E- COMMERCEE- COMMERCE Unit 3 Unit 3

Akhil Kaushik

Asstt. Prof. CSE Deptt., TIT&S Bhiwani

On-Line Commerce On-Line Commerce Options: Company Options: Company

ProfilesProfilesThe main purpose for making a good “company profile” is to approach your potential customer with your company’s strength in terms of capacity, quality, financial leverage, and experience and to show your ability to start the business and to develop it in a trustworthy way. The idea behind it is to convince your potential customer to rely on you by giving him relevant information in a stage where he has to evaluate your offer. Until that time he had only met with you, seen your brochure or found your address

He is now looking at your quotation or offers and there may still be doubts in his mind. The “Company Profile” increases your value compared to your competitors by influencing positively the decision of your potential customer to start business with you. The impression a potential customer has about your organization is strongly influenced by the way you have fulfilled his expectations. Not fulfilling the expectations causes disappointment. Fulfilling the expectations however is not enough. You will only score when you exceed themThe content of your company profile should include or contain introduction, company data,structure and infrastructure. Most importantly you need to clearly and professionally present your products, capacity, equipment, quality policy, experience, financial statements, short and long term plans and good references. It is also professional to present your company using a mission statement

As your “company profile” represents your company, it is absolutely essential to prepare it professionally. This includes a good layout, no typing errors, laser printing on quality paper and proper coloring and structuring. Of course it is entirely up to your imagination and creativity to add or delete chapters or subjects and give it its final form and outlook. However including the contents we mentioned above is crucial. The size of your company profile should be 12 to a maximum of 15 pages, think about the time that your potential customer is willing to give to read your profile. Follow the AIDA structure step by step. First catch the Attention, then generate Interest and create Desire to get him into Action. Be informative and business like.

The content of a The content of a company profile company profile

should be as follows:should be as follows:Company Name: The company name and its caption or sub-heading should be stated clearly in the company profile.

Description of the Company: It contains the introduction of the organization. It may explain the current ranking of the company (if any), important contributions and major points.

Mission/ Vision: The vision and mission of the company should be properly defined in the company profile. Vision represents the long-term aim of the organization and mission represents the technique for achieving it.

History: This part contains the history of the company like when company started, the idea behind innovation, earlier products and chronological order of added products & services.Management (Key Members): The core members of managerial committee, the board of directors, & other management team for carrying out day-to-day activities.·Employees Number & Skills: The company may list total no. of employees category wise and their respective skills.·Head Office & Branch Locations: If the organization has branch offices in exception to the head office, the address of both are listed here.·Registered Certifications: This part states about the registered certifications that the Aorganization has received for their any products or services.

· Major Products & Services: All the major products and services of the company should be listed in company profile. It should be elaborated enough to explain the company’s business holding and farsightedness.

·Specialization: If the company does a better job in any specialized area, then it must be mentioned in the company profile

·Append Images/Photographs: Textual data may make the company profile boring. Adding images, flash presentations, etc. help making the company profile more attractive.

·Turnover & other Financial Info: The company may want to display its market’s share and annual turnover

· Awards: If the company has won excellence awards in any area, then it must be displayed in the company profile

· Clientele: The major clients being served by the organization displays its strength and dominance in the market.

· Success Stories: These are special stories that are used to inspire the clients about the company.

· References: Some references to established organizations may be an added advantage in company profile.

· Website URL: If the company profile is a paper-based document, then it must contain the website URL of the company.

First Virtual First Virtual Internet Payment Internet Payment

SystemSystemFirst Virtual was one of the first Internet payment systems to be available to the public.

First Virtual Holdings was a company formed in early 1994 to facilitate Internet commerce.

The first product offering from First Virtual was an Internet payment system, which was developed quietly and publicly announced as a fully operational open Internet service on October 15, 1994.

First Virtual provided most of the features of both eBay and PayPal before those companies existed. Key people behind First Virtual were Nathaniel Borenstein, Marshall Rose, Einar Stefferud, and Lee Stein.

First virtual has created a payment system, the Internet Payment System, to be used exclusively for the sale of information over the Internet, rather than for products or services. Using an automated telephone system to collect payment information about the participant, first virtual eschews cryptographic methods encryption or digital signatures preferring to rely instead on close monitoring of sales and purchases to reduce fraud. Neither buyers nor sellers are required to install new software, (though automated sale processing software is available). If you have access to Internet email, you can sell or buy over the Internet using the First Virtual System.

Assumptions Assumptions The first The first virtual Internet payment virtual Internet payment system is based on three system is based on three fundamentalfundamentalassumptions.assumptions.

·First, electronic information merchants can produce as many or few copies of any information product at no incremental cost per copy because once the information has been developed and offered for sale once, the cost of selling it again is virtually zero.

·Second, information buyers like buyers of nay other product need some way to examine

products before they buy.

·Finally, buying and selling should be simple and have as low an entry cost in time,

money and effort as possible.

The First Virtual payment system is unique in that it does not use encryption. A fundamental philosophy of their payment system is that certain information should not travel over the Internet because it is an open network. This includes credit card numbers. Instead of using credit card numbers, transactions are done using a First VirtualPIN which references the buyer's First Virtual account. These PIN numbers can be sent over the Internet because even if they are intercepted, they cannot be used to charge purchases to the buyer's account. A person's account is never charged without email verification from them accepting the charge.

• Their payment system is based on existing Internet protocols, with the backbone of the system

• designed around Internet email and the MIME (Multipurpose Internet Mail Extensions) standard.

• First Virtual uses email to communicate with a buyer to confirm charges against their account.

• Sellers use either email, Telnet or automated programs that make use of First Virtual's Simple

• MIME Exchange Protocol (SMXP) to verify accounts and initiate payment transactions.

The following steps occur during a sale when using the First Virtual payment system:

1.Merchant requests buyer's First VirtualPIN (usually through a form on a WWW page).

2. Merchant can then check whether the VirtualPIN actually belongs to a real First Virtual account that is in good standing. Merchants can verify accounts by using the following programs; Finger, Telnet, email, or the FV_API utility.

3. The merchant then initiates a payment transaction through First Virtual. This payment transaction is initiated by sending the following information either by email, Telnet, or a SMXP enabled program to First Virtual;· Buyer's First VirtualPIN· Merchant's First VirtualPIN· The amount and currency of the sale (Not everything is processed in dollars!)

4. First Virtual generates an email request to the buyer to confirm the sale. This email request contains the following sale information:· The merchant's full name· The amount of the sale· A description of the item bought

5. Buyer confirms sale by sending a YES response to back to First Virtual· A buyer can also respond NO, to state that they are unsatisfied with the item and are unwilling to pay, or FRAUD, to state that they never made the purchase and someone must have stolen their VirtualPIN.· If a buyer does not respond in a reasonable time, their account is suspended.

6. First Virtual sends a transaction result message to the merchant, indicating whether the buyer accepted the charges.

7. After a waiting period, (91 days after buyer's credit card has been charged), the amount of the sale minus transaction fees are directly deposited into the merchant's account

The First Virtual payment system has several advantages and disadvantages over other payment systems used on the Internet.

Advantages:· Neither buyer or seller needs to install any software in order to use the system.· Buyers are virtually 100 % protected from fraud. No charges are processed against their account without their confirmation.· Purchases are essentially anonymous. The merchant is never given the buyer's name from First Virtual.· It is extremely easy to become a merchant, or seller, under First Virtual. First Virtual does not screen merchants, nor do they require merchants to have a special business accounts established with a bank. All a person needs to sell merchandise, services, data, etc. over the Internet is an ordinary checking account.· First Virtual has very low processing fees compared to other Internet payment schemes or even straight credit card processing.

Disadvantages:· Merchant assumes all risk!· Extremely long waiting period between when a sale is made and when payment is deposited in the merchant's account.

Electronic Payment Systems

In technical terms, electronic money is an online representation, or a system of debits and credits, used to exchange value within another system, or within itself as a stand alone system. In principle this process could also be done offline. The intermediary acts as an electronic bank that converts legal tender currency into a private currency system (using tokens or digital currency) which is circulated within electronic commerce markets. A Digital Currency Payment (DCP) system does not transmit sensitive or payment information between buyers and sellers, but instead transmit a digital token that represents monetary values, that is, a digital currency.

The nature of digital currency mirrors that of paper money as a means of payment. This is similar to sending a $10 bill in the mail. As such, digital currency EPS's have the same advantages as paper currency payments, namely anonymity and acceptance of micro-payments. Depending on implementation, a possible feature of DCP's is the capability to make peer-to-peer transactions, where two individuals can exchange money without involving a third party. Examples of DCPs are Visa Cash (http://www.visa.com), and MasterCard Mondex

Digital Cash (or Electronic Cash)

Electronic money (also known as e-currency, e-money, electronic cash, electronic currency,digital money, digital cash, digital currency, cyber currency) refers to money or scrip which is only exchanged electronically. Typically, this involves the use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT), direct deposit, digital gold currency and virtual currency are all examples of electronic money. Example: Singapore has an electronic money program for its public transportation system (commuter trains, bus, etc.), based on the (FeliCa) system.

Essentially, digital cash mimics the functionality of paper cash. More technically, digital cash is a payment message bearing a digital signature which functions as a medium of exchange or store of value. Paper currency and coins represent value because they are backed by a trusted third party, the government and the banking industry. Digital coins will also represent value because they are backed by a trusted third party, usually a bank that is willing to convert digital cash to hard cash.

How does Digital Cash work?There are a number of electronic cash protocols. To a degree, all digital cash schemes operate in the following manner: A user installs a "cyber wallet" onto computer. Money can be put in the wallet by deciding how much is needed and then sending an encrypted message to the bank asking for this amount to be deducted from the user's account. The bank reads the message with private key decryption and verifies if it has been digitally signed in order to identify the user.

The bank then generates "serial numbers", encrypts the message, signs it with its digital signature and returns it. The user is now entitled to use the message (coin or token) to spend it at merchant sites. Merchants receive e-cash during a transaction and see that it has been authorized by a bank.

They then contact the bank to make sure the coins have not been spent somewhere else, and the amount is credited to the merchant's account.

Key Properties of a Key Properties of a Private Digital Cash Private Digital Cash

SystemSystem

The use of digital cash is not dependent on any physical location, and can be transferred between the physical world and virtual world of the Internet Smart card integration with computer networks have been proposed to offer this functionality. Real cash is limited by its physical form. Cash represented by streams of 0's and 1's can take advantage of its electronic nature, and permeate through networks and digital sale devices at light-speed, worldwide

· Secure - The transaction protocol must ensure that a high-level security is maintained through sophisticated encryption techniques.

· Anonymous - Anonymity assures the privacy of a transaction on multiple levels. Transactional privacy will also be at the heart of the government's attack on digital cash because it is that feature which will most likely render current legal tender irrelevant.

· Portable - The security and use of the digital cash is not dependent on any physical location. The cash can be transferred through computer networks and off the computer network into other storage devices.

· Off-line capable - The protocol between the two exchanging parties is executed off-line, meaning that neither is required to be host-connected in order to process. Availabilitymust be unrestricted

· Wide acceptability - The digital cash is well-known and accepted in a large commercial zone. Primarily a brand issue, this feature implies recognition of and trust in the issuer. With several digital cash providers, there is wide acceptability of digicash.

· User-friendly - The digital cash should be simple to use from both the spending perspective and the receiving perspective. Simplicity leads to mass use and mass use leads to wide acceptability.

Categorization of Digital Cash

· Anonymous vs Identified - Anonymous e-cash works just like real paper cash. Once anonymous e-cash is withdrawn from an account, it can be spent or given away without leaving a transaction trail. This however, can be considered contentious, such as Paypal, a recognized form of digital cash, is not considered to be entirely anonymous.

· Online vs Offline - Online means you need to interact with a bank (via modem or network) to conduct a transaction with a third party. Offline means you can conduct atransaction without having to directly involve a bank

· Smart Cards vs Purely Electronic - Smart cards are similar to credit cards, but storemoney-related information on a chip within the card. They may be used in digital cashapplications. Again, there is ambivalence as to whether smart cards represent "true"digital cash.

Critics claim smart cards encumber peer-to-peer transactions and are notpurely electronic as the digital cash protocols related to networks and the internet

Hard vs Soft electronic currency – Hard e-currency is one that does not have services to dispute or reverse charges i.e. it only supports non-reversible transactions. Reversing transactions, even in case of a legitimate error, unauthorized use, or failure of a vendor to supply goods is difficult, if not impossible. Additionally, it allows the electronic currency transactions to clear instantly, making the funds available immediately to the recipient. This means that using hard electronic currency is more close to a cash transaction. Examples are TokenPay, Pecunix, Liberty Reserve, Western Union, KlickEx and Bitcoin.

A soft electronic currency is one that allows for reversal of payments, for example in case of fraud or disputes. Reversible payment methods generally have a "clearing time“ of 72 hours or more. Examples are PayPal and credit card. A hard currency can be softened by using a trusted third party or an escrow service

Online Digital Cash ModelOnline Digital Cash Model

The diagram above shows the structure of the online digital cash system,the structure is indeed very similar to the one which is being used in the existing paper cash system. In this system, we have got three main components; the bank, customers and merchants, the user withdraw coins from the back, spend in the shop and the shop deposit the coin back to the bank. The user ID in this online digital cash system is fully anonymous and it is done by using a protocol called Blind Signature Protocol. This protocol simply eliminates the association between the user ID and the serial number of the coin. Although it is good to hide user’s identity totally, but this raises the problem of “double spending” – since the digital cash is digitallyrepresented, it is very easy to duplicate and let the user spend the coin twice.

To tackle the double spending problem, the merchant has to verify the coin with the bank at the point of sale in each of the transaction, this verification of the legitimacy of the coin requires extra bandwidth and is a potential bottleneck of the system especially when the traffic is high.

Pros of Online Digital Cash Model• Provides fully anonymous and untraceable digital cash: Provides user with confident that their user ID will not be revealed in anyways.• No double spending problems - Double spending is not possible at all due to the fact that coins are checked in real time during the transaction.• Don't require additional secure hardware - No additional hardware is needed for the implementation; existing POS (Point of Sale) devices could be used with a software update.Cons of Online Digital Cash Model• Communications overhead between merchant and the bank - The cost of the extra security and anonymity also becomes the bottleneck of the system due to real time verification.• Huge database of coin records - The bank server needs to maintain an ever-growing database for all the used coins’ serial numbers.• Difficult to scale, need synchronization between bank servers - There is a need to perform synchronization of coin’s serial numbers every time a coin is deposit into the bank. This is simply impractical.• Coins are not reusable - It has to be deposited back to the bank for verification; therefore, coins can only be used once.

Offline Digital Cash ModelOffline Digital Cash Model

In the off-line scheme, the withdrawal and disposal of the coins are very similar to the one in the on-line scheme; the main difference is in the transaction part of the model. Instead of verifying coins during every transaction, the security of each entity in the system is guaranteed without a direct involvement with the bank. This is achieved by adding an additional component in the model called the “Temper – Resistant Device”. In a real life example, you could think of it as the Smart Card Reader at the Point of Sale. The device is trusted by the bank and is used to verify the authenticity of the coin but does not check whether the coin has been double spent. This device makes the whole transaction offline but let the system suffers from the double spending problem. In order to add extra security to the offline system, there could be a link between thebank and the temper-resistant device which allows the T.R.D. to download a blacklist of double spenders in a set period of time when the traffic is low. This reduces the chance of people double spending their money in the first place.

Pros of Offline Digital Cash Model• Off-line scheme -The offline model is a fully offline and portable system.• User is fully anonymous unless double spend - The user is as anonymous as the online system if and only if they did not double spend.• Bank can detect double spender - The ID of the double spender would be revealed, this is an advantage towards the bank as it might worries about double spending problem.• Banks don’t need to synchronize database in each transaction - The frequency of the synchronization between the bank servers is kept to a minimum as these are always done via batch updates.• Coins could be reusable - Depending on the implementation, coins in the system could be reusable which further reduces the overhead and the size of the coin in the database.

Cons of Offline Digital Cash Model• Might not prevent double spending immediately - As the user could in theory still double spend by risking the chance of being caught. • More expensive to implement - The extra security hardware needed in the system requires an additional cost

Centregold – An alternate to Centregold – An alternate to Digital CashDigital Cash

Use your credit card, debit card or bank wire to purchase digital currency online. In today's high tech world, digital currency has become an important means of conducting trade in the online marketplace. When it comes to effective, reliable digital exchange, Centregold sets the standard.

In the field of digital currency exchange, nothing surpasses the power of gold. That's why Centregold offers digital currency, also known as electronic currency, to be bought, sold or exchanged online. Some digital currencies are backed by genuine gold, stored in vaults, while others are backed by flat currency; and with Centregold, you can ensure that your digital exchange is effective, trustworthy and reliable. This way you can conduct any digital currency exchange with ease and peace of mind; knowing that you are backed by the gold standard.

So what's so good about gold? For one thing, it's a mode of currency that doesn't run the risk of inflation—as gold grows, so do your profits. Your assets will be safeguarded by the 'gold standard', providing a surefire brand of eternal money that will not diminish over time, even in instances of inflation, economy, political events or any other adverse economic conditions.

Browse through the Centregold website, sign up for a new account, buy, sell, learn about different digital currencies available form Centregold, including WebMoney, and buy them. All transactions can be completed with any major credit card or debit card, and transactions generally take place in a single business day. Regardless of the individual financial options you choose, Centre Gold assures the safety, efficiency and outright value of every monetary transaction. Your money is in good hands with Centregold.

Digital Cheques (Checks)Digital Cheques (Checks)Electronic checking systems provide a means to send a message to a bank to transfer funds from the sender's account to another account. The message is first directed to the intended receiver of the funds who endorses the check and presents it to the bank to collect the funds.

Security Measures: An electronic check system over an internet protects against merchant fraud by using the bank's public key to encode the account number. Digital certificates can also beused to authenticate the payer, the bank and the bank account. Digital signatures provide a means to authenticate the signing and endorsing of the electronic check.

Mechanisms for Use: Electronic checks may be delivered by direct transmission or through email.Payments are cleared using existing banking clearing house networks. The system can beused by individual consumers or by businesses.

For example, a consortium of banks and clearing houses known as the Financial Services Technology Corporation (FSTC) offers an electronic checking system. It plans to include money transfers and transactions involving the National Automated Clearing House Association which provides for transfer of funds between banks. This will permit companies to pay invoices from other businesses through the FSTC electronic check system.

Why do you need Digital Currencies?There are a lot of reasons why you should use more Digital Currencies than Fiat ones:Digital currencies are cheaper: Most of them are ten times cheaper than fiat ones (such as Dollar, Euro, etc), in terms of transaction fees. Fees are lower than card and bank wire transactions; that's true even for the most expensive digital currency. These savings can then be passed along to their clients afterwards, in the form of lower prices for instance; thus helping them to gain a significant competitive advantage.

Digital currencies are safer: Digital currencies are far safer than payments by debit & credit cards. Higher security level is possible, first by encrypting your information to prevent thieves from accessing your account. Second, the merchant, whom you're dealing with, never sees your password; in fact the payment is made at the e-currency issuer's secure website (such as libertyreserve.com or pecunix.com, etc); so that it's impossible for thieves to steal it, unless you give it to them yourself by granting them access to your computer while welcoming a trojan or disabling the firewall.

Digital currencies are faster: When you use the bank wire system, it may take several business hours to clear. Even credit card payments might still be reversed several days later. This is no longer the case, if you use a digital currency, as this system enables you to conduct safe transactions in real time. All payments, even large ones, between digital account holders areinstantaneous and final. This means the funds will be received just a few seconds later, whereveryou are in the world.

Digital currencies are borderless: One of the most important features of digital currency is its transnationality. It doesn't recognize national borders, nor controlled by any Government or central bank. In fact, the Internet has made it possible for private companies - or even individuals - to issue an asset-backed digital currency, transcending political borders. Digital currencies help online consumers who either don't have a credit card or do not like to provide their card number online. Traditionally, in order to be able to sell a product or service on the web, a merchant had to get an international credit card merchant account, which might be difficult to obtain in countries outside North America and the European Union. This creates a barrier making it difficult for international sellers to offer their products to the world.Digital currencies are convenient: Reliability, stability, availability, confidence, and ease of use; these are only a few characteristics of digital currencies such as WebMoney or Liberty Reserve, especially the gold units that Centregold offers you in retail. Accounts are free without any commitments; the user interface is convenient and available online for 24 hours a day, as the internet never sleeps. Indeed sending and receiving funds have never been easier. When using digital currencies, you do not write checks, you just make transfers which cost almost nothing and clear in a few seconds, unlike traditional bank transfers.

Digital currencies allow p2p payments: Digital Currencies permit one thing which credit cards generally don’t: person to person payments. In the card industry, unauthorized individuals and businesses can’t make a payment to or receive money from debit and credit cards. However, there is a high need for such a payment system that allows any two persons to make a direct payment with each other privately, without needing for a trusted third party. For example, if you want to buy something found in an online classified ad, but the seller doesn’t have a merchant account and lives hundreds of miles away, then you wish to have a means to send money privately without the burdens of dealing with a financial institution. Digital currencies allow youto do that instantly. You can anonymously send payments to anyone having the same digital currency account. You can even send money to several persons at once, using the batch feature. This system is extremely efficient and there is also no reporting of such transactions to any government.

Digital currencies are more private: Digital currencies allow an individual or a company to pay to any other anonymously. It’s a nice way to maintain secrecy of a buyer or merchant if required.

Digital currencies offer more freedom: We should be allowed to create as many accounts as we want for free; and be able to make a transaction at any time, should it be weekends or holidays, without compromising our personal information online. Using digital currencies, such as WebMoney and Liberty Reserve, you can freely open a free account at any time, without having to expose your personal information over the Internet, nor providing any id, thus avoiding identity theft risks. All of that can be done securely online – no office visit required – whenever you have access to the web, even using a smart-phone, without worrying about time-zones and business hours.

Digital currencies help protect the environment: As they are stored electronically, account and currency in their digital version are less cumbersome, easy to transfer and don’t generate any waste. digital currencies (also known as e-currency or electronic money) such as Liberty Reserve, Pecunix and WebMoney, circulate in computer networks and can be instantly downloaded into electronic chips, inside a mobile phone for instance, in order to make a purchase.

Digital currencies are the new trend: This modern payment solution has been designed to combine all best features of other payment solutions ever known to the humanity, and in accordance with the preferences of the users, especially in terms of speed, privacy, cost and security. The most popular of them such as WebMoney, LibertyReserve, Pecunix and C-gold enable payment efficiencies eliminating the need for banks to install a branch in every village, by allowing consumers and merchants to enter financial relationship online in an easy and convenient way, at any time wherever they are in the world.

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