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 he potential success and growth
of Internet commerce will depend critically on how much it can meet the customer's needs in various respects.
1 Lower prices
Because business applications of the Net may produce cost savings, these cost savings can be passed on to consumers as lower prices. In fact,
some companies have already provided discounts for purchases made at their Web sites. 2 Better selection
A natural advantage of the Net is its ability to store an immense volume of information. In fact, information can be added or changed with little cost.
Amazon.com, Inc., a Seattle-based online bookstore, exploits such advantage and allows shoppers to browse through an impressively huge collection of books (about 2.5 million titles). A searchable database allows
shoppers at the Web site to locate special books quickly. This contrasts with a regular bookstore, in which shoppers review and choose from a
relatively limited collection of books. Following the same idea, a music retail store can substantially broaden its selection of titles without increasing inventory (for example, the Music Boulevard site, www.cdnow.com of the New York City-based N2K Inc., and online music entertainment company. 3 Better service
Internet offers an extra channel for customers to communicate with the
company directly. The Web site, which operates 24 hours a day, 7 days a week, can be a useful tool for improving customer service and support.
Feedback mechanisms for customers' inquiries, complaints, comments, and suggestions should be established. Online order tracking can be provided, informing customers about the status of their orders, FAQs can
be used to better educate customers about the use of products. Other special services such as gift reminder and replacement order reminder may also be arranged.
4 More convenient
Net users can shop and make purchases online through their computers at home any time of the day, without being restricted by the regular office
hours of merchants. Such flexibility is particularly attractive to users who are busy with their jobs and families. Moreover, the products and services
delivered over the Internet, the whole transaction can be completed online with immediate order fulfillment. The shopper can enjoy instant
gratification. To assure customer satisfaction, online companies should offer a good return policy and a good warranty.
METHODS TO SECURE TRANSACTIONS
The security of credit card information has been the main concern of Internet shoppers. Without taking extra security measures, the flow of data
from the shopper to the merchant cannot be assumed to be secure. Third parties may gain access to the data when they are transmitted across the Internet.
The importance of payment security has been underscored by Rich Landers of the InterNIC Information and Education Services who stresses in an article (December 1996) on the future of electronic commerce that
making shoppers feel secure to carry out payment transactions over the Web should be 'the top priority for anyone who is considering a business
future on the Internet'. This expert reviews several sophisticated payment solutions to secure financial transactions on the Internet. 1 A Membership System
The company can implement a membership system to make transactions convenient and secure for the shopper. In setting up a membership
account with the company, the shopper provides the credit card information during registration only. The shopper can then make purchases by simply choosing the credit card as the method of payment. Under the
membership system, the company will obtain an extensive database about the customers. A strong policy on data confidentiality is necessary. All
customer data should be stored on a computer not connected to the Net. 2 A Two-Step Order Operation
The customer can be given an option to pay by check. When the customer places the order online, he or she is provided with an order number in an
order confirmation message. The customer then sends the payment to the company via mail, and the order will be filled after the check has been
received and cleared. A similar operation may apply also to credit card payments. The customer places the order on the Net, but sends credit card information via fax or phone. 3 Secure Browsers and Servers
This method relies on the use of encryption technology (detailed
information about the RSA encryption technique is available from the Web site at www.rsa.com
). When the customer submits an order at the Web site, the merchant's server sends to the customer browser a specific encryption code, which is used to encrypt the order information. The
browser then transmits the encrypted order to the merchant's server. The order information is then moved to a computer off-line from the Net before
decrypting the order information. To enhance security, the company can also choose to store the data in an encrypted format.
4 Advanced Secure Payment Solutions
CyberCash Internet Wallet (www.cybercash.com
), CyberCash, Inc. in Reston, VA, provides a secure solution to make payments on the Net using an encryption-based credit card system. To obtain the wallet
for shopping, the shopper accesses CyberCash's server and downloads the CyberCash software for free. The credit card information is encrypted and stored on the shopper's computer.
When an online purchase is made, the merchant will send the Web transaction to CyberCash, which acts as a gateway decrypting the credit card number and routing the transaction information to the
secure credit card networks.
Electronic cash
DigiCash's Electronic Cash (www.digicash.com), an
Amsterdam-based company, DigiCash, devises another secure payment system based on the idea of digital signatures. The shopper deposits funds into a special bank account, and the bank supplies
the shopper with a unique serial number (a digital signature) to be stored as an electronic currency file on the shopper's hard drive. When the shopper makes a purchase, the serial number is
transferred to the merchant's computer, and the issuing bank then verifies that the digital signature is authentic.
Electronic check
NetChex's electronic check (www.netchex.com
) represents for Net1 Incorporated. It advocates the use of another secure payment system. NetChex acts as a broker in the payment process between
the bank accounts of the shopper and the merchant. The shopper registers his/her bank account with NetChex. Using the NetChex system, the shopper can generate electronic checks on his/her
computer. These electronic checks can be transmitted over the Internet when the shopper makes a purchase. Before completing the transaction, authenticity verification of the electronic check by
NetChex is required. NetChex will later confirm the transaction and the payment amount with the user.
Microchip card
Mondex's smart card (www.mondex.com) represents Mondex
International Limited. It offers a payment device that can be used for Internet commerce. The Mondex card is a smart card, a wallet-sized
plastic card with a microchip embedded on it. The microchip is programmed as an electronic purse. The cardholder can load money from a bank account onto the card through a new generation of cash
dispensers and telephones. Since money is stored digitally, it can be transferred over a telephone line and used for Internet transactions.
To prevent its unauthorized use, the card owner can lock the electronic purse using a personal code. Mondex cards can store different currencies at the same time.
For more information about future growth of online commerce, please email us with the subject Client Online and Growth. |
