IRTC and other services provide m-ticketing services.

3. E-bills:

This includes mobile vouchers, mobile coupons to be redeemed and even loyalty
points or cards.

4. Auctions:

Online auctions having now been developed to be made available via mobile
phones as well.

5. Stock Market Reports and even stock market trading over mobile applications.

Advantages of M-commerce

● It provides a very convenient and easy to use the system to conduct business
transactions.
● Mobile commerce has a very wide reach. A huge part of the world’s population has
a mobile phone in their pocket. So the sheer size of the market is tremendous.
● M-commerce also helps businesses target customers according to their location,
service provider, the type of device they use and various other criteria. This can be a
good marketing tool.
● The costs of the company were also reduced. This is due to the streamlined
processes, now transaction cost, low carrying cost and low order processing cost
as well.

Wireless application protocol

WAP stands for Wireless Application Protocol. It is a protocol designed for micro-browsers
and it enables the access of the internet in mobile devices. It uses the markup language
WML (Wireless Markup Language), WML is defined as an XML 1.0 application. It enables
creating web applications for mobile devices. In 1998, WAP Forum was founded by
Ericson, Motorola, Nokia and Unwired Planet whose aim was to standardize the various
wireless technologies via protocols.
WAP protocol was a result of the joint efforts of the various members of WAP Forum. In
2002, WAP forum was merged with various other forums of the industry resulting in the
formation of Open Mobile Alliance (OMA).

WAP Browser

A wireless access protocol (WAP) browser allows mobile devices such as older cellular
phones to access compatible web content. The mini-browser can use multiple Internet
protocols to render web pages into plain text or simplified versions of the original web
page. In order for a WAP browser to be effective, web developers usually create separate
WAP web pages for mobile devices. Otherwise without WAP optimization, web content will
usually take longer to load and may not render correctly in older mobile devices.

During the early days of the Internet, mobile devices had limited system resources and
screen size, which made loading Internet-based content such as email, instant messaging
and newsgroups a challenge.

Mobile Commerce architecture

Mobile commerce applications need a reliable wireless network, different protocols for
business services, mobile payment models and security and encryption techniques.

The architecture of mobile commerce is drawn below:

Information Dissemination Mobile Commerce Mobile device compatible

and distribution Application publishing language. Eg:
(middleware) protocol. WML, Voice, XML
WAP Business Service
iMode Infrastructure, legal
framework and Protocol/
Network standards.

Mobile Payment Model

Security and Encryption

Techniques

Wireless Network infrastructure

Wireless Network Infrastructure

For successful m-commerce there must be strong wireless network infrastructure. Wireless
networks have evolved from voice-only radio-based analog transmission to digital voice
and data transmission.
Security and Encryption

Mobile commerce can be made secure by using different kinds of security protocols.
Encryption and decryption take place algorithm can be adapted for extra security. SSL and
TLS security measures can be adapted.

Mobile Payment Models

Online payment is a fundamental necessity of mobile commerce. Some examples of

mobile payment are mobile wallet, debit card, credit card, paypal, esewa, khalti. There are
three main mobile payment model:

a) Acquirer Centric model

b) Issuer Centric model
c) Mobile Network Operator

Mobile Commerce Application

It is the rise of the high speed internet. There are different opportunities to generate
revenue with the help of different mobile applications. These apps can be uploaded to the
app store or play store by a mobile developer and the user can download the apps from
the apps the developer can earn money through advertisement or mobile payment. For
Example: daraz.

Unit-6: Network Security

E-Commerce Security Issues

1. Lack of trust in privacy and eCommerce security

Businesses that run eCommerce operations experience several security risks, such as
Counterfeit sites

Hackers can easily create fake versions of legitimate websites without incurring any costs.
Therefore, the affected company may suffer severe damage to its reputations and
valuations.

Malicious alterations to websites

Some fraudsters change the content of a website. Their goal is usually to either divert
traffic to a competing website or destroy the affected company’s reputation.

Theft of clients data

The eCommerce industry is full of cases where criminals have stolen the information about
inventory data, personal information of customers, such as addresses and credit card
details.

Damages to networks of computers

Attackers may damage a company’s online store using worm or virus attacks.

Denial of service

Some hackers prevent legit users from using the online store, causing a reduction in its
functioning.

Fraudulent access to sensitive data

Attackers can get intellectual property and steal, destroy, or change it to suit their
malicious goals.

2. Malware, viruses, and online frauds

These issues cause losses in finances, market shares, and reputations. Additionally, the
clients may open criminal charges against the company. Hackers can use worms, viruses,
Trojan horses, and other malicious programs to infect computers and computers in many
different ways. Worms and viruses invade the systems, multiply, and spread. Some
hackers may hide Trojan horses in fake software, and start infections once the users
download the software. These fraudulent programs may:

● hijack the systems of computers

● erase all data
● block data access
● forward malicious links to clients and other computers in the network.

3. Uncertainty and complexity in online transactions

Online buyers face uncertainty and complexity during critical transaction activities. Such
activities include payment, dispute resolution, and delivery. During those points, they are
likely to fall into the hands of fraudsters.

Businesses have improved their transparency levels, such as clearly stating the point of
contact when a problem occurs. However, such measures often fail to disclose fully the
collection and usage of personal data.

Risks Involved in e-Commerce

ONLINE SECURITY BREACHES

E-commerce businesses are constantly exposed to cyber security threats. Some risks that
online businesses face are phishing attacks, website hacking, malware, credit card fraud,
ransomware attacks and unprotected web services.

PRIVACY ISSUES

E-commerce businesses have to collect information about visitors and existing customers.
This information can help to identify potential customers, provide great customer service,
ensure personalized communication, and process payment transactions. However, to
avoid legal problems, the information must be collected without interfering with rights of
privacy.

INTELLECTUAL PROPERTY INFRINGEMENT

Violation of intellectual property is a common threat that can result in huge losses.
Businesses in the e-commerce industry face the risk of copyright, patent and trademark
infringement. Even when you have adequately protected your intellectual property, you
may end up violating someone else’s intellectual property. This could cost your online
business a fortune.

PRODUCT LIABILITY ISSUES

E-commerce businesses are concerned about product liability issues. The products or
services you sell online can be defective, result in some type of injury or cause damage to
property. This could be due to design flaws, manufacturing defects or marketing defects.
When this happens, your online business may face third party claims.

PROFESSIONAL LIABILITY CONCERNS

Even with through record keeping and clear communication, mistakes can happen when
shipping items to customers. Because purchases are made online, e-commerce
businesses typically make promises and enter into contracts before the actual transaction
takes place. However, there are times when you will run out of stock, orders will be
misplaced, the wrong items are sent and orders will get lost in transit. This could be due to
errors or warehouse and logistics challenges.

HUMAN ERROR

Apart from exposing you to professional liability, human error can also cause data loss. In
fact, about 95 percent of cyber security breaches are caused by human error. An innocent
mistake such as deleting a file, poor password hygiene, poor access control, or email
misdelivery can present serious cyber risks.

To minimize the risk of losing important customer, employee, and business data, invest in a
reliable backup and recovery solution.

PLATFORM DOWNTIME

Even a few minutes of system downtime can be disastrous for an online business. Outages
may occur due to coding errors, a surge in traffic, problems with online payment systems,
or scheduled downtime to update servers and security. Platform downtime will lead to
business interruption and loss of productivity. When the outages are frequent and lengthy,
they will damage your reputation and impact your bottom line.

NON-COMPLIANCE

E-commerce businesses must adhere to certain regulations relating to data privacy and
protection. Business owners who operate without regard to the applicable laws run the risk
of paying hefty financial penalties, serving time in prison or having their company shut
down altogether. With this strict regulatory environment, non-compliance could jeopardize
your business continuity.

Whether you sell locally or internationally, you should understand your obligations under
these laws. This way, you will take statutory compliance seriously, something that will help
you to protect your business, employees, and customers.

PROPERTY AND INVENTORY DAMAGE

Disasters happen, and they can take many different forms. Whether natural or man-made,
these unforeseen events can have adverse effects on your online business. One of the
potential risks that e-commerce businesses face is loss of premises and inventory damage
due to disaster. Inventory can be damaged while in the warehouse or when in transit.

To ensure your online business survives and carries on after such disasters, you should
have the right protection in place. Having adequate insurance coverage will minimize your
financial loss and help you get your business back up and running.
Concept of network

A network can be defined as a group of computers and other devices connected in some
ways so as to be able to exchange data. Each of the devices on the network can be
thought of as a node. Each node has a unique address.

Addresses are numeric quantities that are easy for computers to work with, but not for
humans to remember. Example: 204.160.241.98

Some networks also provide names that humans can more easily remember than
numbers.

Computer Security

Computer security is also called cybersecurity. The protection of computer systems and
information from harm, theft, and unauthorized use. Computer hardware is typically
protected by the same means used to protect other valuable or sensitive
equipment—namely, serial numbers, doors and locks, and alarms. The protection of
information and system access, on the other hand, is achieved through other tactics, some
of them quite complex.

Data and message security

Electronic data security is important at a time when people are considering banking and
other financial transaction by PCs. One major threat to data security is unauthorized
network monitoring also called packet sniffing.

Messaging Security is a program that provides protection for companies messaging

infrastructure. It protects all the personal messages of the company which are related to
company’s vision and mission.

Types of Message

1. Message Confidentiality
2. Message and System Integrity
3. Message Authentication

Firewall

A Firewall is a network security device that monitors and filters incoming and outgoing
network traffic based on an organization’s previously established security policies. At its
most basic, a firewall is essentially the barrier that sits between a private internal network
and the public Internet. A firewall’s main purpose is to allow non-threatening traffic in and
to keep dangerous traffic out.

Functions Of Firewall

A firewall acts as a barrier or gatekeeper between your computer and another network like
the internet. It works like a traffic controller, monitoring and filtering traffic that wants to
gain access to your operating system.

Types of Firewalls

Packet filtering

A small amount of data is analyzed and distributed according to the filter’s standards.

Proxy service

Network security system that protects while filtering messages at the application layer.

Stateful inspection

Dynamic packet filtering that monitors active connections to determine which network
packets to allow through the Firewall.

Next-Generation Firewall (NGFW)

Deep packet inspection Firewall with an application-level inspection.

Cryptography

Cryptography is the method of protecting information and communication through the use
of codes. So that only those for whom the information is intended can read and process. A
plain text or message is converted in an unreadable text known as ciphertext using a
mathematical algorithm this is known as encryption. At the receiver, the ciphertext is
converted back to the original message which is known as decryption therefore
cryptography is the combination of encryption and decryption.

Features Of Cryptography
Confidentiality:

Information can only be accessed by the person for whom it is intended and no other
person except him can access it.

Integrity:

Information cannot be modified in storage or transition between sender and intended

receiver without any addition to information being detected.

Non-repudiation:

The creator/sender of information cannot deny his or her intention to send information at a
later stage.

Authentication:

The identities of sender and receiver are confirmed. As well as destination/origin of the
information is confirmed.

Types of cryptography

Symmetric Key Cryptography:

It is an encryption system where the sender and receiver of a message use a single
common key to encrypt and decrypt messages. Symmetric Key Systems are faster and
simpler but the problem is that sender and receiver have to somehow exchange keys in a
secure manner. The most popular symmetric-key cryptography system is Data Encryption
System(DES).

Hash Functions:

There is no usage of any key in this algorithm. A hash value with a fixed length is
calculated as per the plain text which makes it impossible for the contents of plain text to
be recovered. Many operating systems use hash functions to encrypt passwords.

Asymmetric Key Cryptography:

Under this system, a pair of keys is used to encrypt and decrypt information. A public key
is used for encryption and a private key is used for decryption. The public key and Private
Key are different. Even if the public key is known by everyone the intended receiver can
only decode it because he alone knows the private key.
Public Key in Cryptography

In cryptography, a public key is a large numerical value that is used to encrypt data. The
key can be generated by a software program, but more often, it is provided by a trusted,
designated authority and made available to everyone through a publicly accessible
repository or directory.

Private Key in Cryptography

A private key, also known as a secret key, is a variable in cryptography that is used with an
algorithm to encrypt and decrypt data. Secret keys should only be shared with the key's
generator or parties authorized to decrypt the data. Private keys play an important role in
symmetric cryptography, asymmetric cryptography, and cryptocurrencies.

A private key is typically a long, randomly, or pseudo-randomly generated sequence of bits

that cannot be easily guessed. The complexity and length of the private key determine how
easily an attacker can execute a brute-force attack, where they try out different keys until
the right one is found.

Antivirus

Antivirus is a kind of software used to prevent, scan, detect and delete viruses from a
computer. Once installed, most antivirus software runs automatically in the background to
provide real-time protection against virus attacks.

Comprehensive virus protection programs help protect your files and hardware from
malware such as worms, Trojan horses, and spyware, and may also offer additional
protection such as customizable firewalls and website blocking.

Digital Signature

A digital signature is a unique cryptographic code that is attached to the documents,

email, software, and digital certificate. It can be used to prove ownership of the certificate.

When a digital signed file is present it can use key pair linked with that signature to verify it.
There is also a hash function. The hash function performs while signing that serves as a
checksum. The digital signature is that. Let clients know that the entity is trusted and that
what is signed is authentic.
Digital Certificate

A digital certificate is a cryptographic file that binds key pairs to validate an entity. When
digital is issued, it is signed by a certificate authority (CA) that is issuing it. When the client
is digitally certified by a certificate authority, this means that the client can be trusted. SSL
Certificate is an example of a digital certificate.

Certificate Authority

A certificate authority (CA), also sometimes referred to as a certification authority, is a

company or organization that acts to validate the identities of entities (such as websites,
email addresses, companies, or individual persons) and bind them to cryptographic keys
through the issuance of electronic documents known as digital certificates.

Third party authentication

Third-party authentication is based on the fact that virtually everyone on the Internet has
an account on at least one top social networking site, such as Google, Facebook, Twitter
or Linkedln. All these platforms provide authentication and identification your users by
using their media accounts.

Third-party authentication is often called federated authentication or delegated

authentication. These terms are mostly interchangeable, although federated authentication
is usually associated with the Security Assertion Markup Language (SAML) and OpenID,
and delegated authentication is often associated with OAuth.

Secure Socket Layer (SSL)

SSL stands for Secure Sockets Layer. It is the standard technology for keeping an internet
connection secure and safeguarding any sensitive data that is being sent between two
systems, preventing criminals from reading and modifying any information transferred,
including potential personal details. The two systems can be a server and a client (for
example, a shopping website and browser) or server to server (for example, an application
with personal identifiable information or with payroll information).

VPN (Virtual Private Network)

A virtual private network (VPN) extends a private network across a public network and
enables users to send and receive data across shared or public networks as if their
computing devices were directly connected to the private network. The benefits of a VPN
include increases in functionality, security, and management of the private network. It
provides access to resources that are inaccessible on the public network and is typically
used for remote workers. Encryption is common, although not an inherent part of a VPN
connection.

A VPN is created by establishing a virtual point-to-point connection through the use of

dedicated circuits or with tunneling protocols over existing networks. A VPN available from
the public Internet can provide some of the benefits of a wide area network (WAN). From a
user perspective, the resources available within the private network can be accessed
remotely.

Unit-7: Electronic payment system (EPS)

Online banking

Online banking allows a user to conduct financial transactions via the Internet. Online
banking is also known as Internet banking or web banking.

Online banking offers customers almost every service traditionally available through a local
branch including deposits, transfers, and online bill payments. Virtually every banking
institution has some form of online banking, available both on desktop versions and
through mobile apps.

Online banking requires a computer or other device, an Internet connection, and a bank or
debit card. In order to access the service, clients need to register for their bank's online
banking service. In order to register, they need to create a password. Once that's done,
they can use the service to do all their banking.

Advantage:

1. Online banking is fast and efficient.

2. Consumers can also monitor accounts regularly allowing them to keep their account
safe.
3. The online banking service is 24hrs.

EPS

An electronic payment system is a way of making financial transactions or paying for

goods and services through electronic medium without the use of cheque or cash. It is
also known as an online payment system / E-payment system.
The EPS has grown increasingly over the last year due to the growing spread of internet
based banking and shopping.

Types of EPS

Credit Payment System

a) Credit Card:

A form of electronic payment system which requires the use of a credit card issued
by a financial institution to the card without the use of cash.

b) E-wallet:

It is the form of a prepaid account that stores users financial information, like debit
and credit card information to make an online transaction easier.

c) Smart Card:

A plastic card with a microprocessor that can be loaded with funds to make
transactions. They are also named as chip card.

Cash Payment System

a) Direct debit:
A financial transaction in which the account holder instructs the bank to collect a
specific amount of money from his account electronically to pay for goods or
services.
b) E-cheque:
It is a digital version of an old paper check. It is an electronic transfer of money from
a bank account, usually a checking account without the use of a paper cheque.
E-cheque uses digital signatures.
c) E-cash:
E-cash is a form of electronic payment system where a certain amount of money is
stored in a client device and is available for online transactions.

Security Requirement of EPS

1. Authentication
It is necessary to verify the consumer's identity before the payment is authorized.
2. Encryption
Encryption is a process of making messages unreadable except by those who has
 authorized decryption keys. Different mathematical algorithms are used for
encryption and decryption of messages.
3. Integrity
Ensuring that information is not intentionally or unintentionally changed or destroyed
during transmission.
4. Non-repudiation
Protection against customer's denying the order placed and against merchant's
denying the payment made.
5. Availability and reliability
The network and services like cellular network, internet provider should be available
for the consumers and merchants. These services must be reliable in order to make
electronic transactions easy.
6. Privacy
A consumer's information should be confidential when he or she visits ecommerce
websites. The account information of the customer should be made private and only
available to that customer.

Secure electronic transaction (SET)

Secure electronic transaction or SET is a system which ensures security and integrity of
electronic transactions. It uses different encryption and hashing techniques to secure
payments over the internet done through credit cards. SET protocol was supported by
different payment processors like VISA, Mastercard etc.

SET protocol restricts revealing of credit card details to merchants which keeps hackers
and thieves out. SET protocol include standard digital certificate like X.509

SSL SET

SSL stands for secure socket layer. SET stands for secure electronic
transaction.

SSL is a bit simpler than the SET. SET is a complex mechanism.

SSL is a protocol for general purpose SET is tailored to the credit card payment.
secure message exchange.

SSL protocol can use a digital certificate SET protocol hides the customer credit
but there is no payment gateway. card information from the merchant and
hides the info to the bank to protect
privacy.
Payment System

A payment system is an electronic payment technology that contains several procedures

including a payment processor which can be divided into two parts.

1. Front End processors:

They have connections to various card associations and supply the merchant bank.
2. Backend processors:
These processors accept settlement from frontend processors.

Payment Gateway

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

service providers that authorizes credit card or direct payment processing for e-commerce.
A payment gateway facilitates payment transactions by the transfer of information between
a payment transaction by the transfer of information between a payment protocol like
chrome, websites and front end processor for acquiring a bank.

Payment Processing

A payment processor, or payment facilitator acts as a mediator between a merchant and a

financial institution, authorizing transactions and facilitating the transfer of funds. Some
options for providers include Shopify, Square, Paysafe.

Payment Processing Network

For the payment system, it is important to handle the transaction between a merchant and
the customer. There can be a series of interconnections to the payment processing
network. The payment network sets the interchanging fees charred during payment
processing. Within the electronic that the transactions are processed correctly including
SET guidelines and qualifications requirements for member institutions.

Digital wallet

A digital wallet (or e-wallet) is a software-based system that securely stores users payment
information and passwords for numerous payment methods and websites. By using a
digital wallet, users can complete purchases easily and quickly with near-field
communications technology. They can also create stronger passwords without worrying
about whether they will be able to remember them later.
Digital wallets can be used in conjunction with mobile payment systems, which allow
customers to pay for purchases with their smartphones. A digital wallet can also be used
to store loyalty card information and digital coupons.

Online banking facilities of banks (Nepali banks)

Here are some facilities provided by the banks in nepal:

1. Money Transactions (Send / Receive)

2. Bill Payment
3. Online Ticketing
4. Bank Statement
5. Amount Inquiry

Unit-8: Legal and Ethical Issues

Issues related to e-Commerce

Abandoned carts

The e-commerce marketplace affords even the smallest retailer a global presence, yet the
vast choice and blurring between online and offline experiences makes the buying process
for the customer much more complicated. As it is essentially your sales funnel,
understanding the exact process that a customer goes through when they’re researching,
deciding, and purchasing is key to knowing which buttons you may need to push along the
way.

Lack of repeat purchases

In the pursuit of growth, encouraging previous shoppers to buy again should be a no

brainer, but many get it wrong. Was their purchase a necessity? Did they have a good
experience? How do you know?

Poorly designed images and website

Looks mean everything in the world of e-commerce. According to a survey by

Marketingsignals.com, 61% of respondents said insufficient or poor-quality product
imagery puts them off making a purchase.

Not communicating with customers

From weather patterns affecting package delivery times to suppliers falling behind in their
orders, things don’t always run to plan.

In the era of instant gratification, timely communication of good and bad news is critical.
Autopilot allows you to easily let your customers know of any changes to their orders via
follow-up emails and SMS reminders.

Legal issues

Intellectual Properties

Intellectual property is the creations of the mind such as inventions, literary, and artistic
works, symbols, images, designs, used in e-commerce. This can be removed by copyright,
trademark and patient.

Copyright

An exclusive grant from the government that allows the owner to reproduce partial or
whole part to distribute performance or display it to the public.

Some of the copyrights are software, music, videos, and other similar types of digital
resources.

Trademark

Registered symbols used by the businessman are called Trademarks. It is approved by the
government and no-one other can use it.

Patent

Legal documents that grant the holder for the use of ideas or technologies.

Censorship

It is an attempt to control the material on the web. Censorship refers to the government's
attempt to control in one way to another.

Ethical issues

Web tracking

Every time someone visits the web, the website system retains some trails of the users that
can be referred to later, these trails are normal call logs. These logs contain all the records
pertaining to what the users perform in the site. Logs as records mean, they can be
retrieved or saved for later use.
Analysis of log files means turning log data into application service or installing software
that can pluck relevant information from files in-house. Companies track individual’s
movements through tracking software and cookie analysis. Programs such as cookies
raise a batch of privacy concerns. The tracking history is stored on your PC’s hard disk,
and any time you revisit a website, the computer knows it.

Online Privacy

It is necessary to protect the identity of a buyer who uses the Electronic Payment System.
A privacy issue related to the employees of the company is tracking. Monitoring systems
are installed in many companies to monitor e-mail and other web activities in order to
identify employees who extensively use business hours for non-business activities. The
e-commerce activities performed by a buyer can be tracked by organizations. These
activities of monitoring customers raise ethical issues on how secure and anonymous
information are being handled by the e-commerce providers.

Web Spoofing

Web spoofing is an electronic deception related to the Internet. It occurs when the attacker
sets up a fake website which is almost totally the same as the original website in order to
lure consumers to give their credit card number or other personal information. For
example, the attacker setup a site called www.jumiaa.com using the addition of later ‘a’ at
the end, which many users sometimes type by mistake. Users might find themselves in a
situation that they do not notice they are using a bogus web-site and give their credit card
details or other information.

Cybersquatting

Cybersquatting is an activity which a person or firm register, purchase and uses the
existing domain name belong to the well-known organization for the purpose of infringing
its trademarks. This type of person or firm, called cybersquatters, usually infringed the
trademarks to extort the payment from the original trademark’s owner. The extortion of
payment occur when they offers the prices far greater than they had purchased the
organization’s domain name upon. Some cyber-squatters put up offensive remarks about
the person or company which the domain is meant to represent in an effort to encourage
the subject to re-buy their domain from them.
Privacy Invasion

The privacy invasion occurs when the personal details belonging to consumers are
exposed to the unauthorized party. These can be seen in the following ways.

The personal information of consumers being transmitted may be intercepted by anyone

other than the person whom it is intended for. Protecting the privacy of communication is a
great challenge, due to the very nature of the online medium, an open network of digital
telecommunications. It is technically and economically impossible to patch all the holes
through which unauthorized intruders may gain access.

Email Spamming & phishing

E-mail spamming involved unsolicited commercial e-mail (UCE) sent or broadcast

unwanted advertisement or correspondence over the Internet. The use of email spammers
is meant to lure consumers to enter their personal information on a fake website using
e-mail, forged to look like it is from an authorized organization such as a bank. The content
of e-mail often directs the consumers to the fake website in order to lure them to fill in their
personal information such as credit card or bank account’s details. This technique is called
phishing. And these illegal processes easily compromise the user's right and expose them
to danger.

Taxation

The rapid growth of e-commerce, especially the sale of goods and services over the
internet, has fuelled a debate about the taxation regimes to be used. The shift from a
physically oriented commercial environment to a knowledge-based electronic environment
poses serious and substantial issues in relation to taxation and taxation regimes. Tax
administrations throughout the world face the formidable task of protecting their revenue
base without hindering either the development of new technologies or the involvement of
the business community in the evolving and growing e-market place. Concerns of
governments center on the impact of e-commerce on the state and local revenue.
Whereas states can impose a tax on residents' purchases from out-of-state vendors, they
cannot impose an obligation on those vendors to collect the tax unless the vendor has a
substantial presence, or nexus, in the state. These problems will be greater for developing
countries. The shrinking of the tax base will have a disproportionate effect and further
jeopardize the already fragile economy of the developing world.
 Unit-9: Cyber law

Concept of Cyber Law

Modem says Internet technologies are vulnerable. The attackers are easily influenced by
the system in order to protect the Internet from these possibilities cyber law is made.

Cyber law is the area of law that deals with the Internet relationship to technological and
electronic elements including computers, software, hardware and information systems. It is
also known as cyber law or Internet law.

Cyber law prevents or reduces large scale damage from cyber criminal activities by
protecting information action, privacy, communication , intellectual properties, freedom of
speech and so on related to the use of the Internet , websites, email, software , hardware
etc. The increase in internet traffic has yet to have a higher proportion of legal issues world
wide . Cyber law also varies by jurisdiction and country. Enforcement is challenging and
restitution ranges from fines to imprisonment.

Some of the emerging trends of cyber law are listed below::

1. Strict regulatory rules are put in place by many countries to prevent unauthorized
access to the network.
2. The mobile companies we call upon the governments of the world to reinforce cyber
legal systems and administrations to regulate the emerging mobile threats and
crimes.
3. Cloud computing is a major drawing trend with more advancement of technologies
and volumes of data will flow into the cloud which is not free from cyber law.

Aims of cyber law

1. To promote growth of jurisprudence of cyber, security and law.

2. To do various research base activities which examine the emerging cutting-edge
legal trends concerning the growth of cyber security law.
3. To create effective cyber crime laws.
4. To generate better awareness to battle the latest kinds of cyber crimes impacting all
individuals or investors in digital and mobile networks.
 5. Due to the implication of cyber law, there is a need to train the government
authorities like police and cyber crime.
6. To emphasize the users of the Internet in any nation through a secure and legal
environment.
7. To prevent assistance to law enforcement agencies and contribute to the fight
against cyber crimes in the country.

Salient features of Cyber law

Cyber law is important because it touches almost all the asPects of transactions involving
the internet, www, cyberspace etc. Every action and reaction in cyberspace have some
legal and cyber legal perspectives. Cyber law encompasses laws relating to compass
cyber crimes, electronic and digital signatures, intellectual properties/ copyright and
trademark, data protection and privacy.

As an example. The government of Nepal has approved the Electronic Transaction

Act-2006 on 4th December-2006. This law doesn't only legalize all sorts of electronic
transactions and digital signatures but also has computer based mechanisms and
penalizes cyber crimes . Apart from the Act, there are the terms of controller of certification
authority which are further divided into 12-sections and 80-clauses. According to cyber
law of Nepal,if any individual is found in cyber crimes like hacking the intellectual
properties of others, he/she will be punished for minimums of 6-months to 3-years* of
prison and has to pay minimum pay up to Rs.50,000 to 3-Lakhs.

Unit-10: Introduction to Entrepreneurship

Entrepreneur

An Entrepreneur is one who creates new business in the face of risk and uncertainty for the
purpose of achieving profit and growth by identifying significant opportunities and
assembling the necessary resources to capitalize them. Although many people form great
business ideas must never act on their ideas but entrepreneurs do.

Entrepreneurship

Entrepreneurship is traditionally defined as the process of designing , launching, and

running a new business offering a product process or service for sale or hire. PC It also
has been defined as "the capacity and willingness to develop, organize and manage
business ventures along with any of its risks in order to make a profit".

Entrepreneurship typically operates within the entrepreneur ecosystem which upon

includes government programs and services that promote entrepreneurship and support
entrepreneur and small business associations entrepreneurial drive is the inbuilt
encouragement. Some people possess the ability to make some things happen. It is the
energy that possesses one forward as founder and force not to give-up in the case/fact of
failure ultimately leading to success.

Entrepreneurship Development

Entrepreneurship Development also known as Entrepreneurship Development Program

(EDP). The EDP is a program meant to develop entrepreneurial abilities among tech
people. In other word, ENTREPRENEURSHIP DEVELOPMENT refers to tech development
and polishing of Entrepreneurial skills into a person needed to establish and successfully
run his / her enterprises .

Thus the concept of ENTREPRENEURSHIP DEVELOPMENT involves equipping a person

with the required skills and knowledge needed for starting and running the enterprise. The
main purpose is to widen the base of ENTREPRENEURSHIP by developing achievement
motivation and ENTREPRENEURIAL skills among less privileged sections of the society.

Objectives of ENTREPRENEURSHIP DEVELOPMENT are:

● To develop and strengthen the ENTREPRENEURIAL quality that is the motivation

needed for achievement.
● To understand the process and procedure involved in setting up the start-up phase.
● Formulate proportional for the product.
● Know the pros and cons of becoming an ENTREPRENEUR.
● To prepare him/her to accept the uncertainty in running of a business and to take
decision
● according to them.
● To develop a broad vision about the business.

MANAGER

By the term "manager", we mean a person who gets things through his surrounding
subordinates with the aim of accomplishing business objectives efficiently and effectively.
The five primary concerns of a manager are planning, organizing, directing, motivating,
coordinating and controlling. The manager is in charge of the particular division unit or
department of the company. He may directly command to offer or he may direct to the
supervisors who will command the workers. Therefore, he is the one under whose
supervisors, his subordinates work and report to him/her. a manager can be top-level,
middle level and low-level.

Entrepreneur vs Entrepreneurship

Entrepreneur Entrepreneurship

An entrepreneur is a person, or a team of Entrepreneurship is an art of turning an

individuals, having a vision, which not just idea into reality, which is not only about
generates money, but can also ease the arranging the resources to give shape to
way in which things are done, by providing the idea but constantly making efforts in
such products and services that have value that direction, to earn profit in future and
to the customer, while taking all the risks, bearing all the risks or rewards.
which comes in the way.

An entrepreneur is just a person having a Entrepreneurship is the process of starting

unique and practical idea in his/her mind. and running a business of providing
creative products and services.

An entrepreneur is an innovator, as he/she Entrepreneurship is the way through which

conceives an innovative idea, which is not one can make innovations.
yet introduced by anyone else in the
market.

An entrepreneur establishes the business Entrepreneurship is all about undertaking

venture, in order to convert the idea, into a the business and bearing all the risks that
product or service, which can help many come in the way, to give a proper shape to
by easing the way work is performed the entrepreneur’s vision.
previously.

Entrepreneur vs Manager

Entrepreneur Manager

Owner: An entrepreneur is the owner of his Servant: A manager is a servant of his

own business. employer.

Profits: An entrepreneur earns profits from Salary: A manager earns a salary which is
his business which is uncertain and generally certain and limited.
unlimited.

Full Risk Bearing: An entrepreneur is a Less or No Risk Bearing: A manager

person who has to take high risks for takes less or no risk while performing his
starting and running a venture. job.

All Functions: An entrepreneur has to look Selective Functions: A manager looks

 after all the functions of his organization. after selective functions of an organization.

Innovator: An entrepreneur is always an Executor: A manager is simply an executor

innovator, in the lookout for new products who is responsible for executing the
and services. decisions of the owner and entrepreneur.

Entrepreneurial Culture

Virtually anyone has potential to become an entrepreneur. So an entrepreneurial culture is

necessary to motivate the people towards their achievements. For many businesses, the
reason behind their success is to institutionalize the values of its founders. It helps the
entrepreneur to understand overall strategies of the business and helps to grow
organizations established by the entrepreneur. Building a culture that encourages
autonomy, risk-taking and entrepreneurial behavior is challenging for the companies that
want to out-think the competition, an entrepreneurial culture is not optional, it is absolutely
necessary.

Aspects of entrepreneurial culture:

1. Authenticity: An entrepreneur should be sincere and should be enthusiastic about

entrepreneurial strategies and actions perceived by the business. An entrepreneur
culture is based on the idea that each individual can be of powerful force for change
in the organization.
2. Commitment of business
3. Continuous effort

Characteristics of entrepreneurs:

1. Attitude to risk and failure.

2. Opportunistic minded: It means not any opportunities should be lost by them.
3. Persistent: they should fully hope to do something.
4. Passionate and Focused: They should be focused on any passion or aim.
5. Seek out niches: Always curious to find out any gap opportunities in the market and
just grasp them.
6. Living what you believe is also one of the characteristics of the entrepreneur.
7. Tolerance of risk.
 Unit-11: Online marketing

Definition

Online marketing is a set of tools and methodologies used for promoting products and
services through the internet. Online marketing includes a wider range of marketing
elements than traditional business marketing due to the extra channels and marketing
mechanisms available on the internet.

Concept of online marketing

● Growth in potential
● Reduced expenses
● Elegant communications
● Better control
● Improved customer service
● Competitive advantage

Advantages of online marketing

1. Low Costs
Large audiences are reachable at a fraction of traditional advertising budgets,
allowing businesses to create appealing consumer ads. Many advertising platforms
also allow for scalable ads with different levels of reach that are proportioned to the
advertising budget. Rather than committing a large amount of money to advertising,
smaller companies can spend a small amount and still increase their reach.
2. Flexibility and convenience
Consumers may research and purchase products and services at their leisure.
Business blogs can be used to let consumers and prospects conduct their own
research on the business's products as well as provide their feedback and reviews.
3. Analytics
Efficient statistical results are facilitated without extra costs. Many advertising tools
include their own analytics platforms where all data can be neatly organized and
observed. This facilitates business intelligence efforts and data-driven decision
making.
4. Multiple options
Advertising tools include pay-per-click advertising, email marketing, interstitial ads
 and banners, social media advertising, and local search integration (like Google
Maps). Digital marketing companies usually offer their services across various online
advertising channels by tuning their offer to the individual client’s needs.
5. Demographic targeting
Consumers can be demographically targeted much more effectively in an online
rather than an offline process. Coupled with the increased analytics potential
explained above, organizations can improve their targeting over time, have a clearer
understanding of their customer base, and create specific offers that are shown only
to certain demographics.

Online marketing Vs Offline marketing

Online Marketing Offline Marketing

Online marketing is generally focused on Offline marketing is generally focused on

content. products.

Online marketing includes third parties like Offline marketing includes mass media,
media, web content, search email, social phone center, telephone.
media.

Online marketing communicates Offline marketing communicates with

customers with emails, chat, and social customers with their mobile number and
media . staff.

Target audience met at one place. Target audience is scattered.

It is cost effective. It has a high marketing cost.

It directly reaches out to the professionals It does not directly reach out to the
of the industry and market. professionals due to some barriers.

Prospective buyers cannot be visible. It is directly visible to their prospective

buyer.

Less people to manage. Large people to manage.

Tools for online marketing

1. Email marketing
2. Social media marketing
3. Search engine optimization (SEO)
4. Display advertising like LinkedIn ads or Google Display Network
 5. Search engine marketing (SEM)
6. Online events & webinars
7. A/B testing & website optimization
8. Content marketing
9. Video marketing
10. Marketing analytics like Google Analytics
11. Marketing automation
12. Customer relationship management (CRM)
13. Content management system (CMS)
14. Pay-per-click (PPC) advertising like Google Ads
15. Affiliate marketing

Tools for offline marketing

1. Business Cards
Business cards coincide with personal interaction that company leaders and
employees have with people in the community. Whenever someone at your
business is out in public and the topic of the company comes up, he should take
the opportunity to pass on a business card that prominently features your web
address. This is an easy tool someone can stick in a wallet or card file and refer to
at any point.
2. Traditional Media
You can use traditional media to promote your business and website. Companies
often close television commercials with the "www" address to direct people for
more information or products. Print ads in newspapers and magazines are also
great visual mechanisms to put your web address in front of readers. In radio
commercials, commonly used by smaller companies, you can repeat your web
address strategically throughout a commercial.
3. Promotional Items
Giveaways are a great offline marketing tool that are as useful for a web-based
business as they are for a brick-and-mortar company. You can give out low-cost
items such as pens, pencils, notepads, calendars, stress balls and t-shirts with your
website emboldened on them. This not only gives you exposure, but if the recipient
reuses the item regularly, he gets ongoing recall of your brand and domain.
 4. Direct Mail
You can send direct mail pieces to prospects and customers to go along with any
email marketing you use online. Direct mail has a relatively low response rate, but if
you include magnets for the fridge or other little trinkets with your website, you may
get more exposure and business. If someone stalks your magnet on the fridge, she
may catch your site anytime she walks by. This can lead to a curious visit to your
site or a customer opportunity when a need arises related to what you sell.

Issues with online marketing

1. Social Media Management

Chances are you do not have your social media strategy figured out. Social media is
still so young, that businesses are much more likely to have failed on social media
than succeeded. This includes brands of all sizes - from the mom and pop shops to
global brands with billions of dollars and seemingly unlimited manpower.

2. Getting Value From SEO

We’ve written repeatedly on the challenges facing SEO firms today. From the
changing algorithms to the lack of keyword data, it’s become harder to get results
and even harder to see results. Not a fun combination. The biggest losers were the
companies that relied on these search engine rankings for the majority of their
online revenue. Once the rankings disappeared, the revenue stopped.
3. Multi-Device Usage
As a data-driven agency, one of our biggest challenges is how to track the visitor
experience across multiple devices over the course of the consumer buying cycle.
4. Optimizing The Mobile Experience
For years you’ve been hearing about the mobile revolution. I’ve watched client’s
mobile traffic go from 5% to 30% in the last couple years. With this shift in traffic
comes drops in conversion rates, less time spent on site, and higher bounce rates.
5. Competing With The Noise
As businesses continue to build out their online presence, consumers are provided
with more and more choices. The streets have become crowded and everyone
wants a piece of the action. Staying on the front end of the curve and rising above
the noise is harder than ever. If you are selling the same thing at the same price to
the same people, how can you expect to win more market share and grow your
business?