INDEX

S no. Particulars Page no.

1. Basic Concept of E-Commerce 2-5

2. Security Protocols in E-Commerce 5-8

3. Electronic Payment System 9-17

4. Concept of Virtual Enterprise 18-26

5. Measures taken by E- Governance to 26-28

reduce the risk of Online payment

Concept of Digi-Cash and Working of

6. 28-31
Online Banking system

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 Answer the following question-

Ques 1.) Explain the concept of electronic commerce? Discuss its significance, advantages
and disadvantages?
Ans. E-commerce or electronic commerce simply refers to carrying out business transactions
over the internet. Just like in conventional businesses, this type of trade has all the aspects of a
business transaction such as buying, selling, and payments. The major difference is that this
business model is based on electronic transactions.

In e-commerce, companies set up stores on the internet and provide user interfaces that allow for
the purchase and selling of merchandise. There is no physical contact between the seller and the
buyer since purchases are done online.

E-commerce adopts the use of technology to meet customer demands and settle transactions. In
this business model, an entrepreneur does not need to have a physical premise; only a store for
keeping commodities.

Significance of E-Commerce

The role of e-commerce in daily life is becoming very important. E-commerce can be used in the
following ways:

1. Electronic banking

Many banks are now introducing electronic banking. Using your computer, you can connect to
the bank’s computer system via the internet and control your daily financial dealing from home.
It reduces the staff and building of banks. May customers pay their bills from their bank accounts
using this facility.

2. Electronic shopping

It has become very easy from the people to shop from home using internet. Different
manufacturers present their product s on the internet. People can browse the website, place an
order and even make a payment using credit card. It has made shopping very easy.

3. Conducting Auctions

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 Many websites provide the facility of auction. People participate in the auction to purchase a
product. They can also pay the price using their credit cards etc. a popular website that provides
this facility is eBay.

4. Marketing and Advertising

E-commerce is playing an important part to market and advertise products all over the world.
The use of popular websites can be an effective way of introducing a product to the customers.

5. Providing customer services

Businessmen can interact with their customers using the internet. They can discuss different
issues about their products. They can also deal with their complaints and provide different
services to them.

6. Online travel reservations

Online travel reservation is a popular use of e-commerce, People can reserve seats in airline
flights, hotels or car using the internet.

7. Online trading

Online trading is a process of conducting business using the internet. The stockbrokers can do all
trading activities electronically. They can submit and receive bids using computers. They can
also interconnect with computer screens where brokers match buyers with sellers. It reduces the
cost as no paper or special building is required to conduct these activities.

8. Videoconferencing

Video conferencing is a type of conferencing in which video cameras and microphones are used
for discussions. It provides an environment of normal meeting. It enables participants to see, hear
and present material to one another as if they are in the same room. Video conferencing can
speed up business process and procedures.

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Advantages of e-commerce

1. Enhances convenience: Customers can make orders for goods at their own convenience and
from the comfort of their homes without having to travel to the business premise. Orders are also
delivered to them at their most ideal locations. It’s the best shopping option for people who are
always busy.

2. Allows for product and price comparison: Again, when making purchases, customers want
to get the best deals. This business model allows for product and price comparison by consumers
so that the best products are bought at the fairest prices. They can also enjoy extra benefits like
discounts, coupons, items on sale and also get the best deals.

3. Easy fund-raising for start-ups ventures: So many people have the desire to venture into
business but lack sufficient funds to set up shop. Leasing a physical store can be quite expensive.
E-commerce makes it easier for start-ups to do business and grow.

4. Efficient: E-commerce has the advantage of being efficient. Resources are used efficiently

since most of the business services are automated. Business owners sometimes spend a lot of
resources meeting business needs and this eats into profits. E-commerce thrives on efficiency.

5. Customer reach: It’s easier to reach many customers on the internet. Using social media links
and good search engine optimization strategies, an online business can increase brand awareness
and grow its customer base. It also has the advantage of being able to connect buyers and sellers
from all corners of the globe.

6. Prompt payments: Payments are fast since online stores use electronic or mobile transactions
payment methods. The mobile wallet system for merchant accounts drive up sales and increase
revenue generation.

7. Ability to sell different products: The flexibility of conducting business over the internet
makes it possible for entrepreneurs to display and sell several products and also cater to a wider
demographic.

Disadvantages

1. Poor quality products: You don’t physically see and inspect whatever you are paying for
before it’s delivered. Customers, therefore, run the risk of falling victim to false marketing and
buying poor quality products from the virtual shop.

2. Impulsive purchases: Online stores display a large number of products and due to the
convenience of shopping, customers can find themselves making bad financial decisions through
impulsive purchases.

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3. Internet scammers: The internet is a good thing but some people have decided to use it for
all the wrong reasons. Scammers have made this type of business model unattractive for some
consumers.

4. Lack of after sales support: As a result of lack of physical premises, customers find it hard to
access after sales support. It can take up to several days before any help is accorded to a
customer in need.

5. Fast changing business environment: Technology evolves so fast. Some entrepreneurs find

it hard to keep up and lose a lot of business in the process. This may make business growth
unattainable.

6. Loss of personal touch: Business is all about relationships. This business model erodes the
personal touch between a customer and the business owner. Cultivating loyalty can thus be a
problem since there are many such businesses that provide different options.

7. Delivery of goods can get delayed: It takes time before the goods ordered for are delivered.
Sometimes the delivery delays and this inconveniences the customer. This is different from
physical business premises where customers walk out with the products bought.

Further, many critics of electronic commerce, however, have argued that this mode of buying
and selling has been endangering the livelihoods of traditional market sellers and shop owners
who prefer to sell face to face.

Ques.2 ) Explain the significance of security protocols in E- commerce?

Ans. Security is an essential part of any transaction that takes place over the internet.
Customers will lose his/her faith in e-business if its security is compromised. Following are the
essential requirements for safe e-payments/transactions −
 Confidentiality − Information should not be accessible to an unauthorized person. It
should not be intercepted during the transmission.
 Integrity − Information should not be altered during its transmission over the network.
 Availability − Information should be available wherever and whenever required within a
time limit specified.
 Authenticity − There should be a mechanism to authenticate a user before giving
him/her an access to the required information.

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  Non-Reputability − It is the protection against the denial of order or denial of payment.
Once a sender sends a message, the sender should not be able to deny sending the
message. Similarly, the recipient of message should not be able to deny the receipt.
 Encryption − Information should be encrypted and decrypted only by an authorized
user.
 Auditability − Data should be recorded in such a way that it can be audited for integrity
requirements.

Measures to ensure Security

Major security measures are following −
 Encryption − It is a very effective and practical way to safeguard the data being
transmitted over the network. Sender of the information encrypts the data using a secret
code and only the specified receiver can decrypt the data using the same or a different
secret code.
 Digital Signature − Digital signature ensures the authenticity of the information. A
digital signature is an e-signature authenticated through encryption and password.
 Security Certificates − Security certificate is a unique digital id used to verify the
identity of an individual website or user.
Security Protocols in Internet
We will discuss here some of the popular protocols used over the internet to ensure secured
online transactions.
Secure Socket Layer (SSL):
It is the most commonly used protocol and is widely used across the industry. It meets following
security requirements −

 Authentication
 Encryption
 Integrity
 Non-reputability
"https://" is to be used for HTTP urls with SSL, where as "http:/" is to be used for HTTP urls
without SSL.
Secure Hypertext Transfer Protocol (SHTTP)
SHTTP extends the HTTP internet protocol with public key encryption, authentication, and
digital signature over the internet. Secure HTTP supports multiple security mechanism,
providing security to the end-users. SHTTP works by negotiating encryption scheme types used
between the client and the server.
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration. Theoretically, it is
the best security protocol. It has the following components −

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  Card Holder's Digital Wallet Software − Digital Wallet allows the card holder to make
secure purchases online via point and click interface.
 Merchant Software − This software helps merchants to communicate with potential
customers and financial institutions in a secure manner.
 Payment Gateway Server Software − Payment gateway provides automatic and
standard payment process. It supports the process for merchant's certificate request.
 Certificate Authority Software − This software is used by financial institutions to issue
digital certificates to card holders and merchants, and to enable them to register their
account agreements for secure electronic commerce.

A website following the B2B business model sells its products to an intermediate buyer who
then sells the products to the final customer. As an example, a wholesaler places an order from a
company's website and after receiving the consignment, it sells the end product to the final
customer who comes to buy the product at the wholesaler's retail outlet.

B2B identifies both the seller as well as the buyer as business entities. B2B covers a large
number of applications, which enables business to form relationships with their distributors, re-
sellers, suppliers, etc. Following are the leading items in B2B ecommerce.

 Electronics
 Shipping and Warehousing
 Motor Vehicles
 Petrochemicals
 Paper

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  Office products
 Food
 Agriculture

Architectural Models:
Following are the architectural models in B2B e-commerce −
 Supplier Oriented marketplace − In this type of model, a common marketplace
provided by supplier is used by both individual customers as well as business users. A
supplier offers an e-stores for sales promotion.
 Buyer Oriented marketplace − In this type of model, buyer has his/her own market
place or e-market. He invites suppliers to bid on product's catalog. A Buyer company
opens a bidding site.
 Intermediary Oriented marketplace − In this type of model, an intermediary company
runs a market place where business buyers and sellers can transact with each other.
E-Commerce - B2C Model
In B2C model, a business website is a place where all the transactions take place directly
between a business organization and a consumer.

In the B2C model, a consumer goes to the website, selects a catalog, orders the catalog, and an
email is sent to the business organization. After receiving the order, goods are dispatched to the
customer. Following are the key features of the B2C model −

 Heavy advertising required to attract customers.

 High investments in terms of hardware/software.
 Support or good customer care service.
Ques.3 ) Discuss the importance of Electronic payment. Explain the process of Debit/credit
card payment system?

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Ans:
With the advancement in telecommunication, electronic payment systems are rapidly replacing
the traditional modes of payment that involved personal contact between buyers and sellers.
Electronic payment systems entail online financial transactions that utilize some form of a digital
financial device, such as e-tokens, e-cash and checks. E-payment systems present a number of
benefits to both individuals and businesses.
Variety of choice:

Electronic payment systems allow financial institutions, businesses and the government to offer a
variety of payment options to their customers. These systems include automated teller machines,
debit cards, credit cards, mobile banking and payment of bills through the phone. Traditional
business payments systems depends mainly on a limited number of the business outlets situated
in different locations. This limited the client coverage. Through Internet services, e-payment
systems are available to a large number of clients.

Reduced cost:

E-payments systems result in reduced costs for both businesses and individuals. Businesses save
on operational and processing expenses mainly due to reduction in technological costs -- for
example, the use of the Internet and the acquisition of computers and other machines.
Expenditures in paper and postage is cut down along with time spent in executing personal
transactions. Customers also save on time spent in dealing with personal transactions as in
traditional payment systems.

Reliability:

The use of e-payments cancels out the use of drafting checks, transmitting cash and invoices for
both businesses and customers. This allows for faster execution of transactions -- for example,
you do not have to wait for the 30 days required in invoicing transactions. Credit cards also allow
for customers to partake in transactions without immediate cash.

Security:

The traditional payment systems mainly involved clients sending their confidential information
via post or physically visiting the transaction site. This presented a number of security risks -- for
example, your mail may get lost or fall into the wrong hands. Additionally, places where
financial transactions take place are targets for criminal attacks. E-payment systems offer
encrypted services which protects the clients’ private information.

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DEBIT CARD PROCESSING

Debit cards or check cards provide cardholders with electronic access to bank accounts at
financial institutions. These cards can be used by cardholders instead of cash to make purchases.
Debit card processors charge nominal debit card processing fees as a way of doing business.
When companies utilize debit card processing services, it allows them to focus on their core
business and steer clear of the hassle associated with paper checks.

How Does Debit Card Payment Processing work?

Online Debit card processing involves a series of steps:

Step 1: User Initiates Online Debit Card Payment

The user logs on to a Yap Stone website or app to pay rent, HOA dues, vacation home rental
charges, inn charges, or a church donation. After selecting debit card as the payment method, the
user provides name, debit card details, and billing address, and then submits payment.

Step 2: Yap Stone to Payment Processor

The details of the transaction are sent by Yap Stone to its payment processor via a dedicated link
that’s monitored 24/7 to make sure that debit card payment processing is uninterrupted.

Step 3: Payment Processor to Debit Card Networks to Card Issuing Bank

In order to validate payment details, the payment processor sends them through the debit card
networks (Visa, MasterCard) who send them for authorization to the card-issuing bank.

Step 4: Card Issuing Bank

The card-issuing bank approves or denies the transaction based on card status and by assessing if
the transaction falls within the cardholder’s credit limit.

Step 5: Payment Processor to Debit Card Networks to Yap Stone

If payment is approved, the user is charged by the card issuer, which then transfers the funds to
the card networks minus debit card processing fees to cover costs like credit risk and customer
rewards. The card networks then relay the approved status of the transaction back to the payment
processor, which informs Yap Stone and passes on the funds, minus any applicable fees.

Step 6: Yap Stone to User

Yap Stone notifies the user via the online payment interface regarding the transaction’s approved
or denied status. In the event the payments denied, Yap Stone’s payment gateway informs the
site or app and due to the fact that the card issuer did not authorize the transaction, no further
action takes place.

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Step 7: Yap Stone to Merchant

Finally, Yap Stone transfers funds from its bank account to the merchant’s account. This
normally takes one to two business days. A receipt is emailed to the user and payment receipt
notifications are sent to the merchant. In addition, detailed Yap Stone merchant reports are
updated in real-time. Reports include the Batch Reconciliation Report , Transaction Activity
Report, and Transaction Summary Report.

* There are several processing options offered by Yap Stone. Not all online debit card payment
processing follows this flow.

Credit Card Transaction Process:

Credit card transactions are processed through a variety of platforms, including brick-and-mortar
stores, e-commerce stores, wireless terminals, and phone or mobile devices. The entire cycle —
from the time you slide your card through the card reader until a receipt is produced — takes
place within two to three seconds. Using a brick-and-mortar store purchase as a model, we’ve

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broken down the transaction process into three stages (the “clearing” and “settlement” stages
take place simultaneously):

Stage 1: Authorization

In the authorization stage, the merchant must obtain approval for payment from the issuing bank.

1. The cardholder presents their credit card for payment to the merchant at the point of sale.

2. After swiping their credit card on a point of sale (POS) terminal, the customer’s credit
card details are sent to the acquiring bank (or its acquiring processor) via an Internet
connection or a phone line.

3. The acquiring bank or processor forwards the credit card details to the credit card
network.

4. The credit card network clears the payment and requests payment authorization from the
issuing bank. The authorization request includes the following:
 Credit card number

 Card expiration date

 Billing address — for Address Verification System (AVS) validation

 Card security code — CVV, for instance

 Payment amount

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Stage 2: Authentication

In the authentication stage, the issuing bank verifies the validity of the customer’s credit card
using fraud protection tools such as the Address Verification Service (AVS) and card security
codes such as CVV, CVV2, CVC2 and CID.

1. The issuing bank receives the payment authorization request from the credit card network.

2. The issuing bank validates the credit card number, checks the amount of available funds,
matches the billing address to the one on file and validates the CVV number.

3. The issuing bank approves, or declines, the transaction and sends back the appropriate
response to the merchant through the same channels: credit card network and acquiring
bank or processor.

4. Once the merchant receives the authorization, the issuing bank will place a hold in the
amount of the purchase on the cardholder’s account. The merchant’s POS terminal will
collect all approved authorizations to be processed in a “batch” at the end of the business
day.

5. The merchant provides the customer a receipt to complete the sale.

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Stage 3: Clearing & Settlement

In the clearing stage, the transaction is posted to both the cardholder’s monthly credit card billing
statement and the merchant’s statement. It occurs simultaneously with the settlement stage.
1. At the end of each business day, the merchant sends the approved authorizations in a
batch to the acquiring bank or processor.

2. The acquiring processor routes the batched information to the credit card network for
settlement.

3. The credit card network forwards each approved transaction to the appropriate issuing
bank.

4. Usually within 24 to 48 hours of the transaction, the issuing bank will transfer the funds
less an “interchange fee,” which it shares with the credit card network.

5. The credit card network pays the acquiring bank and the acquiring processor their
respective percentages from the remaining funds.

6. The acquiring bank credits the merchant’s account for cardholder purchases, less a
“merchant discount rate.”

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 7. The issuing bank posts the transaction information to the cardholder’s account. The
cardholder receives the statement and pays the bill.

Credit Card Processing Fees & Costs

For the convenience of their customers, many merchants accept credit cards as payment. But you
may have wondered why some merchants will accept only cash or require a minimum purchase
amount before allowing the use of a credit card. Here’s why: Merchants must pay a price to
accept credit card payments. Hence, most will seek the cheapest credit card processing rates or
mark up the prices of their products so customers’ payments can absorb the card-processing cost.

Depending on the type of merchant and through which platform a good or service is delivered
(e.g., at the retail store, through e-commerce or by phone), credit card processing rates will vary.

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They usually are charged as flat fees, per-transaction fees or volume-based fees. For the purpose
of this guide, only major costs will be explained below:

Merchant Discount Rate: Merchants pay this fee for accepting credit card payments and
receiving service from acquiring processors. It’s usually between 2% and 3% (online merchants
pay the higher end) — to as much as 5% — of the total purchase price after sales tax is added.
Also known as a discount fee, this rate comprises several components:
 Interchange Fee: The acquiring bank and acquiring processor pay this fee to the issuing
bank. It is market-based and set by each credit card network (except American
Express). Visa and MasterCard, for instance, update their interchange rates twice per year.
Most interchange fees are assessed in two parts: a percentage to the issuing bank and a
fixed transaction fee to the credit card network. For instance, the per-swipe fee might be
2.35% plus $0.15.

Interchange fees vary and are categorized through a process called “interchange
qualification,” which determines the rate based on several criteria:

 Physical presence or absence of the card during the transaction

 Processing method used (e.g., swiped, manually entered or e-commerce)
 Credit card company
 Card type (e.g., regular, premium, commercial, rewards or government-
issued)

 Merchant’s business type (as determined by merchant category code)

 Assessments: Credit card networks (except American Express) charge this fee for
transactions that are made with their branded cards. It usually is based on a percentage of
the total transaction volume for the month. The fee usually is fixed, and the merchant’s
acquiring bank may not charge a lower rate or negotiate a better deal with the merchant.
Assessments generally are charged per transaction but can vary depending on the pricing
model the merchant follows. For instance, Visa might charge a 0.11% assessment plus
$0.0195 processing or usage fee for each card swipe. Assessment amounts may change

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 periodically. Combined with the interchange fee, assessments constitute between 75% and
80% of total card-processing costs.
 Markups: Acquiring banks and acquiring processors usually will include a markup over
interchange fees and assessments partly as profit and partly to cover the cost of facilitating
credit card transactions. It constitutes between 20% and 25% of total card-processing
costs. Merchants generally can negotiate the markup with the entities that charge them.
Markups vary by processor and pricing model. They may also include other types of fees.
Chargebacks: Customers reserve the right to dispute a charge on their credit card billing
statement within 60 days of the statement date. When the issuing bank receives a complaint from
a customer, it charges the merchant between $10 and $50 as a penalty and for issuing a “retrieval
request.” If the merchant doesn’t respond to the retrieval request within a certain timeframe, it
could incur additional fees. The merchant may appeal, but the process is long and likely to favor
the customer. If the merchant loses, the issuing bank will recover, or charge back, the customer’s
payment.

When a Credit Card Transaction Gets Declined

Getting your credit card transaction declined is never enjoyable. It’s embarrassing. But the
rejection of a credit card can be caused by other reasons besides maxing out the card.

When a credit card is declined, the point of sale (POS) terminal will return a response code that
explains why. Sometimes those codes don’t tell the full story. In those instances, only your credit
card issuer can identify the particular reason for the rejection, so you may need to call customer
service to resolve the problem.

Below are some of the most common issues you might encounter if your card gets declined:

 Incorrect credit card number or expiration date

 Insufficient funds

 Some credit card companies reject international charges

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  The issuing bank or credit card company experienced technical issues while your
transaction was being processed

 If the customer made a large number of online purchases within a short period of time,
some banks will reject several of the charges as a fraud-prevention measure

Ques.4 ) Explain the concept of Virtual Enterprises? How they are trending in modern
World through E-commerce?

Ans:
A virtual enterprise (VE) is a temporary alliance of businesses that come together to share
skills or core competencies and resources in order to better respond to business opportunities,
and whose cooperation is supported by computer networks.
It is a manifestation of distributed collaborative networks. A virtual enterprise is a particular case
of virtual organization.
Virtual enterprises have become increasingly common in the area of research and development,
with often far-flung organizations forming alliances that amount to a "Virtual Research
Laboratory. Vasilios (2007) outlined a broad continuum of possible virtual laboratory
relationships, ranging from relatively simple outsourcing by a central organization to tightly knit
consortia of collaborating entities.

A group of people who work together on a project, communicating mainly by phone, email, and

the internet, rather than regularly going to a central office to work:
To be successful, the virtual enterprise must provide operations as competitive as those in a
traditional enterprise.

Abstract
The modern economy is based not only on capital and human resources, but above all on
information that enterprises possess. The right information at the right time may determine the
development and strong competitive position of an enterprise on the market, whereas lack of
such information may even lead to its failure. A properly developed e-business strategy and tools
that are well suited for the specificity of this type of business and appropriately used have a
positive impact on an enterprise's success.

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The aim of the paper is to indicate the existing, modern tools used in e-business in the aspect of
increasing the coverage and sales of the different products and services, with special reference to
recognition of a specific brand. The authors attempt to present business model solutions of a
selected service offered by an e-business which is a Polish leader in e-shop software, as well as
resources of good practices defining how to act to provide services in an optimal way using IT
communication.

6 Ecommerce Trends to Jump on for 2018

Posted by Whitney Blankenship on Oct 27, 2017

2017 was an amazing year in the ecommerce industry. New technology emerging towards the
end of 2016 flourished this year and took stable hold throughout the online retail world, with
trendsetters paving the way for the future.

There were 6 particular trends that answered questions we had about 2017 at the end of last year.
Technologies and best practices had already evolved so much, but there was no real way to
know if they would be passing fads or technologies to stay for the long run.

With an industry expected to top out at $1.195 trillion this year worldwide, competition is
becoming fiercer than ever before. However, staying on top of ecommerce trends will keep you
ahead of the competition, so you can keep your piece of that 1.2 trillion dollar pie.

6 Ecommerce Trends to look out for in 2018

At Divvit, we believe in following the data. The trends that took off in 2017 will lead us to
insights for next year and help you prepare your online store for 2018.

1. Ecommerce Growth Booms in China

In 2016, China overtook the United States as the world’s top ecommerce market. However, A lot
of the end of 2016 was uncertainty concerning new tax laws that the Chinese Government was
implementing on foreign ecommerce imports. However, if 2017 proved anything, it’s that this
monster of a market isn’t going anywhere.

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Image from SmartInsights

In fact, between now and 2019, the Chinese ecommerce market is predicted to double. With
such exponential growth, targeting the Chinese market is one of the best ways to put yourself in a
great strategic position for next year.

How to take advantage of this ecommerce trend for 2018:

The best way to take advantage of this trend is to get your site mobile-perfect if it isn’t already.
Mobile shopping is king in China: more than 95% of internet users in the country go online via
mobile. This means 695.3 million new customers for your store.

Another great way to tap into this market is getting your site localized for the Chinese market.
This doesn’t just mean making sure that your store is in Chinese, but that it looks like a local site
when a Chinese user connects to it. I recommend looking to local professionals who can give
you insights into the Chinese market and localizing your store.

2. The Move Towards Mobile

Ever since mobile browsing overtook PC browsing in 2016, mobile optimization has been a huge
topic in the ecommerce industry.

2017 saw no change on this front: Mobile accounts for 42% of sessions. However, despite the
rise in mobile browsing and sessions, ecommerce revenue by mobile only accounts for 21%.

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Image from WolfGang Digital

Why would that happen? If people are browsing on mobile, why aren't they purchasing on
mobile too?

What we’re actually seeing is the rise of the multichannel customer, who will browse across
devices before deciding to purchase. So even if your mobile conversions aren’t as high as your
mobile browsing, understand that it might be because your customers are using their mobiles to
decide which of your products they want to purchase.

However, if your overall conversion rate starts to take a dive, there might be an issue with your
mobile checkout optimization.

This trend isn’t limited to the electronic experience either. According to Google, 42% of
customers will research via mobile while in a brick-and-mortar store. Even this year, Google
announced that it would be changing their algorithm to prefer mobile-friendly sites, which will
be coming quickly in 2018 & 2019.

How to take advantage of this ecommerce trend for 2018:

According to our own data, our customers’ orders that contained at least one session via
mobile averages at 36%.

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If over a third of your page visits are via mobile (and chances are, that’s a lot higher), having
your store optimized from landing page to confirmation for mobile users is not an option,
it’s mandatory.

Try to create a seamless experience from mobile to PC. Your site should be responsive and your
overall look and feel should be consistent over multiple devices and screens. Make sure that your
mobile navigation and checkout are user-friendly and lightning quick.

3. The Fall of Black Friday/Cyber Monday, and the Rise of Cyber November

Classically the shot that kicks off the holiday shopping season, Black Friday (and more recently,
Cyber Monday) is the event of the year for retailers. In fact, the ecommerce industry has boomed
due to this ‘shopping holiday,’ as now customers can shop for their hearts’ desires from the
comfort of theIr homes without standing in long lines before dawn at big-box retailers.

But why wait for the end of November to kick things off? 88% of US retailers start
advertising sales in the first week of November, and Amazon’s Black Friday Deals Week lasted
35 days in 2016.

Western companies are not the only ones pushing November as the ultimate shopping
season; Alibaba’s singles day (November 11th) was a record-breaking success in
2016,selling $17 billion in just 24 hours.

How to take advantage of this ecommerce trend for 2018?

There’s even still time to launch your sales early in 2017. Nothing is stopping you from
making Cyber November your top sales month.

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But be practical- make sure your inventory and logistics are in place to handle the volume. While
starting earlier will give you the flexibility to react to trends during this holiday season, don’t put
yourself in a position where you can’t fulfill orders before the holidays.

Make sure your delivery times are clearly listed on your site, for example, “Orders
delivered before X date need to be ordered by X date.”

Your site should also be optimized to handle potential traffic volume during Cyber November
too. The last thing your customer wants to see is a site that’s down.

4. The User-Generated Content Takeover

User-generated content (or UGC) is one of the most valuable pieces of content you have access
to. Not only does it give you real feedback on your store and products, but it’s fresh content that
you don’t have to create.

You know who loves fresh content? Google’s search algorithms.

In 2018, UGC will be more important than ever before with the rise of multichannel customers.
Social sharing of your products makes friends and family of your customers that much more
likely to trust your site, and a customer is 97% more likely to purchase after having
interacted with UGC.

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How to take advantage of this ecommerce trend for 2018:

User-generated content isn’t limited to social shares. A huge part of UGC is reviews left on your
site or external sites about your store and products. Reviews boost your SEO and provide rich
snippets in Google search, making your products stand out even more.

Provide a scrolling carousel on your site with your customers photos, reviews, and thoughts
about your product. Not only is it a powerful statement about how many people love your
products, it can be extremely helpful:

ModCloth is basically the example of perfect ecommerce.

In the image above, we can see the dress on display and just below, a row of photos of customers
who have purchased the dress. This shows customers how the dress looks on a variety of heights
and sizes- and the customer can immediately picture themselves in the dress. This is just one
example of how adding UGC to your site is a simple and powerful way to boost your site for
2018.

5. Bring on the Machines

If there was anything 2017 brought forward, it was the rise of chatbots, artificial intelligence, and
machine learning. In 2016, one of the biggest driving trends was the personalization of user
experience, and online sellers relied on machines to create unique and seamless experiences.

Chatbots were leading the way through 2017, with 48% of consumers preferring to connect with
a company via live chat than any other form of contact.

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And adding a bot in the mix? It could save you up to $0.50-$0.70 per interaction. When you’re
not there, live chat doesn’t do a whole lot for your ecommerce unless you add a chatbot in the
mix. Doing so can make you available 24/7 and provide easy service to the questions that are
most frequently asked.

Chatbots weren’t the only AI to make an appearance in 2017- we also saw the rise of AI and
machine learning in determining just how likely a user was to purchase.

The AI is able to track how a user acts when purchasing, noting their behaviors and determining
how likely the next user is to purchase based on whether their behaviors match up with
those who have already purchased. This allows for hyper-targeted remarketing that can close
an otherwise lost sale.

How to take advantage of this ecommerce trend for 2018:

The best way to take advantage of these trends is to welcome them with open arms. These new
developments are far from passing fads, and are becoming more important than ever. Installing a
live chat and chatbot on your site can be quite easy with the right resources. There are many chat
companies that will help you configure your bot to respond to your most frequent questions.

Machine learning for UX personalization is a relatively simple-to-implement tool as well- often

being a line or two of code to plug into your site. Either develop your own code to get something
customized to your site and customers’ needs, or choose a provider that will work with you to get
it configured correctly.

6. A New Reality: The Rise of V-Commerce

Augmented and virtual reality are becoming more popular than ever as ecommerce sellers latch
onto this engaging new trend. While these technologies are largely still in development, retailers
from all over are scrambling to develop their own systems that will create virtual stores,
products, and experiences for their customers.

According to Statistica, even if virtual and augmented reality is adopted at a low frequency in
2018, the world economic impact could be up to $2.5 billion.

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Image from Statistica.com

That’s just if the frequency of adoption is low. This could get as high as 12.6 billion dollars if
the current adoption trend continues- given that 35% of consumers said they would shop more
online if they could virtually interact with the products. This is definitely a trend to keep an eye
on for the next year.

How to take advantage of this ecommerce trend in 2018:

Don’t adopt expensive AR and VR systems just to adopt them. Think about how they’ll best
work for your business, and consider developing a way to test them out with your customers.
While the AR and VR market is still quite niche, this is a field that will explode over the next
year.

Ask your customers if they would be receptive to it and find out if they would understand it. This
is not going to be a technology for everyone, not at first anyway. Test the waters before you
jump in, but if signs point to yes, jump in with both feet.

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In an industry that’s becoming more and more competitive by the day, your ecommerce store
can’t afford to slip beyond the edge. Staying relevant by offering new ways for your customer
to interact with your store is the best way to keep them coming back.

We think these ecommerce trends in particular will be the most important in 2018, and even in
the last quarter of 2017. Keeping up with them isn’t just about doing what’s new and shiny; it’s
about how these trends can best translate into added value for your customers. And
obviously, the best way to know if these trends are affecting your site is to keep up on your
data and analytics.

Ques. 5) How can the risk involved in online payment may be reduced by E-Governance?

Ans:
E-commerce can be a tremendous boon for small businesses, but with it comes the growing risk
of eCommerce fraud.  Small businesses are at particular risk, as fraudsters know that small
merchants often lack the time and resources to implement the most sophisticated and
comprehensive fraud detection protocols. But, there are steps you can take right now to help
keep your business from becoming an easy target for eCommerce fraud.
1)    Achieve and maintain PCI Compliance.
The Payment Card Industry’s Data Security Standard (PCI DSS) is a set of standards and
requirements to help ensure that all online merchants and their customers are protected from
fraud and data breaches. Achieving and maintaining your compliance via the PCI Compliance
Guide is a critical first step to protecting your eCommerce business. In fact, failing to maintain
compliance could result in hefty fines — and could ultimately result in loss of services from
reputable eCommerce vendors.
2)    Keep your shopping cart software updated.
Most small businesses partner with a third-party eCommerce shopping cart vendor to help ensure
a great online shopping experience. These eCommerce specialists also work to protect their
software from fraudsters, whose evolving tactics require constant software updates. Make the
most of your vendor partnership by making sure you consistently update your shopping cart
software. In some cases, it may be necessary to purchase additional features or upgrades to
ensure maximal fraud protection.
3)    Always require Address Verification (AVS) Card Code Verification (CVV) in your
payment gateway.
AVS is standard in most eCommerce platforms, and checks the entered billing address with the
billing address currently on file with the credit card company. CVV is an additional security
feature aimed at reducing card-not-present (CNP) fraud, and goes by several names:

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 Visa – CVV2
 MasterCard – CVC 2
 Discover – CID
 American Express – 4 digits above card number – CID
 4)    Recognize signs of suspicious activity.

 Unusually large orders or high-priced orders

 Expedited shipping on large quantities or high-priced orders
 Expedited shipping when billing and shipping addresses differ
 Orders where the purchaser asks to pick up the order at your location
 Fake phone numbers (e.g. 555-987-6543)
 Suspect email addresses (e.g. [email protected], or addresses that seem like
randomly generated combinations of numbers and letters)
 Inconsistent address information (e.g. zip code doesn’t match state or city)
 5)    Make sure the billing address matches the IP location.
Keep an eye out for IP addresses from overseas that don’t match the billing address. Sites like
IP-Lookup.net allow you to manually research an IP address. One common strategy is to simply
prevent online transactions from IP addresses, which originate in countries to which you do not
ship. Many eCommerce platforms offer security functionality which will automatically recognize
suspicious IP addresses or discrepancies.
6)    Limit the number of declined transactions.
One easy way to spot fraud attempts are repeated declined transactions, where the fraudster is
guessing (or using a malicious software script to generate) credit card numbers and hoping for a
match. Beyond preventing fraud, you will likely incur a small fee for each declined transaction,
so it is in your best interest to create a limit on attempted transactions. When the limit is hit, the
customer should be locked out of your shopping cart and directed to contact customer service by
phone for assistance placing an order.
7)    the same customer information is a major red flag.
8)    Require strong passwords from your customers.
If your ecommerce platform requires or allows customers to create an online customer profile
with saved information, make sure you require strong passwords that meet best practices for
fraud prevention:

 Minimum number of characters

 Combination of capital letters, numbers and symbols

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 Many ecommerce vendors offer their own automatic password strength checkers — take
advantage of these
9)    Know your customer.
Keep a list of confirmed fraudulent attempts.
If a fraudulent order has been linked to an email address, a shipping location, a phone number or
any other customer information, make sure you keep that information on file. Any future order
attempts relating to
For many small businesses, the vast majority of orders come from a very specific customer
demographic and follow a recognizable pattern. Orders from customers that notably do not fit
this profile are easy to spot, and worth checking into. For example, if you sell an item for which
most customers only require a single unit, an order for two-dozen units is suspicious. If your
product is a regional specialty, and an order comes in from a foreign country, you have reason to
investigate further.
10)  When in doubt, check it out.
All of these warning signs, unto themselves, are not proof of fraud — and shutting down a
transaction based on just one warning sign could be disastrous for customer relations. But, when
a red flag goes up, it is always worth giving the order a closer look. One strategy for
investigating is to find an excuse to call the customer directly using the given phone number, and
ask to speak with the cardholder. You might note that your online store has been experiencing
recent issues, and request that the customer confirm a few details of the order. Fraudsters using
stolen credit cards rarely provide a real phone number.

Ques. 6) Define Digi Cash or E-cash? Explain with an appropriate diagram how an online
banking system works?

Ans: Digital cash (eCash):

Digital cash is a system of purchasing cash credits in relatively small amounts, storing the credits
in your computer, and then spending them when making electronic purchases over the Internet.
Theoretically, digital cash could be spent in very small increments, such as tenths of a cent (U.S.)
or less. Most merchants accepting digital cash so far, however, use it as an alternative to other
forms of payment for somewhat higher price purchases. There are several commercial
approaches to digital cash on the Web. Among these are eCash from DigiCash and Cybercash.

Digital cash can also be stored on an electronically sensitive card. See smart

card and micropayment .

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Electronic Cash (Ecash)

An anonymous electronic cash system; equivalent to "cash" or "printed bank notes" except that it
is transferred through networks with bits of information, in essence it is just another
representation of monetary value; anonymity is preserved through public key cryptography,
digital signatures, and blind signatures.

UML use case diagram - Banking system

"Banks offer many different channels to access their banking and other services: 

(1) Automated Teller Machines. 

(2) A branch is a retail location. 

(3) Call center. 

(4) Mail: most banks accept cheque deposits via mail and use mail to communicate to their

customers, e.g. by sending out statements. 

(5) Mobile banking is a method of using one's mobile phone to conduct banking transactions. 

(6) Online banking is a term used for performing multiple transactions, payments etc. over the

Internet. 

(7) Relationship Managers, mostly for private banking or business banking, often visiting

customers at their homes or businesses. 

(8) Telephone banking is a service which allows its customers to conduct transactions over the

telephone with automated attendant or when requested with telephone operator. 

(9) Video banking is a term used for performing banking transactions or professional banking

consultations via a remote video and audio connection. Video banking can be performed via

purpose built banking transaction machines (similar to an Automated teller machine), or via a

video conference enabled bank branch clarification. 

(10) DSA is a Direct Selling Agent, who works for the bank based on a contract. Its main job is

to increase the customer base for the bank." [Bank. Wikipedia] 

The UML use case diagram example "Banking system" was created using the Concept Draw

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PRO diagramming and vector drawing software extended with the Rapid UML solution from the

Software Development area of Concept Draw Solution Park. 

How to Create a Bank ATM Use Case Diagram

UML diagrams are often used in banking management for documenting a banking system. In

particular, the interaction of bank customers with an automated teller machine (ATM) can be

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represented in a Use Case diagram. Before the software code for an ATM, or any other system

design, is written, it is necessary to create a visual representation of any object-oriented

processes. This is done most effectively by creating a Unified Modeling Language (UML)

diagram, using object-oriented modeling. UML works as a general purpose modeling language

for software engineers or system analysts, offering a number of different diagram styles with

which to visually depict all aspects of a software system. ConceptDraw PRO diagramming

software, enhanced and expanded with the ATM UML Diagrams solution, offers the full range

of icons, templates and design elements needed to faithfully represent ATM and banking

information system architecture using UML standards. The ATM UML Diagrams solution is

useful for beginner and advanced users alike. More experienced users will appreciate a full range

of vector stencil libraries and ConceptDraw PRO's powerful software, that allows you to create

your ATM UML diagram in a matter of moments.

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