Under three heading can be discussed.
1. Transaction risks.
2. Data storage and transmission risks.
3. Threat to intellectual property and privacy risks.
1. Transaction risks : Online transactions are vulnerable to the following types of transaction risks.
• Seller denies that the customer ever placed the order or the customer denies that he ever placed the order. This may be referred to as default on order taking/giving.
• The intended delivery does not take place, goods are delivered at wrong address or goods other than ordered may be delivered. This may be regarded as default on delivery.
• Seller does not get the payment for the goods supplied whereas the customer claims that the payment was made. This may be referred to as default on payment.
Thus, in e-business risk may arise for the buyer on account of default on order taking / giving, delivery as well as payment such situation can be averted by providing for identity and location/address verification at the time of registration, and obtaining authorisation as to the order and payment realisation.
To make payment, 95% of customers use credit cards for their online purchases. e-commerce technology today permits online processing of the credit card information.
2. Data storage and transmission risks: If the information goes into wrong hands (e.g. virus or hacking), the other person can misutilise that information. For this, the help of cryptography can be taken. It is a system of protecting information by transforming the information (encrypting it) into an unreadable format called “Cyphertext”. Only those who posseses a secret key can decipher the message into “plain text.”
3. Risks of threat to intellectual property and privacy : Internet is an open device. Once the information is available on internet, it can be used by anybody and it is very difficult to protect it from being copied.
1. Computer Hardware : The first requirement for implementation of e-commerce is the availability of adequate computer hardware.
2. Telecommunication Facilities : e-business can be carried out if a business enterprise has access to the effective telecommunication system.
3. Internet Connection : For carrying out e-commerce, the business firm must get an internet connection from any Internet Service Provider.
4. Company’s Website : To carry out e-Business, the business enterprise must develop a comprehensive website. This will facilitate communication with customers, other business enterprises and even government departments.
5. Qualified Personnel : It is essential for the business firm to have technically qualified personnel to make use of computer networks and internet for business transactions.
6. Reliable Payment System : For the success of e-commerce, the business enterprise needs to develop an efficient system of receiving payments for the goods sold.
Types of Payment Mechanism are :
1. Electronic Funds Transfer (EFT) : EFT may be defined as “any transfer of funds initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorise a financial institution to debit or credit an account.”
The application of EFT are as follows :
1. Banking and Financial Payments :
• Large scale or wholesale payments.
• Small scale or retail payments.
• Home banking.
2. Retailing Payments :
• Credit cards.
• Private label credit/debit cards.
• Charge cards.
3. Online Electronic Commerce Payments :
• Token based payment systems.
• Electronic cash.
• Electronic cheques.
• Smart cards or debit cards.
e-Cheque : e-cheque is a broad term used to refer to any attempt to initiate payment through PCs, the Internet, and computer systems. Electronic cheque initiates a payment that begins as a paper cheque is converted into a truncated to, an Automated Clearing House (ACH) debit entry. It also refers to a transaction that is initiated over the Internet or via phone, with the debit carried out by an electronic debit, usually an ACH debit.
Eelectronic Money : Electronic money or cash is a new concept in online payment system that combines computerised convenience with security and privacy and that improves on paper cash. e-cash is used as a generic term for cash value stored in electronic form on the chip of a smart card. In an electronic cash transaction, the value is directly transferred from the consumer’s chip to the retailer’s chip.
E-money is an electronic medium for making payments. It includes credit cards, smart cards debit cards, electronic funds transfer and automated clearinghouse (ACH) system.
Credit Cards : The credit card payments on the on-line network can be categorised into three types :
(i) Payments using plain credit card details.
(ii) Payments using encrafpted credit card details.
(iii) Payments using third party verification.
Debit Cards : They look exactly like credit
cards, except that they directly tap customer’s checking amount every time they make purchase or a withdrawal. They are easier, more convenient, less combersome, and offer greater access to our money than do cheques, ATM or credit cards. Debit cards can be used with or without a personal identification number (PIN) almost everywhere retail stores, petrol stations, restaurants, pay phones.
Smart Cards : It is a thin, credit card sized piece of plastic that contains a half inch square area that serves as the card’s input/output system. A smart card contains a programmable chip, a combination of RAN and ROM storage, and an operating system of sorts, all embedded in the plastic. It encrypts digital cash an a chip and can be refilled by connecting to a bank.
e-Wallet : An electronic payment system that operates like a carrier of e-cash and information in the same way a real-world wallet functions such as carrying real cash and various IDs. The aim is to give shoppers a single, simple and secure way of carrying currency electronically.
1. The customer side, where a customer can be impersonated, with or without the use of the customer’s equipment. The use of stolen credit card details is a common example.
2. The vendor side, where the vendor can trade inappropriately or dishonestly. Problems can range from customer details being stolen from the venders files by bogus traders who operate online and take money with no intention of supplying the advertised goods or services.
In order to ensure security and safety of e-commerce, the following points need to be strengthened :
(i) Authentication : The sender of a document must be identified precisely and without any possibility of fraud.
(ii) Confidentiality : The contents of a message may not be carried by unauthorised parties.
(iii) Integrity : Changes made in messages without according remarks must be impossible.
(iv) Non-Repudiation : The render of a message is directly connected to the contents of the message and the recipient cannot deny that the message as received.
1. It is one step extension of BPO (Business Process Outsourcing).
2. It calls for the application of specialised domain knowledge of high level.
3. It involves a component of Business Processing Outsourcing (BPO), Research Process Outsourcing (RPO) and Analyses Process Outsourcing (APO).
4. BPO industry handles more amount of high skilled work other than the BPO industry.
5. The future of KPO has a high potential as it is not restricted to only IT, IT’s sectors. It includes other sectors like legal processes, intellectual property and patent related services, engineering services etc.
6. It derives its strength from the depth of knowledge, experience and judgement sector.
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