Ecommerce practical file

Syllabus Code:BBAN605

Q1. Define ecommerce. Discuss its merits and demerits.

Ans. Ecommerce or electronic commerce is the trading of goods and services on the internet. It is
your bustling city center or brick-and-mortar shop translated into zeroes and ones on the internet
superhighway. This year, an estimated 2.14 billion people worldwide will buy goods and
services online, and the number of Prime members shopping Amazon stores now tops 150
million.
Ecommerce one way among many that people buy and sell things in retail. Some companies sell
products online only, but for many, ecommerce is a distribution channel that’s part of a broader
strategy that includes physical stores and other revenue streams. Either way, ecommerce allows
startups, small businesses, and large companies to sell their products at scale and reach
customers across the world.

Most common applications of Ecommerce

Retail and Wholesale
Ecommerce has numerous applications in this sector. E-retailing is basically a B2C, and in some
cases, a B2B sale of goods and services through online stores designed using virtual shopping
carts and electronic catalogs. A subset of retail ecommerce is m-commerce, or mobile commerce,
wherein a consumer purchases goods and services using their mobile device through the mobile
optimized site of the retailer. These retailers use the E-payment method: they accept payment
through credit or debit cards, online wallets or internet banking, without printing paper invoices
or receipts.
Online Marketing
This refers to the gathering of data about consumer behaviors, preferences, needs, buying
patterns and so on. It helps marketing activities like fixing price, negotiating, enhancing product
features, and building strong customer relationships as this data can be leveraged to provide
customers a tailored and enhanced purchase experience.
Finance
Banks and other financial institutions are using e-commerce to a significant extent. Customers
can check account balances, transfer money to other accounts held by them or others, pay bills
through internet banking, pay insurance premiums, and so on. Individuals can also carry out
trading in stocks online, and get information about stocks to trade in from websites that display
news, charts, performance reports and analyst ratings of companies.

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Manufacturing
Supply chain operations also use ecommerce; usually, a few companies form a group and create
an electronic exchange and facilitate purchase and sale of goods, exchange of market
information, back office information like inventory control, and so on. This enables the smooth
flow of raw materials and finished products among the member companies and also with other
businesses.
Online Booking
This is something almost every one of us has done at some time – book hotels, holidays, airline
tickets, travel insurance, etc. These bookings and reservations are made possible through an
internet booking engine or IBE. It is used the maximum by aviation, tour operations and hotel
industry.
Online Publishing
This refers to the digital publication of books, magazines, catalogues, and developing digital
libraries.
Digital Advertising
Online advertising uses the internet to deliver promotional material to consumers it involves a
publisher, and an advertiser. The advertiser provides the ads, and the publisher integrates ads into
online content. Often there are creative agencies which create the ad and even help in the
placement. Different types of ads include banner ads, social media ads, search engine marketing,
retargeting, pop-up ads, and so on.
Auctions
Online auctions bring together numerous people from various geographical locations and enable
trading of items at negotiated prices, implemented with e-commerce technologies. It enables
more people to participate in auctions. Another example of auction is bidding for seats on an
airline website – window seats, and those at the front with more leg room generally get sold at a
premium, depending on how much a flyer is willing to pay.

E-Commerce is all around us today, and as an entrepreneur, you should also get into this realm if
you want to expand your markets, get more customers and increase your profitability.
Merits and Demerits of Ecommerce
1. Merits of Ecommerce
1. A Larger Market: E-Commerce allows individuals to reach customers all across the
country and all around the world. E-Commerce gives business owners the platform to
reach people from the comfort of their homes. The customers can make any purchase
anytime and anywhere, and significantly more individuals are getting used to shopping on
their mobile devices.

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2. Customer Insights via Tracking and Analytics: Whether the businesses are sending the
visitors to their ecommerce website via PPC, SEO, ads, or a good old postcard, there is a
way of tracking the traffic and the consumers’ entire user journey for getting insights into
the keywords, marketing message, user experience, pricing strategy, and many more.
3. Fast Response to The Consumer Trends and the Market Demands: Especially for the
business people who do “drop ship,” the logistics, when streamlined, allow these
businesses to respond to the market and the trends of ecommerce and demands of the
consumers in a lively manner. Business people can also create deals and promotions on the
fly for attracting customers and generate more sales.
4. Lower Cost: With the advancement of the ecommerce platforms, it has become very
affordable and easy to set up and run an ecommerce business with a lower overhead.
Business people no longer need to spend a big budget on TV ads or billboards, nor think
about personnel and real estate expenses.
5. More Opportunities for “Selling.”: Business people can only offer a limited amount of
information about a product in a physical store. Besides that, ecommerce websites give
them the space to include more information like reviews, demo videos, and customer
testimonials for helping increased conversion.
6. Personalized Messaging: E-Commerce platforms give people in business the opportunity
to provide personalized content and product recommendations for registering customers.
These targeted communications can help in increasing conversion by showing the most
relevant content to the visitor.
7. Increased Sales Along with Instant Gratification: For businesses selling digital goods,
ecommerce allows them to deliver products within seconds of placing an order. This
satisfies the needs of the consumers for instant gratification and assists increase sales,
especially for the low-cost objects that are often known as “impulse buys.”
8. Ability to Scaling Up (Or Down) Quickly Also Unlimited “Shelf Space.”: The growth
of any online business is not only limited by the availability of space. Even though
logistics might become an issue as one’s business grows, it’s less of a challenge compared
to running any brick-and-mortar store. E-Commerce business owners can choose to scale
up or down their operation quickly by taking advantage of the non-ending “shelf space,” as
a response tothe market trends and demands of consumers.
Demerits of Ecommerce
1. Lack of Personal Touch: Some customers appreciate the personal touch they offer when
visiting a physical store by interacting with the sales associates. Such personal touch is
especially essential for businesses that sell high-end products as customers will want to
buy the products and have an excellent experience during the process.
2. Lack of Tactile Experience: No matter how good a video is made, customers still can’t
feel and touch a product. Not to mention, it’s never an easy task to deliver a brand
experience that could often be including the sense of touch, taste, smell, and sound via
the two-dimensionality of any screen.
3. Product and Price Comparison: With online shopping, customers can compare several
products and find the least price. This forces many businesses to compete on price and
reduce their profit margin, reducing the quality of products.
4. Need for Access to the Internet: This is obvious, but don’t forget that the customers do
need access to the Internet before purchasing from any business! As many ecommerce
platforms have the features and functionalities which require a high-speed Internet

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 connection for an optimal consumer experience, there’s a chance that companies are
excluding visitors who have slow internet connections.
5. Credit Card Fraud: Credit card frauds are a natural and growing problem for online
businesses. It can lead to many chargebacks, which result in the loss of penalties,
revenue, and a bad reputation.
6. IT Security Issues: More and more organizations and businesses have fallen prey to
malicious hackers who have stolen information of the customers from their databases.
This could have financial and legal implications, but it also reduces the company’s trust.
7. All the Eggs in One Basket: E-Commerce businesses rely solely or heavily on their
websites. Even just some minutes of downtime or technology glitches could be resulting
in a substantial revenue loss and customer dissatisfaction.
8. Complexity in Regulations, Taxation, and Compliance: Suppose any online business
sells to its consumers in different territories. In that case, they’ll have to stick to the
regulations in their own countries or states and their consumers’ places of residence. This
could be creating a lot of complexities in accounting, taxation and compliance.

Q2 Write short note on the following, along with its merits and demerits
a. B2C
b. B2B
c. C2C
d. G2B

Ans. a. B2C
The term business-to-consumer (B2C) refers to the process of selling products and services
directly between a business and consumers who are the end-users of its products or services.
Most companies that sell directly to consumers can be referred to as B2C companies.
B2C became immensely popular during the dotcom boom of the late 1990s when it was mainly
used to refer to online retailers who sold products and services to consumers through the
internet.
As a business model, business-to-consumer differs significantly from the business-to-
business (B2B) model, which refers to commerce between two or more businesses.
Merits of B2C
1. The inflexibility of the catalog
The direct “link” has the potential to display content data and other visual elements that are
already prevalent on websites owned by a variety of clients. You no need to beg the marketing
consultancy agency.
2. Shrinks Competition Gap
The low cost of marketing and advertising creates opportunities for us to compete with well-
known enterprises in terms of the cost, quality, and accessibility of the items.
3. Unlimited Market Place
By allowing customers to browse and shop at their convenience, it displays an unlimited
market. Online stores no more need a marketing consultancy agency.
4. 24-Hour Store with a Shorter Sale Cycle

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 There is no need to send lengthy emails or place an excessive number of phone calls.
5. Lower Cost of Business
The B2C model has decreased the cost of doing business across a range of areas, including
hiring staff, purchasing expenses, mailing confirmations, telephone conversations, clerical
work, and the need to open physical locations.
6. Eliminating Third Party Clients
We are free to sell our items straight to clients without engaging any third parties in the
transaction.
Demerits of B2C
1. Lack of Catalog Flexibility
However, it’s crucial to rearrange the catalog after adding new data and merchandise,
correspondingly.
2. Infrastructure
Even though it has a huge customer reach and overcomes cultural boundaries by addressing
everyone on the same channel, the truth still stands.
3. Competition
Since there are thousands of online stores and services, the rivalry is indeed fierce and could
jeopardize our company’s consumer base. Some online stores have been able to keep a sizable
portion of the market, allowing them an opportunity to endure over time.
4. Product Exposure Limits
It is important to note that e-commerce has limited the amount of product exposure available to
purchasers online, although it provides them with easy accessibility and a special degree of
product customization.
5. Entering a Cut-Throat Competition
Without conducting market research and B2C Campaigns, many people are influenced to launch
a B2c e-commerce business. As a result, they begin to cater to the market or special segment
where numerous e-commerce companies are already created to serve the public.
6. Shipping Charges
Whether you sell in large or little quantities, transportation fees are a reality. Additionally,
clients demand free shipping in the modern e-commerce industry.
7. Security Concerns
The transactional data from your site can be hacked by a lot of cybercriminals. After that, they
are free to use someone else’s name to purchase anything they want.
B.B2B
Business-to-business (B2B), also called B-to-B, is a form of transaction between businesses,
such as one involving a manufacturer and wholesaler, or a wholesaler and a retailer. Business-
to-business refers to business that is conducted between companies, rather than between a
company and individual consumer. Business-to-business stands in contrast to business-to-
consumer (B2C) and business-to-government (B2G) transactions.
Merits of B2B
 Convenience: While companies can sell through physical storefronts or take transactions by
phone, B2B commerce often takes place online, where companies advertise their products and

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 services, allow fordemonstrations and make it easy to place bulk orders. Sellers also benefit from
efficient order processing thanks to this digital transaction model.
 Higher profits: B2B companies often sell their items in wholesale quantities so that buyers can
get a good deal and need to restock less often. Larger order numbers lead to higher potential
sales and more cash coming in for B2B sellers. At the same time, the ease of advertising to other
businesses through B2B websites can help cut marketing costs and boost conversion rates.
 Huge market potential: From business software and consulting services to bulk materials and
specialized machinery, B2B sellers can target a large market of companies across industries. At
the same time, they have the flexibility of specializing in an area like technology to become a
leader in the field.
 Improved security: Since contracts are a common part of B2B commerce, there's some security
for both buyers and sellers in that there's less concern that one will pay and the other will deliver
goods as promised. Since sales usually get tracked digitally, it's also more secure in that B2B
sellers can track and monitor their financial results.

Demerits of B2B

 More complex setup process: Getting started as a B2B retailer takes work to figure out how to
get customers who stay dedicated and make large-enough orders. This often requires thorough
research to advertise to potential businesses, set up a custom ordering system and adapt quickly
when sales are underwhelming.
 Limits to sales: While B2B companies can sell a lot, they do miss out on potential sales to
individual customers. The smaller pool of business buyers and the need to negotiate contracts
can put some limits on profits, especially when the company loses key buyers to other
competitors.
 Need for B2B sellers to stand out: At the same time, the B2B market has many companies
competing and selling similar products and services. Sellers often need to cut prices and find
special ways to grab companies' attention to succeed in the market.
 Special ordering experience needed: B2B companies selling online need to put much effort
into designing a website and ordering system that buyers find easy to use. This means presenting
product and service information clearly, offering online demos or consultations and using order
forms with appropriate options for quantities and any special customization needed.

C. C2C
Customer to customer (C2C) is a business model whereby customers can trade with each other,
typically in an online environment. Two implementations of C2C markets are auctions and
classified advertisements. C2C marketing has soared in popularity with the arrival of the internet
and companies such as eBay, Betsy, and Craigslist.

Merits of C2C

 Increased Profitability – In the C2C ecommerce business model, there are no

intermediaries involved. This lowers the cost of the product or service being offered,
which increases profitability. C2C sellers do not need to worry about extra costs
associated with the rent of a physical store, staff salaries, website hosting, marketing, or
use of third parties for product distribution. The C2C ecommerce marketplace facilitates

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 direct communication and transactions between the seller and the buyer, without hidden
costs.
 Increased Customer Base – With a brick and mortar store, the number of visitors and
potential customers walking in (physically or electronically) depends on chance, shop
proximity or convenience, adequate promotion, marketing, and customer loyalty.
However, with a C2C ecommerce marketplace “stall,” the probability of getting visits
and transactions is much higher, as visitors go to that platform to look for the specific
products and services offered there. In addition, the online aspect of the C2C ecommerce
marketplace means that your products and services are accessible to a worldwide
audience, thus increasing the number of chances for conversion.
 Lower Prices – Given that sellers can avoid the costs of intermediaries, the offered
products and services can be more affordable for buyers.
 Abundance of Choice – Having many sellers offering specific products or services
gathered in the same virtual space means more options for potential buyers to choose
from. Criteria such as quality, price, customization, delivery method, time, regular
supply, and so on, can be prioritized to find what’s best for the buyer. Buyers have the
ability to find exactly what they are looking for, which boosts satisfaction and the feeling
that they are getting their money’s worth.
 Faster Service – The abundance of choice gathered on one platform and the absence of
intermediaries can lead to faster transactions, streamlining the service and saving time.
 Security – Depending on the policy of the platform, security measures and background
checks may be implemented to protect buyers from potential scammers acting as sellers.
Demerits of C2C
 Competition – Being in a marketplace where many sellers are providing a similar
product or service can be daunting for some sellers or business owners, especially when
they must compete with products and services of lower price, better reviews, or higher
quality.
 Payment Issues – Depending on the marketplace platform provider, there may or may
not be a guarantee of payment for the transactions made. There have been complaints
from C2C ecommerce sellers that customers have scammed them, and depending on the
platform’s policy, it might be difficult to dispute and resolve the issue.
 Platform Fees – Some platform providers might charge sellers (and occasionally buyers)
for the use of the platform, on a standard, reoccurring fee, or a profit percentage basis.
D. G2B
Government-to-business (G2B) is a relationship between businesses and government,
where government agencies of various levels provide services or information to a
business entity via government portals or with the help of other IT solutions.
Such assistance from the government bodies’ side aims to facilitate swift and smooth
business operations, as well as a fair and transparent environment to do business.
The range of the G2B services is broad. Below, you can see just a few of them:
 Online information and advisory services
 Government contracting
 Digital procurement marketplaces
 Business licenses, permits, and regulation updates
 Electronic auctions

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 Tax, social insurance payments, and reporting
Merits of G2B
Speed
Technology makes communication swifter. Internet, smartphones have enables instant
transmission of high volumes of data all over the world.
Saving Costs
A lot the Government expenditure goes towards the cost of buying stationery for official
purposes. Letters and written records consume a lot of stationery. However, replacing
them with smartphones and the internet can saves crore of money in expenses every year.
Transparency
The use of e-governance helps make all functions of the business transparent. All
Governmental information can be uploaded onto the internet. The citizen’s access
specifically access whichever information they want, whenever they want it, at the click
of a mouse, or the touch of a finger.
However, for this to work the Government has to ensure that all data as to be made public
and uploaded to the Government information forums on the internet.
Accountability
Transparency directly links to accountability. Once the functions of the government are
available, we can hold them accountable for their actions.

Demerits of G2B
Loss of Interpersonal Communication
The main disadvantage of e-governance is the loss of interpersonal communication.
Interpersonal communication is an aspect of communication that many people consider
vital.
High Setup Cost and Technical Difficulties
Technology has its disadvantages as well. Specifically, the setup cost is very high and the
machines have to be regularly maintained. Often, computers and internet can also break
down and put a dent in governmental work and services.
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 Illiteracy
A large number of people in India are illiterate and do not know how to operate
computers and smartphones. E-governance is very difficult for them to access and
understand.
Cybercrime/Leakage of Personal Information
There is always the risk of private data of citizens stored in government serves being
stolen. Cybercrime is a serious issue, a breach of data can make the public lose
confidence in the Government’s ability to govern the people.

Q. Discuss the following

a. Electronic data interchange
b. Drivers of ecommerce
c. World Wide Web
d. Browsers and URL
e. Wireless application protocol
F. voice over IP
Ans. a. Electronic data interchange
Electronic Data Interchange (EDI) is the electronic interchange of business information
using a standardized format; a process which allows one company to send information to
another company electronically rather than with paper. Business entities conducting
business electronically are called trading partners.
Many business documents can be exchanged using EDI, but the two most common are
purchase orders and invoices. At a minimum, EDI replaces the mail preparation and
handling associated with traditional business communication. However, the real power of
EDI is that it standardizes the information communicated in business documents, which
makes possible a "paperless" exchange.
The traditional invoice illustrates what this can mean. Most companies create invoices
using a computer system, print a paper copy of the invoice and mail it to the customer.
Upon receipt, the customer frequently marks up the invoice and enters it into its own
computer system. The entire process is nothing more than the transfer of information
from the seller's computer to the customer's computer. EDI makes it possible to minimize
or even eliminate the manual steps involved in this transfer.

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b. Drivers of ecommerce
The evolution and growth of e-commerce can be attributed to a combination of
technological, marketing and economic forces. Let us discuss some of the driving forces
of e-commerce.
Economic forces that drives e-commerce
1. E-commerce enables businesses to interact with suppliers, customers and with players
in the distribution channel at a lower cost.
2. The cost of installing and maintaining a website is much cheaper than owning a
physical store. This motivates the growth of e-commerce.
3. E-commerce generates greater profits due to less human intervention, lower overhead
cost, few clerical errors and more efficiency.
Technological forces that drives electronic commerce
1. Technological advances have made business communication faster, easier, economical
and efficient. It has enabled the business to switch over from the local market to the
global market.
2. The growing popularity of cyber cafes has created a big role in attracting internet
population towards e-commerce.
3. Technological changes have given confidence to consumers to make electronic
payments in settlement of financial obligations.
Market forces that drives electronic commerce
1. Business organizations are able to reach international markets by using electronic
medium for enhanced customer support and service.
2. E-commerce enables customers to make product comparison, place orders, track orders
and make payments at ease. Due to convenience, customers prefer to purchase their
desired goods or services over internet in the online marketplace.
3. E-commerce also allows the customers to choose and order products according to their
personal and unique specifications. It paves way for mass customization.
4. The growing internet population stimulates business to switch over from an additional
business to e-business.
5. The great variety of commodities available online and reliable payment methods are
regarded as contributors to the increase of e-business.

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c. World Wide Web
The World Wide Web (WWW), commonly known as the Web, is an information system
enabling documents and other web resources to be accessed over the Internet.[1]
Documents and downloadable media are made available to the network through web
servers and can be accessed by programs such as web browsers. Servers and resources on
the World Wide Web are identified and located through character strings called uniform
resource locators (URLs). The original and still very common document type is a web
page formatted in Hypertext Markup Language (HTML). This markup language supports
plain text, images, embedded video and audio contents, and scripts (short programs) that
implement complex user interaction. The HTML language also supports hyperlinks
(embedded URLs) which provide immediate access to other web resources. Web
navigation, or web surfing, is the common practice of following such hyperlinks across
multiple websites. Web applications are web pages that function as application software.
The information in the Web is transferred across the Internet using the Hypertext
Transfer Protocol (HTTP).

d. Browsers and URL

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 A browser is an application program that provides a way to look at and interact with all
the information on the World Wide Web. This includes Web pages, videos and images.
The word "browser" originated prior to the Web as a generic term for user interfaces that
let you browse (navigate through and read) text files online. Many people will use web
browsers today for access to the internet and is seen almost as a necessity in how many
navigate their daily life.
 A Web browser is a client program that uses HTTP (Hypertext Transfer Protocol) to
make requests of Web servers throughout the Internet on behalf of the browser user. Most
browsers support e-mail and the File Transfer Protocol (FTP), but a Web browser is not
required for those Internet protocols and more specialized client programs are more
popular.

URL stands for Uniform Resource Locator. A URL is nothing more than the address of a
given unique resource on the Web. In theory, each valid URL points to a unique resource.
Such resources can be an HTML page, a CSS document, an image, etc. In practice, there
are some exceptions, the most common being a URL pointing to a resource that no longer
exists or that has moved. As the resource represented by the URL and the URL itself are
handled by the Web server, it is up to the owner of the web server to carefully manage
that resource and its associated URL.

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 e. Wireless Application Protocol

WAP stands for Wireless Application Protocol. It is a protocol designed for micro-browsers
and it enables the access of internet in the mobile devices. It uses the mark-up language WML
(Wireless Markup Language and not HTML), WML is defined as XML 1.0 application. It
enables creating web applications for mobile devices. In 1998, WAP Forum was founded by
Ericson, Motorola, Nokia and Unwired Planet whose aim was to standardize the various
wireless technologies via protocols.
WAP protocol was resulted by the joint efforts of the various members of WAP Forum. In
2002, WAP forum was merged with various other forums of the industry resulting in the
formation of Open Mobile Alliance (OMA).

f. Voice over IP
Voice over Internet Protocol (VoIP), is a technology that allows you to make
voice calls using a broadband Internet connection instead of a regular (or
analog) phone line. Some VoIP services may only allow you to call other people
using the same service, but others may allow you to call anyone who has a
telephone number - including local, long distance, mobile, and international
numbers. Also, while some VoIP services only work over your computer or a
special VoIP phone, other services allow you to use a traditional phone
connected to a VoIP adapter.
VoIP services convert your voice into a digital signal that travels over the
Internet. If you are calling a regular phone number, the signal is converted to a
regular telephone signal before it reaches the destination. VoIP can allow you to
make a call directly from a computer, a special VoIP phone, or a traditional
phone connected to a special adapter. In addition, wireless "hot spots" in
locations such as airports, parks, and cafes allow you to connect to the Internet
and may enable you to use VoIP service wirelessly.

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 Q4 what do you understand by the term online search? How does it works?
Discuss its various methods and tools?
Ans. Online search is the process of interactively searching for and retrieving
requested information via a computer from databases that are online. Interactive
searches became possible in the 1980s with the advent of faster databases and
smart terminals.
Google Search works in three stages, and not all pages make it through each
stage:
1. Crawling: Google downloads text, images, and videos from pages it found on the
internet with automated programs called crawlers.
2. Indexing: Google analyzes the text, images, and video files on the page, and stores the
information in the Google index, which is a large database.
3. Serving search results: When a user searches on Google, Google returns information
that's relevant to the user's query.
Crawling
The first stage is finding out what pages exist on the web. There isn't a central registry
of all web pages, so Google must constantly look for new and updated pages and add
them to its list of known pages. This process is called "URL discovery". Some pages
are known because Google has already visited them. Other pages are discovered when
Google follows a link from a known page to a new page: for example, a hub page, such
as a category page, links to a new blog post. Still other pages are discovered when you
submit a list of pages (a sitemap) for Google to crawl.

Once Google discovers a page's URL, it may visit (or "crawl") the page to find out
what's on it. We use a huge set of computers to crawl billions of pages on the web. The

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program that does the fetching is called Googlebot (also known as a crawler, robot, bot,
or spider). Googlebot uses an algorithmic process to determine which sites to crawl,
how often, and how many pages to fetch from each site. Google's crawlers are also
programmed such that they try not to crawl the site too fast to avoid overloading it. This
mechanism is based on the responses of the site (for example, HTTP 500 errors mean
"slow down") and settings in Search Console.
Indexing
After a page is crawled, Google tries to understand what the page is about. This stage is
called indexing and it includes processing and analyzing the textual content and key
content tags and attributes, such as elements and alt attributes, images, videos, and
more.
During the indexing process, Google determines if a page is a duplicate of another page
on the internet or canonical. The canonical is the page that may be shown in search
results. To select the canonical, we first group together (also known as clustering) the
pages that we found on the internet that have similar content, and then we select the one
that's most representative of the group. The other pages in the group are alternate
versions that may be served in different contexts, like if the user is searching from a
mobile device or they're looking for a very specific page from that cluster.
Google also collects signals about the canonical page and its contents, which may be
used in the next stage, where we serve the page in search results. Some signals include
the language of the page, the country the content is local to, the usability of the page,
and so on.
The collected information about the canonical page and its cluster may be stored in the
Google index, a large database hosted on thousands of computers. Indexing isn't
guaranteed; not every page that Google processes will be indexed.
Serving search results
When a user enters a query, our machines search the index for matching pages and
return the results we believe are the highest quality and most relevant to the user's
query. Relevancy is determined by hundreds of factors, which could include
information such as the user's location, language, and device (desktop or phone). For
example, searching for "bicycle repair shops" would show different results to a user in
Paris than it would to a user in Hong Kong.

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Methods of online Search
Using Keywords
Keywords - Create a list of ways that people might talk about the topic you
wish to search. Experiment with different combinations of keywords.
Brainstorm the main ideas or concept of a topic to determine the keywords. Try
to think of the different words that people might use to talk about (or write
about) your topic. Don't give up if the first few combinations of words don't
work.

Boolean Operators
Boolean Operators are a set of algorithms designed to connect and define the
relationship between your search terms. These Operators are used by today's
search engines. They are also used by library OPACs to search for library
resources and by electronic journal databases such as EBSCO Host, Gale,
Informit, JSTOR, ProQuest etc.
Boolean operators are used to either narrow or broaden your record sets.

AND Operator
The AND operator works by finding only webpages that have all the entered
words on the same web page but not necessarily together.
Using our example of endangered birds, the search will return only those
pages where both of the words endangered AND birds appear as shown in the
Venn diagram above.
Google and other search engines work on the assumption you are using the

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 AND operator when your use two or more terms in your search next to each
other. This means you no longer have to type AND, in capitals, in your
searches.

This means that the MORE search terms you use, the more refined your search
will be.

Note: When using the AND operator, you only receive pages including all of
your search terms, though not necessarily when those terms occur next to one
another.

OR Operator
Using the OR operator EXPANDS your search. When using OR, you only
receive pages containing either one or both of your search terms.
Eg. endangered OR birds.

NOT Operator Using the NOT operator narrows or refines your search. When
using the NOT operator you receive pages including only the first term and not
the other.
Eg. endangered NOT birds.

Q5. Differentiate between online business and brick and mortar store .Discuss the merits
and demerits of each.

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Ans.1. LOCATION
E-commerce does not necessarily include a physical store; they sell their products through online
shopping, virtual carts, and websites. A digital literate can easily purchase almost anything
online, and a person who does not know much about operating or purchasing things online can
learn it as well. Orders are entered, and the goods are then mailed or delivered to the customers.

Brick and mortar, on the other hand, have physical stores, addresses, and locations. There is
either a single outlet or multiple chains of stores.

2.MARKETING STRATEGIES
Promotion is a very important Digital Marketing Tools for both physical stores and e-
commerce as it fosters growth and helps in expansion. However, due to the difference in the way
they operate, there are prominent differences in the way marketing is done. The brick and mortar
shops usually use traditional forms of advertising such as newspaper, flyers, banners, and
billboards.
E-commerce companies use online methods such as digital advertising through emails, social
media retailing platforms, and broadcasting on television. The reason for using digital space for
promotion is that it is more effective, price-efficient, and reaches a greater audience while
making a significant impact.

3.SALE TRANSACTIONS
How companies deal with accepting payments has changed over the years. However, many brick
and mortar stores still resort to traditional methods like cash and debit and credit cards for a legal
way of transaction.

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On the other hand, e-commerce outlets offer many payment options such as cash on delivery
(COD), net banking, debit and credit cards, and mobile apps like Google pay or Apple pay. This
makes the whole process of transaction easier, convenient, safe, and cashless.

However, physical stores have also started to resort to various online digital methods for
payments. Therefore, flexibility has led to more structural capabilities for them.

4.CUSTOMER ATTENTION

As customers are the assets for any company, customer services, and proper attention to them are
vital for companies. In a brick and mortar store, the salespersons or the store in charge can easily
clear any doubt of shoppers and assist the customer without any delay. The face-to-face
interaction with the customers also increases loyalty and trust.

On the other hand, e-commerce businesses lack this advantage, and the only way they can cater
to the needs and attention of hundreds and thousands of customers on time is through phone,
email, or chat boxes

5.OPERATIONAL EXPENSES

While one might think that the operating expenses of e-commerce companies are lesser than that
of brick and mortar shops, this might not always be the case. The expenses of e-commerce can
include huge shipping charges, infrastructure charges, costs of new customer acquisition, or the
growing costs of web hosting.

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Even though a brick and mortar store might have to bear the expenses of rent, salaries, inventory
warehousing, or property taxes, it’s still cheaper than the operating costs of an e-commerce
business.

Nevertheless, the expenses of the companies depend on a variety of factors influencing it.
Additionally, all these factors must be taken into consideration.

MERITS OF ONLINE BUSINESS

Cheaper start-up cost

For new business owners, overhead costs can be overwhelming and it may impact your financial
health negatively. However, high start-up and overhead costs only occur if you are planning to
open a brick-and-mortar business. Online businesses, on the other hand, only require you to
purchase a domain name and hosting packages. You may incur extra cost to hire a professional
web designer to design an elegant and professional-looking website for your business. Alexander
Reichmann, iTestCash, pointed out “It also saves us money on taxes and rent that we would have
to pay for a storefront.” Thus, online businesses are comparatively cheaper than brick-or-mortar
businesses in term of start-up cost and overhead expenses.

Low Marketing Cost

The internet is a cost-effective tool. There are numerous online platforms you can utilize to
market your product such as online advertising and social media. Online advertising is relatively
affordable and it allows you to track your communication value. This means you can identify
which advertising message is working and which isn’t. One way to advertise your product online
is through social media such as Facebook, Twitter, and Instagram. Social media is known to be a
very powerful tool to increase product awareness because customers tend to spend a significant
amount of time surfing there. Regarding ads, Andrew Legrand, SperaLawGroup, mentioned that
a great “advantage of doing business online is the business’ ability to target its audience with
online advertising and converting that audience into paying customers. This means that
marketing efforts can be more efficient with regards to time and money, and the business’
customer base is expanded beyond the local audience.”

Flexibility

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Unlike traditional brick-and-mortar businesses where someone has to be present in the store at all
times, online businesses allow you to run your company from anywhere, anytime. Thus, online
businesses give you that work-life balance. Brady Keller, Atlantic.Net, added “[the] benefit of an
online store is that you can operate 24 hours a day, 7 days a week. Since your retail store is
virtual, you can potentially be making money while you sleep.” Hence, the flexibility of online
businesses can be translated into flexible location and time of doing business.

International Market

One of the significant impacts of the internet is globalization. Online businesses can facilitate the
demand from global consumers by allowing business owner like yourself to sell your product
internationally without setting up the physical vendor in that region. Najeeullah Babar, Interloper
Inc., said: “It expands your reach from local to national and international no matter how small a
company you are.” Another unique advantage of online business is that you can set your website
in different languages to accommodate people from different locations. Therefore, online
businesses allow you to capture a wide range of customers globally.

DEMERITS OF ONLINE BUSINESS

Website building and maintenance can be costly:

Even if operating a business online might save money over the long run, the implementation
process is different. Since a professional must create and maintain the website, the firm must be
prepared to handle significant start-up costs.
The company would need to initially invest in hosting, search engine optimization, web
developers, designers, and photographers to click good quality photographs of the product. This
will increase the overall expenses.

Technical errors can lead to losses:

The biggest e-commerce drawback is when your site crashes and no one can purchase anything
from your business. Making ensuring your website is hosted on the appropriate platform is
crucial for this reason.
Thankfully, e-commerce platforms like Shopify include free hosting as part of their monthly
subscription, giving you access to some of the best servers available. There has only ever been
one instance of a website being down recently. But not just e-commerce websites were impacted.
This collapse had an impact on sites including Twitter, Spotify, and Soundcloud, among others.
The problem was fixed that day.

Competition:
Due to the intense rivalry present in the online marketplace, operating an online business is not
simple. The major corporations are always coming out with cheaper items, better advertising,
and promotions, all of which can steal your customers from you. The company might suffer
significant losses if the right business plan is not executed.
Try ranking organically with search engine optimization if your rivals are using Facebook
advertisements to target all of your consumers. If your advertisements are pricey, you may direct
traffic to blog entries and use the information about your visitors to develop cheaper ads.
Working on CRO efforts can help you outperform your customers in terms of success.

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MERITS OF BRICK AND MORTAR STORE

 With a physical location you are able to have face-to-face interaction with
customers. This allows for greater relationship building which leads to customer
loyalty.
 You better legitimize your brand. Having a physical location gives your customer
more piece of mind when purchasing. Instead of being a website that they found on
Instagram, your physical location gives customers more security knowing that they
can go back to your location if they are not happy with their purchases.
 It establishes a physical presence in the communities. Having a community
presence can be useful for getting your company out there, especially if you’re
trying to attract new customers or increase sales from existing ones.
 Consumers are happy to get their products quickly. They don’t have to wait for
shipping to get what they need. Plus, if you’re selling products typically sold online
(such as books), setting up a physical store may give you an advantage over your
competitors.

DEMERITS OF BRICK AND MORTAR STORES

 Operating a physical store requires high costs, including staffing, inventory,

marketing, and other expenses.
 Brick-and-mortar businesses are limited by the size of their physical footprint.
Physical stores have a finite amount of space and can only accommodate so many
products. You may also need to hire employees, which adds to your overhead
costs.
 With a physical store, you must maintain a constant flow of customers to keep your
business profitable. Maintaining a constant flow can be challenging because it’s
difficult to predict how many customers will visit your store on any given day.
 There are higher maintenance costs. The state of a store’s appearance and facilities
is extremely important when providing customers with good service.
 A business’s appearance reflects its owner’s attention to detail. The appearance
matters whether the business provides services in someone else’s home or on their
premises.
 Business owners must pay for property, liability, and other types of coverage to
keep their companies running smoothly.

Q6.What is a business plan? How do you launch an online business plan ? Discuss the
various phases involved in building an online business.
Ans.A business plan is a document that summarizes the operational and financial objectives of a
business. It is a business's road map to success with detailed plans and budgets that show how
the objectives will be realized.
Keep reading to learn the basic components of a business plan, why they're useful, and how they
differ from an investment plan.

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What Is a Business Plan?
A business plan is a guide for how a company will achieve its goals. For anyone starting a
business, crafting a business plan is a vital first step. Having these concrete milestones will help
track the business's success (or lack thereof). There are different business plans for different
purposes, and the best business plans are living documents that respond to real-world factors as
quickly as possible.
STEPS TO LAUNCH AN ONLINE BUSINESS PLAN
1. Develop your business plan
When considering how to start an online business, it can be tempting to take immediate action.
Therefore, if you’re tempted to develop a website, choose a business name, or design a logo,
refrain for the time being.
If you want to launch a profitable internet business, you must first develop a strategy.
2. Validate your business idea
While this may sound harsh, it is true: just because you believe you have a fantastic concept does
not guarantee a market for it. Before putting your time and energy into launching your business,
conduct research to determine its viability and possible buyer interest.

Consider the following steps for identifying your best-fit market niche:
1. Look for a problem to tackle: Every successful firm was founded to address a specific
issue. Consider an activity that you wish was simpler and utilize it to inspire your
business concept. Inquire of family, friends, or coworkers about any daily duties that
frustrate them to generate additional ideas.
2. Emphasize your strengths: Consider what you enjoy doing and what you are good at.
Create a list of your abilities and skills and use them to build a firm that can survive even
the most fierce competition.
3. Concentrate on whom you wish to sell to: Rather than on the product you want to
create, consider the type of customer you want to attract. By reorienting your thoughts in
this manner, you might increase your chances of tapping into a specific market.
4. Connect with your network: Communicate with your friends, family, and coworkers
and solicit feedback and suggestions. Please inquire about the assets and attributes they
perceive in you. In this manner, you may come across concepts that you previously
overlooked.
5. Fill in the gaps: You are not required to develop a new company idea. Concentrate on all
of the leading businesses in a particular industry and identify any services that they are
missing. Determine whether you can fill those gaps.

3. Be familiar with your competitors

The sheer presence of competition – contrary to popular belief – is an excellent indication for
new businesses. The competition evaluates the market and ensures that the niche is profitable.
What you should do now is study your competitors and the things they can teach you.

Here is an example of what you could do:

 Determine your direct competitors.
 Discover who the niche’s “rock stars” are.

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  Determine who the more prominent players are who may not directly target the niche but
produce revenue.
 Take note of the aspects of their approaches that you admire and despise.
 Make a note of the aspects of their websites that you like and dislike.
 Consider how you can mimic their techniques as you begin your online venture.
 Determine which is their specific consumer base — to the best of your ability.
This may all seem strange at first, so let’s clarify one thing. The objective here is not to emulate
your opponent and do exactly what they do. Instead, you can leverage the work they’ve done to
establish their businesses and attempt to incorporate some of their best practices into your own.

4.Create a new product or service

You’ve proven your business concept; now it’s time to bring it to life. Regardless of whether
you’re selling a product or a service, you must first develop it. Track down a manufacturer to get
your product to life, package your service offers, or write your book and research self-publishing
options.

If you choose dropshipping, the product is already developed for you. It is entirely up to you to
select products about which you are passionate or for which you have recognized a lucrative
market.

PHASES INVOLVED IN BUILDING ONLINE BUSINESS

The Planner Phase is the phase where you create an overall vision and strategy for your
business. You can’t start building until you’re prepared, so you need to have an overview of what
you plan to build for the long term. That’s what you’re creating in this phase. Think of this as
creating the blueprints for your business. You’re creating a business plan that you’ll be able to
use when you go to actually build it.

A lot of people skip this step or skip important parts of this step, like market research. That
makes about as much sense as trying to build a house without taking the time to create
blueprints. You wouldn’t build a house without blueprints, so don’t start building your business
without taking the time to create a business plan.

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The good news is that unlike when you’re building a house, your initial attempts at a business
plan can and almost certainly will be wrong.Your goal during the planner phase isn’t to be
perfect, it’s to get a plan in place that you can start to execute and test.

Once you have the plan, you move to the builder phase. In this phase, you create the basic
conversion and customer experience machines for your business.

What you’re doing is you’re preparing your business for traffic.

You’re not yet sending traffic to your business or trying to get people’s attention because you
need to get your business ready first. You also don’t have a scaled product or service to offer just
yet.

Maybe you have an idea of what you want to create, but until you’ve built an audience,
interacted with them, worked with them, nurtured them, and had meaningful conversations, you
shouldn’t have any kind of scaled product at this point.

Instead you’ll create your first “Buy Anytime” product in the form of a smaller offer (think
eBook or template) or a 1-to-1 offer that allows you to work directly with your people.

Whatever the simplest offer you can create and start selling the fastest is your first “Buy
Anytime” offer. Primarily, you’ll focus on creating your website and optimizing it to convert,
create your lead magnet, and create your email marketing basic sequences.

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After you’ve done the work in the building phase, you move to the Recruiter Phase.

In this phase, the problem you’re tackling is getting enough people to see
your conversion elements (e.g., free resources, buy anytime product) and to build your audience
to a size that you’re ready to create a scaled product.

This is where you’re building your traffic machine.You need to figure out your social media
marketing, content marketing, and paid ads to help you drive traffic and attract your target
audience to join your list effectively.

At this point, you’re preparing your business to scale because you’re getting feedback by
watching what works and what doesn’t as you’re building your list. You’ll also see which key
messaging elements seem to convert while others don’t.

It’s also a learning phase because you’re going to learn a lot… if you’re paying attention to your
people, the numbers in your business, and the feedback they’re giving you.

You don’t move out of the recruiter phase until you have at least a thousand people on your
list. And yes, a thousand people on your list is generally an important threshold because it
usually indicates that you now have an audience to speak to and something is starting to work.
(There are very few exceptions to this rule.) Once you get to this point, you can talk to your
potential customers and get the feedback you need to potentially launch a scaled product that will
actually work.

Phase Four: The Scientist Phase

When you’ve got things running in your new business, you move to the Scientist Phase.

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This is where you figure out and create a scaled model for your business. It could be a product
like a course or a membership. It could be an agency model if you’re building a service
business. We call this phase the scientist phase because this is a phase of experimentation.

You try things out, see what works, you learn, and then you iterate. Now it’s important to
understand that when you reach this phase, you have to be ready to be wrong.

Even if you’ve done the work in the previous phases, it’s still possible that you won’t get things
right the first time you try to create a scaled product. So, you need to continue to iterate and
experiment until you find what really works.

Phase Five: The Banker Phase

The Banker Phase is when you start to tackle money issues more seriously.

Up until this point, you’ve likely been a solopreneur or have had one VA on your team to help
you get work done. But now it’s time to start thinking of building in financial stability.

This is about the time that you have to deal with more complex financial management and
become laser focused to create long-term financial stability for the business and yourself.

In this phase, you’re working on growing your revenue enough so that it can cover your lifestyle,
wants, and needs now and in the future.

Phase Six: The Leader Phase

The Leader Phase is where you focus on unplugging. This is the phase where you’re whittling
down what it is you spend your time on while you delegate everything else to your team.

This is also where you can identify bottlenecks and address them so that you create a cohesive
team that works efficiently in their areas of responsibilities. Bottlenecks can show up in
workflows, but they can also show up in your marketing, sales, and fulfillment strategies.

Identifying them will help you continue to iterate and improve on them, making it much easier
for you to continue to unplug from areas you don’t need to be responsible for anymore.

Once you’ve hired someone to take over an area of responsibility, you can unplug from that area
and start focusing on higher-level areas that only YOU can be responsible for. Building a team
that can support your vision in the areas you need to unplug from is a difficult (but rewarding!)
task. But once you find people who fill in skillset gaps that you have, you’ll be able to
accomplish so much more than you ever could on your own. Essentially, you’re becoming a

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leader in your business. This takes a lot of focus on personal and professional growth and the
destruction of ego.

Q7.Define website. What are its features? Explain the various steps involved in building a
website. Also discuss the criteria for a good design.
Ans.A website (also written as a web site) is a collection of web pages and related content that is
identified by a common domain name and published on at least one web server. Websites are
typically dedicated to a particular topic or purpose, such as news, education, commerce,
entertainment or social networking. Hyperlinking between web pages guides the navigation of
the site, which often starts with a home page. As of December 2022, the top 5 most visited
websites are Google Search, YouTube, Facebook, Twitter, and Instagram.
All publicly accessible websites collectively constitute the World Wide Web. There are also
private websites that can only be accessed on a private network, such as a company's internal
website for its employees. Users can access websites on a range of devices,
including desktops, laptops, tablets, and smartphones. The app used on these devices is called
a web browser.

FEATURES OF WEBSITE
1. Easy Navigation Is the Most Useful Website Feature
People prefer websites that are easy to use and navigate.Almost everyone (94%) believes easy
navigation is the most useful website feature.To determine which website features people
consider useful, we combined responses for respondents who selected either “extremely” or
“somewhat” useful. If survey respondents rated a feature as “slightly” or “not at all” useful, we
did not consider their responses in our tally.
A website that’s easy to navigate provides users with faster, more efficient access to content they
want.People prefer a website with a clear menu structure that makes it easy to maneuver between
pages. Amazon is known for being easy to navigate, despite its high volume of content.
2. A Trendy Appearance Means Website Engagement

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Trendy web design elements can attract your target audience to your site. Beautiful and
appealing designs enhance website content and establish a good reputation for your brand.
Most people (83%) think that a beautiful and updated appearance on a website is useful.

That’s important, however, for businesses to prioritize the user if they redesign their website.
People appreciate beautiful and updated designs, but not when the trendy design interferes with
their ability to use the website and access the content they need.

3 Popular Web Design Styles

Three of the most popular web design styles are:

 Flat Design: Removing drop shadows, gradients, and other textures to make objects
appear two-dimensional
 Skeumorphic Design: Making digital elements resemble their counterparts in the
physical world so they look more familiar
 Rich Design: Making elements feel more tactile, three-dimensional, and usable to people
navigating a website

3. Website Content Must Establish Brand Authority

People visit websites to access content. Accurate content tailored to a specific audience
establishes brand authority for businesses.

Half of people (50%) will leave a website permanently if the content is irrelevant.

More website users will leave a site permanently because of irrelevant content than because of
elements that interrupt content, such as advertisements (35%) or unintuitive design (28%).

3 Main Types of Website Content

There are three main types of content that you will find on a business website:

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  Basic Company Information: A company “About Us” page or external links to a
company’s social media profiles
 Product Descriptions and Visuals: Text or images that showcase a company’s main
offerings
 Blogs: Long-form written or video content that discusses current business trends,
company news, or other insights

4. Product Visuals and Descriptions Are Equally Important

Consumers think product and services visuals and descriptions are equally useful when they visit
a company’s website.

Nearly everyone (91%) believes both descriptions and images are useful when browsing a
website.

This indicates that consumers are looking for both attractive and informative content when
browsing company websites. Businesses should make sure to remember that visuals are a key
website feature that shouldn’t be ignored.

What Makes a Website More Attractive?

In order to find the right balance between informative and visual content, companies should
contemplate how to create an attractive website design.

Steve Vest is the senior user experience designer at Small Footprint, a software development
company in Winston-Salem, N.C. He finds that these simple features make websites more
inviting to customers:

 White space: unmarked design space on a web page that remains blank or white when
published
 Large images: combined with whitespace, large images naturally break a page up into
skimmable parts

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8 Steps for Creating a website include

Step 1. Choose a domain name

The very first step you’ll want to take when it comes to creating a website is determining what
domain name you want for your website, because before you can create a website/blog, your
hosting company will ask you to decide on what the name of your website and URL (domain
name) will be.

This is one of the most important steps you will make because as you begin to build content on
your website, everything you create will be linked to your website’s domain name (URL), and
your visitors will also know you by the domain name you choose. Some people choose a domain
name that relates closely to and resonates with their website’s main topic and is likely to be
searched for under a specific keyword or search term.

Step 2. Register your domain name/URL

After you’ve decided on a domain name and have found one available to use, there are several
registering services that will allow you to register your chosen domain name, often for minimal
cost, $10 – $20 per year.

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For the sake of speeding things up and to save you some money, there is a variety of hosting
services, such as Bluehost, that will give you a free domain name with your hosting account,
which can make setting up your website easier and save you a few dollars.

We use and recommend Bluehost as they provide several useful features and automatically link
your domain name to your hosting service so that you don’t have to go through the confusing
and time-consuming process of talking to multiple companies have your domain name and
hosting linked together.

Step 3. Choose a hosting service

After deciding on your domain name and getting it registered, the next step you’ll need to take is
finding a hosting service that will host your website.

One of the best hosting services I have found and use for my websites is BlueHost, which
offers tons of hosting space, a free domain name for your first site, great customer service, and a
99.9% up-time guarantee (at time of writing).

Step 4. Connect your domain name to your web host

If you have chosen a web host that offers a domain name with their hosting service, you can skip
this step as most hosting services will make it easy for you to connect your domain name to your
hosting service and walk you through the steps to create your website.

Our 3 Part Visual Guide For Creating A Website In 15 Minutes can walk you through the
process (which is very easy) using images so that you don’t get lost or confused.

If you have chosen a registrar different from your web hosting service, you’ll need to connect
your domain name with your web host. To connect your domain name with your web host, all
you have to do is ask your web host for your server name or DNS and plug your DNS into your
domain name registrar account.

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Step 5. Install WordPress

After you’ve chosen your domain name and created a hosting account, you’ll need to install
software that will allow you to manage, customize, and build your website as you like. Whether
you want to create a blog, start an online business, or build an e-commerce site, WordPress is a
great choice for helping you run the back end of your website.

Not only is WordPress free, but it’s also one of the best all-around software platforms available
for creating websites, starting blogs, and building a business.

The WordPress software that will power your website is extremely flexible, highly customizable,
simple to navigate, and easy to learn. In fact, this software powers some of the most well known
and respected websites on the internet.

Step 6. Choose a theme for your website

There are many free and premium (paid) themes available for WordPress that allow you to
choose a design that suits your website’s look and functionality.

While many of the free themes available offer you a degree of design and functionality, the
premium themes are often more professional looking and give you much more flexibility in
customizing your website, and can often be purchased for less than $100.

Step 7. Configure your website

Now that your website is up and running and you’ve chosen your theme, you’ll want to
configure your website so that you provide the best experience for your visitors.

Set up your navigation and make it easy for your visitors to know what your website is about and
give them easy access to the most important parts of your website.

Choose two or three primary colors to represent your site but don’t go overboard as too many
colors can turn off your visitors or detract them from what is important.

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Step 8. Add content

If you’ve made it to this part, congratulations, you’re all set.

Now you get to have fun and start adding content to your website!

If you’ve made it this far, then hopefully, our step by step directions on how to create a
website/blog has helped you get started with your own

CRITERIA FOR GOOD WEB DESIGN

 Website purpose
 Simplicity
 Navigation F-shaped pattern reading
 Visual hierarchy
 Content
 Grid based layout
 Load time
 Mobile friendly

Q8. Elaborate the term one to one marketing. Discuss its steps of implementation.
Ans.One-to-one marketing or 1:1 marketing is a strategy that emphasizes having an
individualized experience with customers. The personalization of interactions is thought to
improve customer loyalty and have a high return on marketing investment.

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One-to-one is not necessarily a new concept. The one-to-one approach is about as old as business
itself. Since the birth of commerce, store owners have remembered details about their customers
to use that knowledge to improve service and boost sales.

1:1 marketing campaigns can be “a segment of one,” instead of having to segment consumers
into a group and send them all the same message, you can now deliver marketing material that
appears unique to the individual.

How? Well, there’s plenty of ways of going about this. Using a CRM to reach out to an
individual, sending them a personalized e-mail,serving programmatic content through a
marketing automation tool, or, using video …

There are four important steps for implementing one-to-one marketing.

1. Identifying the customers:

The company must be able to locate and contact a fair number of its customers directly, or at

least a substantial portion of its most valuable customers. It is critical to know customers in as

much detail as possible. The information should contain not only names and addressable

characteristics but their habits, preferences, etc. Snapshot information is not enough. The

company should be able to recognize the customer at every contact point, in every medium used,

at every location and within every division of the company.

2. Differentiating the customers:

Customers are different in two ways. They represent different levels of value to the company and

they have different needs. Once each customer’s needs and value are found out, it is possible to

tailor the company’s behaviour to each customer in order to reflect the customer’s value and

needs.

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3. Interacting with customers:

It is important to be both cost-efficient and effective when the company is interacting with its

customers. Cost-efficiency improves by directing customer interaction towards more automated

channels. Providing information on its website would be more economical than supporting a call

centre.

4. Designing and producing a unique product:

A customer’s needs would be unique, i.e., it would be substantially different from those of other

customers. And hence the company would have to design and produce a unique solution for him.

The company would have to learn to mass customize, i.e., design and produce a unique product

for each customer at the cost of a standard product.

The company should follow modular designing to enable production of customized products

from standard components. It is tempting for a company to overlook this critical step, as it

involves investment to make the operations of the company flexible and responsive. But one-to-

one marketing will not cut much ice with customers, if the activities and processes of the

company cannot be customized to each customer.

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Q.9 What is computer network? Discuss its type with the help of example.
Ans.Computer networking refers to interconnected computing devices that can exchange data
and share resources with each other. These networked devices use a system of rules, called
communications protocols, to transmit information over physical or wireless technologies.

According to the communication requirements, multiple types of network connections are

available. The most basic type of network classification depends on the network's geographical
coverage.
Below mentioned are different types of networks:
 PAN (Personal Area Network)
 LAN (Local Area Network)
 MAN (Metropolitan Area Network)
 WAN (Wide Area Network)
Let’s look into each of the network types in detail.
1.LAN

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The Local Area Network (LAN) is designed to connect multiple network devices and systems
within a limited geographical distance. The devices are connected using multiple protocols for
properly and efficiently exchanging data and services.
Attributes of LAN Network:
 The data transmit speed in the LAN network is relatively higher than the other network
types, MAN and WAN.
 LAN uses private network addresses for network connectivity for data and service
exchange, and it uses cable for network connection, decreasing error and
maintaining data security.

2.MAN

The Metropolitan Area Network (MAN) is a network type that covers the network
connection of an entire city or connection of a small area. The area covered by the
network is connected using a wired network, like data cables.

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 Attributes of MAN Network:
 Network covers an entire town area or a portion of a city.
 Data transmission speed is relatively high due to the installation of optical cables and
wired connections.

3.WAN

The Wide Area Network (WAN) is designed to connect devices over large distances like
states or between countries. The connection is wireless in most cases and uses radio
towers for communication.
The WAN network can be made up of multiple LAN and MAN networks.
Attributes of WAN Network:
 The speed of the WAN data transfer is lower than in comparison to LAN and MAN
networks due to the large distance covered.
 The WAN network uses a satellite medium to transmit data between multiple locations
and network towers.

4.PAN

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o Personal Area Network is a network arranged within an individual person, typically
within a range of 10 meters.
o Personal Area Network is used for connecting the computer devices of personal use is
known as Personal Area Network.
o Thomas Zimmerman was the first research scientist to bring the idea of the Personal
Area Network.
o Personal Area Network covers an area of 30 feet.
o Personal computer devices that are used to develop the personal area network are the
laptop, mobile phones, media player and play stations.

Q.10 Define network topology. Explain any 5 topologies along with diagram.
Ans.A network topology is the physical and logical arrangement of nodes and
connections in a network. Nodes usually include devices such as switches, routers and
software with switch and router features. Network topologies are often represented as a
graph.
Network topologies describe the arrangement of networks and the relative location of
traffic flows. Administrators can use network topology diagrams to determine the best
placements for each node and the optimal path for traffic flow. With a well-defined and
planned-out network topology, an organization can more easily locate faults and fix
issues, improving its data transfer efficiency.
Type of Topologies
Mesh Topology:
In a mesh topology, every device is connected to another device via a particular channel.
In Mesh Topology, the protocols used are AHCP (Ad Hoc Configuration Protocols),
DHCP (Dynamic Host Configuration Protocol), etc.

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 Advantages of this topology:
 Communication is very fast between the nodes.
 It is robust.
 The fault is diagnosed easily. Data is reliable because data is transferred among the
devices through dedicated channels or links.
 Provides security and privacy.
Problems with this topology:
 Installation and configuration are difficult.
 The cost of cables is high as bulk wiring is required, hence suitable for a smaller number
of devices.
 The cost of maintenance is high.

Star Topology:
In star topology, all the devices are connected to a single hub through a cable. This hub is
the central node and all other nodes are connected to the central node. The hub can be
passive in nature i.e., not an intelligent hub such as broadcasting devices, at the same
time the hub can be intelligent known as an active hub. Active hubs have repeaters in
them. Coaxial cables or RJ-45 cables are used to connect the computers. In Star
Topology, many popular Ethernet LAN protocols are used as CD(Collision Detection),
CSMA (Carrier Sense Multiple Access), etc.

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 Advantages of this topology:
 If N devices are connected to each other in a star topology, then the number of cables
required to connect them is N. So, it is easy to set up.
 Each device requires only 1 port i.e. to connect to the hub, therefore the total number of
ports required is N.
 It is Robust. If one link fails only that link will affect and not other than that.
 Easy to fault identification and fault isolation.
 Star topology is cost-effective as it uses inexpensive coaxial cable.
Problems with this topology:
 If the concentrator (hub) on which the whole topology relies fails, the whole system will
crash down.
 The cost of installation is high.
 Performance is based on the single concentrator i.e. hub.

Bus Topology:
Bus topology is a network type in which every computer and network device is connected
to a single cable. It is bi-directional. It is a multi-point connection and a non-robust
topology because if the backbone fails the topology crashes. In Bus Topology, various
MAC (Media Access Control) protocols are followed by LAN ethernet connections like
TDMA, Pure Aloha, CDMA, Slotted Aloha, etc.

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 Advantages of this topology:
 If N devices are connected to each other in a bus topology, then the number of cables
required to connect them is 1, known as backbone cable, and N drop lines are required.
 Coaxial or twisted pair cables are mainly used in bus-based networks that support up to
10 Mbps.
 The cost of the cable is less compared to other topologies, but it is used to build small
networks.
 Bus topology is familiar technology as installation and troubleshooting techniques are
well known.
Problems with this topology:
 A bus topology is quite simpler, but still, it requires a lot of cabling.
 If the common cable fails, then the whole system will crash down.
 If the network traffic is heavy, it increases collisions in the network. To avoid this,
various protocols are used in the MAC layer known as Pure Aloha, Slotted Aloha,
CSMA/CD, etc.

Ring Topology:
In this topology, it forms a ring connecting devices with exactly two neighbouring
devices.
A number of repeaters are used for Ring topology with a large number of nodes, because
if someone wants to send some data to the last node in the ring topology with 100 nodes,
then the data will have to pass through 99 nodes to reach the 100th node. Hence to
prevent data loss repeaters are used in the network.
The data flows in one direction, i.e.., it is unidirectional, but it can be made bidirectional
by having 2 connections between each Network Node, it is called Dual Ring Topology.

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 In-Ring Topology, the Token Ring Passing protocol is used by the workstations to
transmit the data.

Advantages of this topology:

 The data transmission is high-speed.
 The possibility of collision is minimum in this type of topology.
 Cheap to install and expand.
 It is less costly than a star topology.
Problems with this topology:
 The failure of a single node in the network can cause the entire network to fail.
 Troubleshooting is difficult in this topology.

Tree Topology:
This topology is the variation of the Star topology. This topology has a hierarchical flow
of data. In Tree Topology, protocols like DHCP and SAC (Standard Automatic
Configuration) are used.

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 Advantages of this topology:
 It allows more devices to be attached to a single central hub thus it decreases the distance
that is travelled by the signal to come to the devices.
 It allows the network to get isolated and also prioritize from different computers.
 We can add new devices to the existing network.
 Error detection and error correction are very easy in a tree topology.
Problems with this topology:
 If the central hub gets fails the entire system fails.
 The cost is high because of the cabling.
 If new devices are added, it becomes difficult to reconfigure.

Q.11 What is a Network Operating System? Discuss the following network

operating system:
a. peer to peer
b. client/server
Ans. network operating system (NOS) is a computer operating system (OS) that's
designed primarily to support workstations, PCs and, in some instances, older terminals
that are connected on a local area network (LAN).
a. Peer to peer
A Peer-to-peer network operating system is a network of computers that share
equal responsibility and control over processing data. It allows sharing of
resources in a shorter and more accessible network. All the devices in the network
architecture are similar to others in terms of their functionality, capabilities, and
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 responsibility. Every node in the network has an identical relationship with others.
No one is superior or inferior among the systems and thus does not have a master-
slave relationship.

A peer-to-peer network operating system allows multiple computers to share

resources among scanners, printers, and CD-ROMs, located in smaller
environments with not more than 25 workstations. A peer-to-peer network uses a
network adapter card to establish the connection. Network cabling and a network
hub or switch help us interconnect the computers. Each computer in a workgroup
gets treated equally, and no one is in charge of the group. Tracking user accounts
and security settings is the responsibility of each computer in the network. There
is very little security among the workgroups as it lacks any presence of a central
login system. The shared resources can get accessed by any user who has logged
in to a peer-to-peer network. A user can control sharing of resources using
passwords and the accessibility and sharing of files and folders due to the absence
of a central security system.

b. client/server
In Client-Server systems, there are two broad categories of systems:

The server is called the backend.

A client called as frontend.
Client-Server Network Operating System is a server-based Network in which
storage and processing workload is shared among clients and servers.

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 The client requests offerings which include printing and document storage, and
servers satisfy their requests. Normally all community offerings like digital mail,
printing are routed through the server.Server computers systems are commonly
greater effective than client computer systems. This association calls for software
programs for the customers and servers. The software program walking at the
server is known as the Network Operating System, which offers a community of
surroundings for server and client.
Client-Server Network was developed to deal with the environment when many
PC printers and servers are connected via a network. The fundamental concept
changed to outline a specialized server with unique functionality.

Q12.Write short note on the following:

a. I-Way
b. Internet service providers (ISP)
c. Domain name and its registration

Ans. A.I-Way
The information superhighway which is also known as ‘I-way’ refers to digital
communication systems and the internet telecommunications network that allow
us to connect, to share information, and to communicate as a global community.
The components of I-way are as follows: -
1. Network access component: -

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This component can also be called ‘Network access equipment’ or ‘customer
premises equipment’ or ‘the terminal equipment’ and it is at the end of
consumers, which enables the access to the network. The hardware components
such as computers, modems, routers, switches in case of computer networks, set-
top boxes for television networks and software platforms such as browsers and
OS are incorporated in the segment.
2. Local access component: -
This is another important component of Information Highway that can also be
called ‘Access roads or media’ or ‘Local On-Ramps’. This component provides
the communication backbone for the transmission of data and information. Local
access component creates the link between businesses, organizations, homes, and
schools with the main communication point, which is also referred as ‘last-mile’.
3. Global access component: -
To make the connection for very long distance such as across the countries and
continents we need competent infrastructure. Long distance telephone lines,
submarine communications cable, the satellite networks and the Internet resides
inside this component. This component can also be referred as global information
distribution networks.

B. Internet service providers

An Internet service provider (ISP) is an organization that provides services for
accessing, using, managing, or participating in the Internet. ISPs can be organized
in various forms, such as commercial, community-owned, non-profit, or
otherwise privately owned.
Internet services typically provided by ISPs can include Internet access, Internet
transit, domain name registration, web hosting, Usenet service, and colocation.
An ISP typically serves as the access point or the gateway that provides a user
access to everything available on the Internet.[1] Such a network can also be called
as an eyeball network.

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C. Domain name and its Registration
A domain name refers to your website address. This is what users type in a
browser's search bar to directly access your website. A domain name
is unique and cannot be shared between different sites. For example:
ovhcloud.com
Each website is identified by a unique set of numbers, called an IP address. Your
computer uses these numbers to connect to the server where the website data is
located. When visitors enter a domain name in their search bar, it sends a request
to a set of Domain Name System (DNS) servers. The DNS then responds with the
IP address of the website’s hosting server, making it accessible. Domain names
were created because IP addresses are too complicated to remember. So, for
internet users to access a website, it needs to be given a name.

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Q13. Define supply chain management..discuss its significance in E commerce.
AnsSupply chain management is the management of the flow of goods and services and includes
all processes that transform raw materials into final products. It involves the active streamlining
of a business’s supply-side activities to maximize customer value and gain a competitive
advantage in the marketplace.
It is the centralized management of the flow of goods and services and includes all processes
that transform raw materials into final product .
It is based on the idea that nearly every product that comes to market results from the efforts of
various organizations that make up a supply chain.
How Supply Chain Management (SCM) Works
Supply chain management (SCM) represents an effort by suppliers to develop and implement
supply chains that are as efficient and economical as possible. Supply chains cover everything
from production to product development to the information systems needed to direct these
undertakings.
Typically, SCM attempts to centrally control or link the production, shipment, and distribution of
a product. By managing the supply chain, companies can cut excess costs and deliver products to
the consumer faster. This is done by keeping tighter control of internal inventories, internal
production, distribution, sales, and the inventories of company vendors.
5 Parts of SCM
The supply chain manager tries to minimize shortages and keep costs down. The job is not only
about logistics and purchasing inventory.
. In SCM, the supply chain manager coordinates the logistics of all aspects of the supply chain
which consists of the following five parts.
Planning
To get the best results from SCM, the process usually begins with planning to match supply with
customer and manufacturing demands. Firms must predict what their future needs will be and act

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accordingly. This relates to raw materials needed during each stage of manufacturing, equipment
capacity and limitations, and staffing needs along the SCM process. Large entities often rely
on ERP system modules to aggregate information and compile plans.
Sourcing
Efficient SCM processes rely very heavily on strong relationships with suppliers. Sourcing
entails working with vendors to supply the raw materials needed throughout the manufacturing
process. A company may be able to plan and work with a supplier to source goods in advance.
However, different industries will have different sourcing requirements. In general, SCM
sourcing includes ensuring:
 the raw materials meet the manufacturing specification needed for the production of
goods.
 the prices paid for the goods are in line with market expectations.
 the vendor has the flexibility to deliver emergency materials due to unforeseen events.
 the vendor has a proven record of delivering goods on time and in good quality.
Supply chain management is especially critical when manufacturers are working with perishable
goods. When sourcing goods, firms should be mindful of lead time and how well a supplier can
comply with those needs.
Manufacturing
At the heart of the supply chain management process, the company transforms raw materials by
using machinery, labor, or other external forces to make something new. This final product is the
ultimate goal of the manufacturing process, though it is not the final stage of supply chain
management.
The manufacturing process may be further divided into sub-tasks such as assembly, testing,
inspection, or packaging. During the manufacturing process, a firm must be mindful of waste or
other controllable factors that may cause deviations from original plans. For example, if a
company is using more raw materials than planned and sourced for due to a lack of employee
training, the firm must rectify the issue or revisit the earlier stages in SCM.
Delivering
Once products are made and sales are finalized, a company must get the products into the hands
of its customers. The distribution process is often seen as a brand image contributor, as up until
this point, the customer has not yet interacted with the product. In strong SCM processes, a
company has robust logistic capabilities and delivery channels to ensure timely, safe, and
inexpensive delivery of products.
This includes having a backup or diversified distribution methods should one method of
transportation temporarily be unusable. For example, how might a company's delivery process
be impacted by record snowfall in distribution center areas?

Returning
The supply chain management process concludes with support for the product and customer
returns. Its bad enough that a customer needs to return a product, and its even worse if its due to
an error on the company's part. This return process is often called reverse logistics, and the
company must ensure it has the capabilities to receive returned products and correctly assign

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refunds for returns received. Whether a company is performing a product recall or a customer
is simply not satisfied with the product, the transaction with the customer must be remedied.
Types of Supply Chain Models
Supply chain management does not look the same for all companies. Each business has its own
goals, constraints, and strengths that shape what its SCM process looks like. In general, there
are often six different primary models a company can adopt to guide its supply chain
management processes.

Continuous Flow Model: One of the more traditional supply chain methods, this model is
often best for mature industries. The continuous flow model relies on a manufacturer producing
the same good over and over and expecting customer demand will little variation.
Agile Model: This model is best for companies with unpredictable demand or customer-order
products. This model prioritizes flexibility, as a company may have a specific need at any given
moment and must be prepared to pivot accordingly.
Fast Model: This model emphasizes the quick turnover of a product with a short life cycle.
Using a fast chain model, a company strives to capitalize on a trend, quickly produce goods, and
ensure the product is fully sold before the trend ends.
Flexible Model: The flexible model works best for companies impacted by seasonality. Some
companies may have much higher demand requirements during peak season and low volume
requirements in others. A flexible model of supply chain management makes sure production
can easily be ramped up or wound down.
Efficient Model: For companies competing in industries with very tight profit margins, a
company may strive to get an advantage by making their supply chain management process the
most efficient. This includes utilizing equipment and machinery in the most ideal ways in
addition to managing inventory and processing orders most efficiently.
Custom Model: If any model above doesn't suit a company's needs, it can always turn towards a
custom model. This is often the case for highly specialized industries with high technical
requirements such as an automobile manufacturer.

Significance of supply chain management :

Supply chain management is important because it can help achieve several business objectives.
For instance, controlling manufacturing processes can improve product quality, reducing the risk
of recalls and lawsuits while helping to build a strong consumer brand. At the same time,
controls over shipping procedures can improve customer service by avoiding costly shortages or
periods of inventory oversupply. Overall, supply chain management provides several
opportunities for companies to improve their profit margins and is especially important for
companies with large and international operations.

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In e-commerce :
benefits of supply chain management in e-commerce:
Reduced cost
Cost is a huge factor when it comes to e-commerce. When we consider the amount of time,
energy and money that goes into developing, producing, marketing and distributing a product,
the last thing we want to do is spend money unnecessarily.
E-commerce is a massive and growing market, but it is also very complex. By implementing
supply chain management, we can reduce the cost of shipping, improve customer service, and
more.
Decreases Purchasing Cost – Retailers depend on supply chains to quickly deliver expensive
products to avoid holding costly inventories in stores any longer than necessary. For example,
electronics stores require fast delivery of 60” flat-panel plasma HDTV’s to avoid high inventory
costs.
Decreases Production Cost – Manufacturers depend on supply chains to reliably deliver materials
to assembly plants to avoid material shortages that would shutdown production. For example, an
unexpected parts shipment delay that causes an auto assembly plant shutdown can cost $20,000
per minute and millions of dollars per day in lost wages.
Decreases Total Supply Chain Cost – Manufacturers and retailers depend on supply chain
managers to design networks that meet customer service goals at the least total cost. Efficient
supply chains enable a firm to be more competitive in the market place. For example, Dell’s
revolutionary computer supply chain approach involved making each computer based on a
specific customer order, then shipping the computer directly to the customer. As a result, Dell
was able to avoid having large computer inventories sitting in warehouses and retail stores which
saved millions of dollars. Also, Dell avoided carrying computer inventories that could become
technologically obsolete as computer technology changed rapidly.
Better customer experience
Your customers depend on you to provide them with the best possible experience, and they will
tell everyone they know if you don’t. Supply chain management helps you keep your reputation
intact by ensuring every product arrives on time and in good condition. Customers expect the
correct product assortment and quantity to be delivered.
Customers expect products to be available at the right location. (i.e., customer satisfaction
diminishes if an auto repair shop does not have the necessary parts in stock and can’t fix your car
for an extra day or two).
Right Delivery Time – Customers expect products to be delivered on time (i.e., customer
satisfaction diminishes if pizza delivery is two hours late or Christmas presents are delivered on
December 26).

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Right After Sale Support – Customers expect products to be serviced quickly. (i.e., customer
satisfaction diminishes when a home furnace stops operating in the winter and repairs can’t be
made for days)
Improved quality control
Supply chain management allows for more accessible quality control by monitoring shipments
and communicating with suppliers about any issues that arise during shipping or production. This
ensures that quality is maintained from beginning to end of production and delivery.
Improved inventory management
With supply chain management, there’s no need for inefficient inventory management practices
like overstocking or understocking because the system will monitor how much stock is available
at each location, so you always have just enough on hand but not too much or too little.
Improved delivery time
With a supply chain management system, you can predict the delivery time for your customers.
This means that instead of guessing when your customers will receive their products, you can
make an accurate estimation and send it to them.
Improved communication between employees
You can create a communication platform where all employees can communicate with each
other quickly and effectively in one place. A company wide communication system will help
ensure that everyone stays informed and communicates effectively.

Q14. What is e payment system? Explain its various methods with the help of diagrams.
Ans-

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An electronic payment (e-payment), in short, can basically defined as paying for goods or
services on the internet or through gateway to pay amount. It includes all financial operations
using electronic devices, such as computers, smartphones or tablets. E-payments can be made in
many ways, like credit or debit card payments or bank transfers.

The term electronic payment refers to a payment made from one bank account to another using
electronic methods and forgoing the direct intervention of bank employees. Barely defined
electronic payment refers to e-commerce in which payment for buying and selling goods or
services offered through the Internet, or broadly to any nature of electronic funds transfer.
Modern payment systems use cash-substitutes as compared to traditional payment systems. This
includes debit cards, credit cards, electronic funds transfers, direct credits, direct debits, internet
banking, E-wallet, virtual currency using blockchain and e-commerce payment systems.
An electronic payment is any kind of non-cash payment that doesn't involve a paper check.
Methods of electronic payments include credit cards, debit cards and the ACH (Automated
Clearing House) network. The ACH system comprises direct deposit, direct debit and electronic
checks (e-checks).
Artificial Intelligence is the panorama of banking as it brings the power of advanced data
analytics to combat fraudulent transactions and improve compliance. Features such as AI bots,

55
digital payment advisers and biometric fraud detection mechanisms lead to advanced quality of
services to a wider customer base.
Payment Gateway
A payment gateway is an online application (characteristically used in e-commerce) that
conducts payment authorizations for merchants, electronically based businesses (e-businesses),
merchants with mutually brick and mortar locations and online locations and merchants with
long-established brick and mortar stores. As long as there is an internet connection, a payment
gateway steadily connects to an e-commerce application or in-house payment application such as
a credit card processing network or an online banking institution. Payment gateways are the
“middle man,” handling business between merchants and customers serving in a position that
steadily withdraws thefunds for a transaction from customers and deposits them into merchant's
bank account. A payment gateway is a digital version of the physical point of sale (POS)
terminals located in approximately all of today’s retail outlets. For setting up an ecommerce store
or selling digital products through a website a payment gateway is a pre-requisite or a mandatory
component. Payment gateways are the consumer-facing interfaces which are used to collect
payments.
А payment gateway is the technology that captures and transfers payment data from the
customer to the acquirer. It is used not only by merchants to recognize debit or credit card
purchases from customers. The term includes not only the physical card-reading devices found in
brick-and-mortar retail stores but also the payment processing portals found in online stores. On
the other hand, brick-and-mortar payment gateways in recent years have begun accepting phone-
based payments using Near Field Communication (NFC) technology. Payment gateway is
essentially a bridge or connection pathway between the customers and the relevant financial
institution. Gateways are a link between the merchant’s website and a payment provider or
banking network. Essentially, they act as a “wire” that connects the site to a payment provider
and allows secure payment data to flow back and forth.

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Steps Showing a Typical E-Payment System
The following are the basic steps showing how a typical payment gateway

57
works:

TYPES OF PAYMENT GATEWAYS

1- Hosted Payment Gateways
Hosted payment gateways direct the customer away from checkout page. When the
customer clicks the gateway link, they are redirected to the
Payment Service Provider (PSP) page. Here, the customer fills his/her details and after
payment is redirected back to the website to complete checkout process.
2- Self-Hosted Payment Gateways
With self hosted payment gateways anyone can customise and add new Features
depending on the business needs and requirements.
3- API Hosted Payment Gateways

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 With API hosted payment gateways, customers enter their credit or debit card
Information directly on the merchant’s checkout page and payments are Processed using
an API (Application Programming Interface) or HTTPS Queries.
4- Local Bank Integration Gateways
Local bank integration gateways redirect the customer to the payment gateway’s website
(the bank’s website) where they enter their payment details and contact details. After
making the payment, the customer is redirected back to the merchant website, with
payment notification data sent upon redirection.
TYPES OF PAYMENT METHODS
There are various types of payment gateways consumers are using. It can be possible in brick-
and-mortar which we usually call physical stores and shopping online which we call click-and-
mortar stores. In physical stores, payment gateways consist of the point of sale (POS) terminals
used to accept payments by card or by phone. In online stores, payment gateways are the
“checkout” portals used to enter credit card information or credentials for services such as
Google Pay, Amazon Pay, Facebook Pay and WhatsApp Pay.Using multiple gateways make
great business sense when you considering the flexibility it gives to your team. There are various
kinds of E-payment present in a market, some are mentioned below:
• Automated clearing house.
• Wire transfers.
• Item processing.
• Remote deposit capture.
• FedLine Access Solutions.
• Automated Teller Machines.
• Card Services (ATM, credit, debit, prepaid)
• Mobile payments
• Crypto currency
On the other hand E-payment methods could be further classified into two areas, credit payment
systems and cash payment systems which we usually called Pre Paid & Post Paid E-Payment
System. Prepaid refers to the scheme in which you buy credit in advance before availing
services. Postpaid is defined as a scheme in which the customers are billed at the end of the
month for the services availed by them. Examples include plastic card, on-line transactions,
concerned bank, performed by phones or by filling form on the website, Cyber Cash, encrypted
payment, Internet Cheques, cheques for deposit, Process them internally, and clear and settle
between banks, cheques handwriting signatures.
Credit Cards

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Credit card is a plastic card which is issued by a bank. It is issued to customers of high credit
ranking, the necessary information is stored in magnetic form on the card. A card holder can
purchase the item from the shop or the showrooms and need not pay cash. He has to flash the
card in machine at the place where he is making purchases. Banks issue credit card to the
customers up to a certain limit. The customers can purchase goods/services from the authorized
showrooms without carrying physical cash with them. The bills are presented by the showroom
to the authorized branch. This bill is presented by the paying branch to the issuing branch.

Debit Card
Debit card is also like credit card. It is required to have a bank account beforehaving debit card.
How to Use a Debit Card Online?If you're paying for something online, you can use your Debit
Card. Here is astep-by-step guide to help you complete your payments online using DebitCards-
•Once you are at the payment checkout, you need to choose “Pay Using Debit/Credit Card. Once
you select on the option, you need to specify the type ofcard, i.e., Debit Card and whether it is a
Visa or Mastercard.
•Then, type the 16-digit Debit Card number which is on the front side of yourDebit Card. You
will also have to enter the expiration date of the card.

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•Once you’ve entered the Debit Card details, you may be asked for a CCD,CVV, or similar
security code. In most cases, it is a three or four- digit codethat helps prove that you are
authorised to use the card. This code is mostlyfound on the back of the cards.
•Once you are through the payment portal, you will be asked to enter a uniquetransaction code or
an OTP (one-time password) that is sent to the mobilenumber linked to your Debit Cards. Once
you enter the number, yourtransaction is verified, and you receive a notification.
•To use a Debit Card online, you will need to know the correct billing addresswhich is linked to
the card being used.

Digital Cash
Digital Cash acts much like real cash, except that it’s not on paper. Money in your bank account
is converted to a digital code. Thisdigital code may then be stored on a microchip, a pocket card
(like a smart card), or on the hard drive of your computer.The concept of privacy is the driving
force behind digital cash. The user of digital cash is assured an anonymous transaction by
anyvendor who accepts it. Your special bank account code can be used over the internet or at any
participating merchant to purchase any item. Everybody involved in the transaction, from the
bank to the user to the vendor, agree to recognize the worth of the transaction, and thuscreate this
new form or exchange.

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This example shows how digital cash might work through a banking institution. The bank creates

a digital Bank note by signing a message which specifies the serial number (with a primary or
public key) and value of The note, and sends it to Person A. Person A, as he withdraws it, uses
Chaum’s technique (A CryptographyTechnique) to alter the serial number so that the bank will
not recognize the note as being from thisWithdrawal. This note is now returned to the bank with
the new serial number. The bank now has a note withA new serial number. Person A then pays
Person B electronically by sending the bank note to him. Person BChecks the note’s validity by
decrypting using the bank’s public key to check its signature (new serial numberValidity).
Person B then sends the note to the bank, which checks the serial number to confirm that this
bankNote hasn’t been spent before. The serial number is now different from that in Person A’s
withdrawal, therebyPre- venting the bank from linking the two transactions. The enabling bank
merely checks the new serializedKey account for the amount of the transaction and transfers the
money by sending out a depositoryNotice. Person B using the same encrypting technique returns
the depository notice with the new serializeAccount. The enabling bank does not know who the
merchant is only that money is available for payment. InSome respects, this is a debit card
transaction with no information other than the amount of theTransaction. All initial depositor
information is in the primary key account not the password account.Special software to enable
these dual track procedures was developed by Digicash. However this venture wasNot
successful, nor was it successful for its successor corporation, CyberCash, Inc.

EFT (electronic funds transfer )

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• An electronic funds transfer (EFT) is any transfer by two corresponding banks or financial
institutions that is strictly handled by computerized systems. In otherwords, this is a broad term
for modern transaction methods. As long as it doesn’t involve direct humancontact and is
facilitated through a computer, then it’s considered an EFT. You can think of it as an umbrella
term of sorts, so EFTs can bewire transfers, direct debits, ACH payments, and more. EFTs have
exploded in popularity following the invention of the internet, eCommerce,and digital cash.
Virtually all components of a traditional transaction are being digitized — invoices, receipts,
payments, and EFT systems arean essential component of this. So why accept electronic checks,
digital debit transactions, etc. if credit cards are so popular these days?
• Cost and convenience.
• EFTs are significantly cheaper than credit cards — averaging at around 1% in fees as opposed
to 3% or so for cards. For businesses of all
types and sizes, this offers a significant incentive to support and encourage customers to use EFT
methods.
• While features and specifics change payment type to payment type, there are some common
characteristics across all EFT payment types.
Funds are typically transferred with 24-48 hours. Fees typically hover around 1%
EFTs are popular for recurring debits and credits.
Customers enjoy having the payment flexibility EFTs offer.

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ACH (automated clearing house)
• ACH, or automated clearing house, is like a check without the paper.
• ACH payments are a type of EFT. If EFT stood for electric cars, then ACH would be a Tesla or
Nissan Leaf. SoACH can be a type of EFT but EFT can’t be a type of ACH.
• It’s a computer-based clearing and settlement facility that exchanges funds between two
depository institutions.ACH is most commonly used in recurring invoicing (monthly auto-drafts)
and direct deposit programs. ACH ischeap to send money with and relatively easy to set up,
making it an attractive option for businesses that conductlarge, recurring bills (think B2B or
consulting fees).

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Q15.write shorts notes on
1. Automated cleaning house
2. Electronic fund transfer
3. Challenges of e payment-system.

1- Automated cleaning house:

The Automated Clearing House (ACH) is an electronic funds-transfer system run by Nacha. The
Automated Clearing House traces its roots back to the late 1960s but was officially established in
the mid-1970s. The payment system provides many types of ACH transactions, such as payroll
deposits. It requires a debit or credit from the originator and a credit or debit on the recipient's
end.
How the Automated Clearing House (ACH) Works ?
The ACH Network is an electronic system that serves financial institutions to facilitate financial
transactions in the U.S. It represents more than 10,000 financial institutions and ACH
transactions totaled more than $72.6 trillion in 2021 by enabling over 29 billion electronic
financial transactions.
The network essentially acts as a financial hub and helps people and organizations move money
from one bank account to another. ACH transactions consist of deposits and payments,
including:

Business-to-business (B2B) transactions

Government transactions
Consumer transactions
Here's how the system works. An originator starts a direct deposit or direct payment transaction
using the ACH network via debit and credit. The originator's bank, also known as the originating
depository financial institution, takes the ACH transaction and batches it together with other
ACH transactions to be sent out at regular times throughout the day.
An ACH operator, either the Federal Reserve or a clearinghouse, receives the batch of ACH
transactions from the originating institution with the originator's transaction. The ACH operator
sorts the batch and makes transactions available to the bank or financial institution of the
intended recipient, also known as the receiving depository financial institution. The recipient's
bank account receives the transaction, thus reconciling both accounts and ending the process.
The ACH payment system is offered by Nacha. Formerly known as the National Automated
Clearing House Association, it's a self-regulating institution. The ACH network's history dates
back to 1968 but wasn't officially established until 1974.

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This network manages, develops, and administers the rules surrounding electronic payments. The
organization's operating rules are designed to facilitate growth in the size and scope of electronic
payments within the network.

Advantages and Disadvantages of the ACH

Advantages
Because the ACH Network batches financial transactions together and processes them at specific
intervals throughout the day, it makes online transactions extremely fast and easy. NACHA rules
state that the average ACH debit transaction settles within one business day, and the average
ACH credit transaction settles within one to two business days.
The use of the ACH network to facilitate electronic transfers of money has also increased the
efficiency and timeliness of government and business transactions. More recently, ACH transfers
have made it easier and cheaper for individuals to send money to each other directly from their
bank accounts by direct deposit transfer or e-check.
ACH for individual banking services typically took two or three business days for monies to
clear, but starting in 2016, NACHA rolled out in three phases for same-day ACH settlement.
Phase 3, which launched in March 2018, requires RDFIs to make same-day ACH credit and
debit transactions available to the receiver for withdrawal no later than 5 p.m. in the RDFI’s local
time on the settlement date of the transaction, subject to the right of return under NACHA rules.

Disadvantages
Certain financial institutions may restrict the amount of money you can transfer. If you want to
do a large transfer, you may have to do this in multiple steps. For instance, if you're transferring
money to your child who's away in college, you may be limited to transfers of $1,000. If they
need more for books and rent, you will be required to send more than one transfer.
Some banks charge fees for ACH transactions. And this can be a per-transaction fee. If you’re
used to doing multiple transactions, this can add up and put a big dent in your bottom line.
The ACH network only works between U.S. accounts. This means that you can’t conduct any
transactions that are meant for international transfers using this payment system. So if you want
to send money to someone abroad, you must do so using a wire transfer or other similar payment
processing network. As such, the transaction will not necessarily be executed on the same day.
Pros
Makes online transactions quick and easyIncreases efficiency and timelinessProvides same-day
banking transactions
Cons

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Banks may limit transaction amountsFeesCan't be used for transactions outside the U.S., which
may result in longer processing times.

2- Electronic fund transfer:

An EFT is digital movement of money from one bank account to another. These transfers take
place independently from bank employees. As a digital transaction, there is no need for paper
documents. EFT has become a predominant method of money transfer since it is a simple,

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accessible, and direct method of payment or transfer of funds. As businesses increase their usage
of EFT, paper checks become obsolete due to expense, slower expedition, and overall effort.
Electronic Fund Transfer Process
An EFT transfer is usually very straight forward. There are two parties: the sender of funds, and
the receiver of funds. Once the sender initiates the transfer, the request channels through a series
of digital networks originating from either the internet or a payment terminal, to the sender’s
bank, and then to the receiver’s bank. Senders can be anyone from an employer, to a business, to
an individual paying a vendor for a service such as electricity. Likewise, recipients can be
entities like employees, goods suppliers, retailers, and utility companies. Most payments are
cleared, that is complete, within a couple days.

Types of EFT Payments

EFT payment methods vary. Every method of EFT offers ease and fast delivery, which is why
it’s become so popular. While EFT is preferred worldwide, it’s important to know the various
ways one can take part in EFT payments. Here are the most common types of EFT:

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Electronic checks
In this payment, a digital check is generated upon the payer’s authorization. E-checks are
commonly used for vendor payments.
Direct Deposit
With direct deposit, funds are automatically deposited into an account with little to no
paperwork. This method is popular among employees. While the automatic deposit requires
almost no work on a regular basis, the deposit needs to be set up, and this requires bank account
information for the recipient, among other potential information for entry.
Phone Payments
This is a casual transaction, and it occurs during a phone call. Usually the payee will supply their
information, typically a card number, to the recipient over the phone. The transaction will
happen on the recipient’s line. The payee does very little after verbal authorization. This is
common for utility payments.
ATM Transactions
A global convenience, ATM transactions occur at electronic kiosks found throughout cities and
banks all over the world. In this case, a person is withdrawing cash from their bank account by
inserting their debit card into a machine, which will transmit information to the bank, and then
process the request to dispense money. It is an instant transaction.
Card Transactions
During the point of sale phase of a transaction, a credit card or debit card is the most commonly
used form of payment around the world, replacing cash. This can be in person or online, and
entails the swipe, dip, or entry of a card, during which account information is electronically

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received and a payment withdrawal is approved, then the payment is scheduled and processed
within a day or two.
Internet Transactions
The internet version of tapping, swiping, or inserting a card involves manual entry into a point of
sale field, followed by clicking a payment button. This process does the same as the above,
processing an approval for payment, and then transferring funds for payment within a couple
days.
Benefits of Electronic Fund Transfer
When it comes to payment, EFT has a lot to offer. All types of EFT are fast and reliable, and
they don’t require much work on either end of the transaction. This means EFT is a cost-
effective solution so businesses save money. The low effort aspect is a financial benefit when it
comes to time spent, but it also means employees can concentrate on larger issues since the
details are taken care of through electronic automation.
The use of paper checks requires check printing and postage, both of which are extra costs.
Personnel interaction is needed for these tasks, which means less gets done, or additional
employees are necessary. A risk of mailing checks involves potential mail loss, or even
interception of checks. Stop payment is a necessary expense in either of these cases. All of this is
gone with an EFT.
When using cash, an in-person transaction is required. There’s risk of human error for counting,
risk of fraudulent bills, and extra expense and effort for an employee to manage the money from
transaction to filling the safe, to in-person deposit at the bank. Again, these risks are totally gone
with an EFT solution, like a credit card.
EFT’s established safety is one of the best benefits. Besides cost, secure business establishes
entities as trustworthy, resulting in repeat sales and long-term relationships.

3)-Challenges of e payment-system:
Online merchants and consumers alike expect online buying and selling to be easy, efficient, and
safe. eCommerce transactions trigger complex automated processes that involve downstream
players: banks and payment processors to name just two. In addition, technological advances in
smartphones and e-wallets, shifting purchase patterns, and demand for cross-border, multi-
currency electronic payments have fueled PSP competition to maintain and increase market
share.
New technologies have already simplified and smoothed business-to-business and business-to-
customer experiences with mobile payments, e-wallets, and contactless cards. As the online
payment processing market grows, user demands for additional payment features and options
lead growth in multiple directions.
Providers are under pressure to provide peer-to-peer payments beyond traditional banking
models, and to facilitate a cashless society that can enable any purchase, even mechanical
transactions such as parking meters or vending machines. These demands create technical
challenges for merchants, processors, and users up and down the transaction path.
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Below is a list of the 5 main challenges in online payments and how to overcome them.
1. Fraud and chargebacks
Online transactions are “card-not-present” transactions. As e-commerce expands, opportunities
for fraudulent misuse of payment networks and data theft grow right alongside. In addition to
more obvious fraud-monitoring tools such as the customer account, validation services, and
purchase tracking, a certified Level 1 PCI DSS payment processor’s risk management staff can
sniff out fraud before it occurs.
Chargebacks, in addition to being costly, can damage business reputations; an excessive number
of chargebacks can lead to closed merchant accounts, effectively killing the business. While
chargebacks do sometimes happen for legitimate reasons, use of customer servicepractices based
on know-your-customer principles, and merchant accessibility, can substantially reduce or
eliminate chargebacks.
New technologies such as EMV and fingerprint recognition are also being used by PSPs to
reduce fraud and chargebacks.
Advanced EMV technology is used to validate that a payment card is genuine and facilitate the
authorization of the transaction. When a payment is made in-store, the card is inserted into a
compatible card reader, the EMV chip is read, and data is exchanged in a highly secure manner,
using encryption.
Of course, when making an online payment, the buyer manually enters card information, so the
chip appears to have no benefit. However, EMV still provides an indirect security benefit for
online payment processing. In the event that card information is stolen online, it’s much harder
for fraudsters to clone and use a card with an embedded EMV chip.
Consumers are becoming increasingly familiar with biometric identification, such as fingerprint
recognition, which is often used to unlock phones. It is now being introduced to increase
mobilepayment security and prevent fraud. During the mobile payment process, the buyer simply
scans their fingerprint using a compatible mobile device, to prove their identity. This is a
powerful tool for fraud prevention, as it ensures the person performing the transaction is truly
authorized to do so.
While a password or PIN code can be stolen or guessed, fingerprint data requires the buyer’s
physical presence.. This technology is already being implemented by Google Play, allowing
users of Android smartphones with built-in fingerprint scanners to authenticate Google Play
purchases using their fingerprints.

2. Cross-border transactions
Cross-border payments can be slow, inefficient, and expensive, but they play an important role in
global trade. Typically, national banking infrastructures can’t handle cross-border payments,
resulting in independent and non-uniform development in technologies and software platforms
that complicate or stall cross-border transactions. New developments are beginning to shape
cross-border payment requirements:
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Emerging transnational systems will decrease reliance on correspondent networks
Government-led initiatives and mandates will begin to regulate payments and fees
Payment systems will manage credit risk, liquidity, and costs more effectively
Multinationals will achieve economies of scale, with a side benefit of consolidating credit risk
Outsourcing will increase processing efficiency and drive down costs
3. Card data security
Payment Card Industry Data Security Standards (PCI DSS) certification is required for every
merchant or business accepting credit or debit cards, online or off. PCI DSS standards require
merchants and processors to meet 12 criteria across six security arenas:

Build and maintain a secure network and systems

Protect cardholder data
Maintain a vulnerability management program
Implement strong access control measures
Regularly monitor and test networks
Maintain an information security policy
Recent retail, government, and healthcare security breaches underscore what every merchant
knows: customer and card data security is top priority. Preventing online payment security issues
is a must for anyone doing business online. This can be done by either acquiring PCI DSS Level
1 certification, or using a PSP-hosted payment page.
4. Multi-currency and payment methods
Global ecommerce means accepting a variety of payment methods and currencies. eWallet
payment processing, mobile payment processing, and of course acceptance of international
credit/debit cards help online merchants compete in global markets by allowing their customers
to pay in their native currencies and method of choice. For merchants, multi-currency, cross-
border transactions can require new bank accounts, new business entities, and new regulatory
hurdles in each national market.
Selecting a payment service provider with the necessary infrastructure already in place can
provide effective, and immediate, solutions to those problems. A merchant can easily collect
payment in one currency and credit the merchant account in its home currency. A good PSP is
able to securely process eWallet payments, credit and debit card payments and integrate natively
mobile payment processing systems (for example mPesa). In the next section we’ll discuss
integrations.
5. Technical integration

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Online payment systems run the proprietary gamut across hardware and software platforms.
Credit card-affiliated payment processors, while more secure, can be expensive for online
retailers. Added to the expense is the lack of interface between processing systems—it may be
difficult or impossible for a PSP to link with other systems, resulting in processing and payment
delays, lost transactions, and expensive fees.
In true real-time processing, a combination of features, including integrated systems and
gateways, addresses liquidity issues and minimizes delays, while preserving online transaction
integrity. A payment processor that provides for immediate and individually processed
transactions can open client accounts in more than one acquiring bank, thus avoiding the delays
often inherent in automated clearinghouse processes.

Q16.Discuss the following in contexts to E- banking

 Concept of e banking
 Merits and Demerits of e banking
 Types of e banking
 Issues/risks of e banking

Concept of e banking
E-banking is a system that provides users with a range of online banking services through the use
of the internet and telecommunications networks. Customers can use this method to access their
bank accounts online and carry out different financial operations online. Online banking, virtual
banking, and internet banking are other names for it.
E-banking is a fast, easy, and secure electronic service that enables clients to do financial
transactions anywhere without going to a bank branch. Customers get access to the e-banking
service around-the-clock, seven days a week.
The expansion of the financial industry enables traditional banks to explore a variety of online
services. By offering online banking services, the banking industry aims to improve client
service. Customers can conduct online banking through the use of the internet, which is also
known as virtual banking.
Customers can use the main medium of the internet to undertake both financial and non-financial
services. The financial sector is continually innovating, with examples like virtual banks without
branches and cutting-edge online services that let you manage all accounts effectively (Ismail,
2017). Virtual banking has completely altered the financial industry, creating a convenient
banking system.
Instead of exchanging different conventional documents like cash, checks, etc., monies are
exchanged here by the transmission of electronic signals. Various E-banking services, including
ATMs, mobile banking, debit cards, telebanking, the EFT (Electronic Fund Transfer) system,
and ECS, are available (Electronic Clearing Services).

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  Merits and Demerits of e banking
Merits
Convenience: E-banking makes it very easy for users to do different financial activities. People
don't need to go to the bank to access their bank accounts; they can do it at any time while sitting
in their homes. Finding time in a busy schedule to go to the bank to check on account balances,
interest rates, successful money transfers, and other updates might take a lot of work. For the
convenience of its customers, banking systems have created virtual banking systems that may be
accessed from any location and at any time. There are several reasons why a banking holiday
prevents the transfer of your money. By offering services around-the-clock, 365 days a year,
online banking systems have made things easier. It resolves issues that customers faced with the
previous banking system. There is no need to stand in line for money transactions or
deportations.
Faster Service: People don't have to wait in line to pay their bills or transfer money thanks to
this system, which offers quick service. Instant money transfers between accounts are possible
with internet payment options.
Higher Interest Rate: Online banking services offer their users higher interest rates. It has
decreased the operational costs of banks, enabling them to provide better interest rates on
consumer deposits.
Service Quality: Internet banking has raised the level of client service. Using online banking to
make payments is quick, secure, and effortless. Using e-banking apps, customers may keep track
of all account-related transactions.
24-7 Facility: Customers have access to e-banking services around-the-clock, seven days a
week, 24 hours a day. Customers can access banking services and products at any time, from any
location.
Liquidity: It gives customers access to more readily available finances. They can conveniently
withdraw cash from ATMs at any time and from any location.
Discounts: The ability to take advantage of numerous discounts is another significant benefit of
using online banking services. People benefit from several discount programs in stores that
accept credit or debit cards.
Transfer assistance: The virtual banking system makes it simple to transfer money 365 days a
year. You don't have to limit yourself to carrying out transactions during business hours; you
have 24 hours to do as you choose.
Surveillance service: Customers have access to an updated passbook at any time to manage
their financial plans and keep track of their transactions.
Paying bills online: Because it offers a feature to pay any sort of bill, including energy, water
supply, telephone, and other services, you don't need to stand in line to pay your bills.

Demerits :

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Security problems: Online hackers' hacking of e-banking systems has led to several security
problems. Customers could suffer significant financial loss if they lose their login information
when making payments.
High Start-Up Cost: It costs a lot to set up different computers, software, hardware, a modem,
and an internet network. Banking businesses must make significant investments to launch online
banking services.
Lack of Direct Interaction Between Clients and Banks: Direct communication between
customers and banks is one barrier to internet banking. Customers communicate with banks
online through their websites. Customers can occasionally not address their problems by
contacting the bank virtually.
Transaction issues: Banking servers frequently go down, which causes transactions to fail.
Online payment issues that customers encounter are inconvenient.
Training and development: Banks must teach their employees so that they can better serve
clients online. For keeping skilled and trained workers, significant investment is needed.
Long process to use e-banking: In certain nations, government banks offer online banking
through the completion of an application, which is then approved before allowing access to a
security password to log in. To properly log in, one must download the relevant banking app and
fill out all required fields (Sharma, 2016).
Challenging for beginners: It will be difficult for novices to understand e-banking; they may
find it difficult. Because they are worried about losing money, customers are typically reluctant
to explore all of the features and alternatives offered on the website or app. If prompt assistance
is not provided, new clients typically give up and switch back to traditional banking.
No Cash Deposit Platform: There is no platform for cash deposits in e-banking services. This
suggests that e-banking customers must visit their local bank branches or automated teller
machine locations to deposit cash instead of using the platform (whether they need instant
services or not).

Types of e banking
Classification of E-Banking:
Banks offer different kinds of services through electronic financial stages. These are of three
sorts:
Type 1:
This is the essential degree of administrations or services that banks offer through their sites.
Through this assistance, the bank offers data, information regarding its services and products to
clients. Further, a few banks might respond to an inquiry through email as well.
Type 2:

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In this category, banks permit their clients to submit directions or applications for various
administrations, check their record balance, and so on. Be that as it may, banks don’t allow their
clients to do any fund-based exchanges with respect to their records or accounts.
Type 3:
In the third category, banks permit their clients to work or operate their records or accounts for
bill payments, purchase and redeem securities and fund transfers, and so on.
Most conventional banks offer e-banking administrations as an extra technique for offering
support. Further, many new banks convey banking administrations principally through the other
electronic conveyance channels or web. Likewise, a few banks are ‘internet only’ banks with no
actual branch anyplace in the country.
In this way, banking sites are of two sorts:
Transactional Websites: These sites permit clients to go through with exchanges on the bank’s
site. Further, these exchanges can go from a plain retail account balance request to huge
business-to-business liquid assets transfers. The accompanying table records some normal
wholesale and retail e-banking administrations presented by financial institutions and by banks.
Informational Websites: These sites offer general data regarding the bank and its services and
products to the clients.
Wholesale services by banks: Include Account management, Cash management, Small business
loan applications, Approvals or advances, Commercial wire transfer, Business-to-business
payments, Employee benefit, and Pension administration.
Retail services by banks: Include Account management, Bill payment, New account opening,
Consumer wire transfers, Investment and brokerage services, Loan application and approval, and
Account Aggregation.
Services Under E-Banking:
Mobile Banking:
Mobile banking (otherwise called M-banking) is a name utilised for performing account
exchanges or transactions, bill payments, credit applications, balance checks, and other financial
exchanges through a mobile phone like a Personal Digital Assistant (PDA) or cell phone.
Electronic Clearing System (ECS):
The Electronic Clearing System is a creative provision for occupied individuals. With this
provision, an individual’s credit card bill is consequently charged from the same individual’s
savings bank account, so one doesn’t have to stress over missed or late payments.

Smart Cards:
A smart card is a card that stores data on a microchip or memory chip or a microprocessor in lieu
of the magnetic stripe found on debit cards and credit cards. Smart cards are not utilised for
transferring or moving monetary data alone, but also they can be utilised for an assortment of

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identification grounds. Exchanges made with smart cards are scrambled or encrypted to shield
the exchange of data from one party to another. Each encoded exchange can’t be hacked and
doesn’t transmit any extra data past what’s required for finishing the single exchange or
transaction.
Electronic Fund Transfers (ETFs):
Electronic fund transfer (EFT) is the electronic exchange of cash starting with an individual
account in the bank to another individual account of the same bank, or within or with other
financial institutions or with multiple institutions, by means of personal computers based
frameworks, without the immediate intercession of bank staff.
Telephone Banking:
Telephone banking is an assistance given by a bank or other monetary foundation or other
financial institutions, that empower clients to perform via telephone a scope of monetary
exchanges which don’t include cash or financial instruments, without the need to visit an ATM
or a bank branch.
Internet banking:
Web-based banking is an assistance presented by banks that permits account holders to get their
record information by means of the web or the internet. Web-based banking or Internet banking
is otherwise called “Web banking” or “Online banking.”
Internet banking through customary banks empowers clients to play out every standard
exchange, for example, bill payments, balance requests, stop-payment requests, and balance
inquiries. Some banks even proposition online credit card and loan applications.
Account data can be acquired day or night, and should be possible from any place.
Home banking:
Home banking is the most common way of concluding the monetary exchange from one’s own
home as opposed to using a bank’s branch. It incorporates making account requests, moving
cash, covering bills, applying for credits, and directing deposits.
Significance of E-Banking:
Importance to clients:
Lower cost per exchange: Since the client doesn’t need to visit the branch for each exchange, it
saves him both time and cash.No topographical hindrances: In conventional financial
frameworks, geological distances could hamper specific financial exchanges. Nonetheless, with
e-banking, geological obstructions are diminished.
Convenience: A client can get to his record or bank account and execute from any place at any
time.
Importance to Businesses:

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Better efficiency: Electronic banking further develops usefulness. It permits the computerisation
of ordinary, regularly scheduled payments and provides further banking activities to upgrade the
efficiency of the business.
Lower costs: Usually, costs in financial relationships and connections depend on the assets used.
Assuming that a specific business needs more help with deposits, wire transfers, and so on, then,
at that point, the bank charges its higher expenses. With internet banking, these costs are limited.
Lesser errors: Electronic financial diminishes mistakes in normal financial exchanges. Awful
penmanship, mixed-up data or information, and so on can cause mistakes that can be exorbitant.
Likewise, a simple audit of the record or account activity, movement upgrades the precision of
monetary exchanges.
Diminished misrepresentation: Electronic banking gives an advanced impression to all
representatives who reserve the privilege to alter banking exercises. In this manner, the business
has better perceivability into its exchanges, making it hard for any fraudsters from committing
crimes.
Account reviews: Business proprietors and assigned staff individuals can get to the records
rapidly utilising a web-based financial interface. This permits them to audit the record action
and, furthermore, guarantee the smooth working of the account.
Importance to banks:
Lesser exchange costs: Electronic exchanges are the least expensive methods of exchange.
A decreased edge for human blunder: Since the data is handed-off electronically, there is no
space for human mistakes or errors.
Lesser desk work: Advanced records decrease desk work, paperwork, and make the cycle
simpler to deal with. Likewise, it is ecological.
Decreased fixed expenses: A lesser requirement for branches which converts into a lower fixed
expense.
More steadfast clients: Since e-banking administrations or services are convenient to the
clients, banks experience higher reliability from their clients.

Issues/risks of e banking:
THE RISKS IN E-BANKING ARE AS FOLLOWS
Operational risk
Security risk
System architecture & design risk
Reputational risk
Legal risks

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Money laundering risk
Strategic risk
Other risk
1. OPERATIONAL RISK
Operations risk arises from fraud, processing errors, system disruptions, or other
unanticipated events resulting in the institution's inability to deliver products or services. This
risk exists in each product and service offered. The level of transaction risk is affected by the
structure of the institution's processing environment, including the types of services offered
and the complexity of the processes and supporting technology. In most instances, e- banking
activities will increase the complexity of the institution's activities and the quantity of its
operations risk, especially if the institution is offering innovative services that have not been
standardized. Since customers expect e-banking services to be available 24 hours a day, 7
days a week, financial institutions should ensure their e-banking infrastructures contain
sufficient capacity and redundancy to ensure reliable service availability.

BANKS FACE THREE MAIN TYPES OF OPERATIONS RISK

VOLUME FORECASTS
Accurate volume forecasts have proved difficult - One of the key challenges encountered by
banks in the Internet environment is how to predict and manage the volume of customers that
they will obtain. Many banks going on-line have significantly misjudged volumes. When a bank
has inadequate systems to cope with demand it may suffer reputational and financial damage,
and even compromises in security if extra systems that are inadequately configured or tested are
brought on-line to deal with the capacity problems.
MANAGEMENT INFORMATION SYSTEMS
Banks may have difficulties in obtaining adequate management information to monitor their e-
service, as it can be difficult to establish/configure new systems to ensure that sufficient,
meaningful and clear information is generated. Such information is particularly important in a
new field like e-banking. Banks are being encouraged by the FSA (Financial Services
Authorities) to ensure that management have all the information that they require in a format that
they understand and that does not cloud the key information with superfluous details.
Operational risk is the risk of incurring financial loss due to human or technical errors andfraud.
Operational risk can arise from the failure to follow or complete one or more steps inthe
prescribed authorization process. Operational risk includes the risks associated with thefailure of
communications, the breakdown of data transport or processing, internal controlsystem
deficiencies, human errors, or management failure. As a result, the financialinstitution could
experience delays or disruptions in processing, clearing, and settling retailpayment transactions,
that could lead to credit and liquidity problems at other financialinstitutions.
Operational risk can also arise from fraud. A financial institution's exposure to operational risk
from fraud is the risk that a wrongful or criminal deception will lead to a financial loss for one of

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the parties involved. Currency and checks are more vulnerable to loss or direct theft, whereas
fraud is the primary concern in bank card payment transactions.
Operational risk controls should include information system, procedural, administrative, and
legal measures to prevent or limit financial loss as a result of operational risk. System measures
include monetary and time limits (per transaction, per payment instrument.
OUTSOURCING
Finally, a significant number of banks offering e-banking services outsource related business
functions, e.g. security, either for reasons of cost reduction or, as are often the case in this field,
because they do not have the relevant expertise in-house. Outsourcing a significant function can
create material risks by potentially reducing a bank's control over that function. Outsourcing is of
course neither new nor unmanageable but banks should be mindful on outsourcing, which
addresses these risks.

2-SECURITY RISK
Security risk arises on account of unauthorized access to a bank's critical information stores like
accounting system, risk management system, portfolio management system, etc. A breach of
security could result in direct financial loss to the bank. For example, hackers operating via the
Internet could access, retrieve and use confidential customer information and also can implant
virus. This may result in loss of data, theft of or tampering with customer information, disabling
of a significant portion of bank's internal computer system thus denying service, cost of repairing
these etc. Other related risks are loss of reputation, infringing customers' privacy and its legal
implications. Thus, access control is of paramount importance. Controlling access to banks'
system has become more complex in the Internet environment which is a public domain and
attempts at unauthorized access could emanate from any source and from anywhere in the world
with or without criminal intent. Attackers could be hackers, unscrupulous vendors, disgruntled
employees or even pure thrill seekers.
3-SYSTEM ARCHITECTURE AND DESIGN RISK
Appropriate system architecture and control is an important factor in managing various kinds of
operational and security risks. A bank faces the risk that the systems it chooses are not well
designed or implemented. For example, a bank is exposed to the risk of an interruption or slow-
down of its existing systems if the electronic banking or electronic money system it chooses is
not compatible with user requirements. Many banks are likely to rely on outside service
providers and external experts to implement, operate, and support portions of their electronic
money and electronic banking activities. Such reliance may be desirable because it allows a bank
to outsource aspects of the provision of electronic banking and electronic money activities that it
cannot provide economically itself. However, reliance on outsourcing exposes a bank to
operational risks. Service providers may not have the requisite expertise to deliver services
expected by the bank, or may fail to update their technology in a timely manner. A service
provider's operations could be interrupted due to system breakdowns or financial difficulties,
jeopardizing a bank's ability to deliver products or services. The rapid pace of change that

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characterizes information technology presents banks with the risk of systems obsolescence. For
example, computer software that facilitates the use of electronic banking and electronic money
products by customers will require updating, but channels for distributing software updates pose
risks for banks in that criminal or malicious individuals could intercept and modify the software.
In addition, rapid technological change can mean that staff may fail to understand fully the
nature of new technology employed by the bank. This could result in operational problems with
new or updated systems.
4-REPUTATIONAL RISK
Reputational risk is the risk of getting significant negative public opinion, which may result in a
critical loss of funding or customers. Such risks arise from actions which cause major loss of the
public confidence in the banks' ability to perform critical functions or impair bank- customer
relationship. It may be due to banks' own action or due to third party action. The main reasons
for this risk may be system or product not working to the expectations of the customers,
significant system deficiencies, significant security breach (both due to internal and external
attack), inadequate information to customers about product use and problem resolution
procedures, significant problems with communication networks that impair customers' access to
their funds or account information especially if there are no alternative means of account access.
Such situation may cause customer-discontinuing use of product or the service. Directly affected
customers may leave the bank and others may follow if the problem is publicized.
5-LEGAL/COMPLIANCE RISK
Legal risk is the risk of non-compliance with legal or regulatory requirements. The legal risksare
directly related to the electronic banking and they are increased as its use is extended.They
mainly stem from the uncertainty that exists in the legal regulative frameworkconcerning the
electronic banking. In most countries an explicit regulating framework doesnot exist and this is
owed to the little experience regarding the sector of electronic banking.The problem becomes
even bigger when a bank offers its electronic services to othercountries as well, since a unified
legal frame in international level does not exist. Eachcountry puts its own rules into effect and it
is difficult for a bank to constantly adapt itsservices and to be acquainted with all the laws that
are in effect in every country.
Another legal risk is related with the protection of the customers' personal data. Bad use by the
bank personnel or by exterior malignant intruders can expose a bank in serious legal risks. It is
possible that the intruders acquire access in the databases of the banks and use the data of
customers in order to commit a fraud. In this case a legal risk is created by the bad or not
certified use of customers' data. The legal risks, in which the financial institutions will be
exposed from the use of electronic banking, are expected to increase because of the uncertainty
that characterizes the wider legal framework and the specific lawful regulations of transactions
through an open electronic network as the internet is.
6-STRATEGIC RISK
On strategic risk E-banking is relatively new and, as a result, there can be a lack of
understanding among senior management about its potential and implications. People with
technological, but not banking, skills can end up driving the initiatives. E-initiatives can spring
up in an incoherent and piecemeal manner in firms. They can be expensive and can fail to recoup

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their cost. Furthermore, they are often positioned as loss leaders (to capture market share), but
may not attract the types of customers that banks want or expect and may have unexpected
implications on existing business lines.
Banks should respond to these risks by having a clear strategy driven from the top and
shouldensure that this strategy takes account of the effects of e-banking, wherever relevant. Such
astrategy should be clearly disseminated across the business, and supported by a clear
businessplan with an effective means of monitoring performance against it.Poor e-banking
planning and investment decisions can increase a financial institution's strategic risk. Early
adopters of new e-banking services can establish themselves as innovators who anticipate the
needs of their customers, but may do so by incurring higher costs and increased complexity in
their operations. Conversely, late adopters may be able to avoid the higher expense and added
complexity, but do so at the risk of not meeting customer demand for additional products and
services.

Q.17 Write short note on:

1) Web traffic and its management
2) Cybercrime and its types
3) Copy rights and trade mark
4) Digital signature
5) Virtual prime network
6) Encryption and its types
Ans. 1. Web traffic and its management
Web traffic is the data sent and received by visitors to a website. Since the mid-1990s, web
traffic has been the largest portion of Internet traffic. Sites monitor the incoming and outgoing
traffic to see which parts or pages of their site are popular and if there are any apparent trends,
such as one specific page being viewed mostly by people in a particular country. There are many
ways to monitor this traffic, and the gathered data is used to help structure sites, highlight
security problems or indicate a potential lack of bandwidth.

Not all web traffic is welcomed. Some companies offer advertising schemes that, in return for
increased web traffic (visitors), pay for screen space on the site.
Web traffic management
Website traffic management describes the process of controlling the number and/or type of
visitors to a website. Website traffic refers to web users who visit a website (from a desktop or
mobile browser) as well as users of native mobile apps.
Importance of Web traffic management
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Prevent website crashes
Increasing website traffic is a common goal since it often results in more customers and sales.
However, overwhelming surges in online traffic can often overwhelm website infrastructure. The
two of the most prominent ecommerce bottlenecks are the inventory system and payment
gateway. These systems are often difficult to scale and in many cases out of the direct control of
the website. Website traffic management solutions like Queue-it throttle the rate at which traffic
arrives to a website or app to preserve satisfactory web performance
Ensure online fairness
Let’s say there are 100 pairs of sneakers available during a sale. Because of the sneakers’
popularity, there are 10,000+ visitors who arrive for the online sale.
Many of these visitors will be bots that malicious actors use to scoop up as many products as
possible to resell at huge mark-ups. They use a massive volume of the bots’ and their
programmatic speed to beat all real customers to payment confirmation.
The business owner needs to separate bots from genuine customers and needs a fair way to
assign an order to the genuine customers who want to buy. A virtual waiting room can help
achieve both goals.

2) Cybercrime and its types

What is the definition of cybercrime?
Cybercrime is any criminal activity that involves a computer, networked device or a
network. While most cybercrimes are carried out in order to generate profit for the
cybercriminals, some cybercrimes are carried out against computers or devices directly to
damage or disable them.
Types of cyber crime
Phishing scams:
Phishing is one of the main forms of social engineering attacks, and as with any social
engineering attack, it tries to trick unsuspecting users into giving away personal information.
Usually, these cybercrimes are committed by impersonating trusted and popular brands creating
fake social media profiles and rogue websites to lure users into them. These sites copy the
appearance of the real website to create a sense of security and usually ask to fill out forms with
personal information to receive some kind of benefit, such as discounts. The most refined of
these sites might include malicious scripts that scrap this information out of your browser,
without the need for forms.
Internet fraud:

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This type of scam usually asks people to send money promising a much larger sum in the short
term. The most famous one is the “Nigerian” scam, also known as the “419” scam which is the
number of Nigerian laws it violates.
These scams were already widespread through fax, telephone, and traditional mail, but the
Internet made them much easier to pull off and more widespread.
Usually, the victim receives communication from someone in need of help to move a large sum
of money from a foreign country. There are plenty of variations of this scam and more are
developed each day.
The victim will be asked to cover a small portion of the cost of moving the money or asset and
will be promised a bigger cut of the benefits when the process is over.
If the victim falls for it and transfers money, he or she will be told that complications have arisen
and that more money will be required. Of course, the victim will not recover anything and this
will go on until the scammer feels like there’s nothing to gain from this victim and jump to
another one.
Identity theft:
Identity theft is closely related to the phishing scams that were discussed earlier. As another
computer as a tool for cybercrimes, they existed much earlier than the Internet did, but it has
certainly improved their reach and ease of execution.
Identity theft exists in two main forms, depending on the information stolen. These forms are
impersonation as the lesser evil if only personal information or accounts without payment
methods saved were stolen. However, it can be much worse if credit card information or
accounts containing it was stolen since the cybercriminal can make purchases charged to your
account.
This also applies to companies, but on top of it, you should be aware that former employees
might be disgruntled and retain access to your accounts.

3) Copy rights and trade marks

Copyrights protect “original works of authorship,” such as writings, art, architecture, and
music. For as long as the copyright is in effect, the copyright owner has the sole right to display,
share, perform, or license the material.8
One notable exception is the “fair use” doctrine, which allows some degree of distribution of
copyrighted material for scholarly, educational, or news-reporting purposes.9
Technically, you don’t have to file for a copyright to have the piece of work protected. It’s
considered yours once your ideas are translated into a tangible form, such as a book, music, or
published research; however, officially registering with the U.S. Copyright Office before—or

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within five years of—publishing your work makes it a lot easier to establish that you were the
original author if you ever have to go to court.
Trademark can be any word, phrase, symbol, design, or a combination of these things that
identifies your goods or services. It’s how customers recognize you in the marketplace and
distinguish you from your competitors.
The word “trademark” can refer to both trademarks and service marks. A trademark is used for
goods, while a service mark is used for services.
A trademark:
 Identifies the source of your goods or services.
 Provides legal protection for your brand.
 Helps you guard against counterfeiting and fraud.
A common misconception is that having a trademark means you legally own a particular word or
phrase and can prevent others from using it. However, you don’t have rights to the word or
phrase in general, only to how that word or phrase is used with your specific goods or services.
For example, let's say you use a logo as a trademark for your small woodworking business to
identify and distinguish your goods or services from others in the woodworking field. This
doesn't mean you can stop others from using a similar logo for non-woodworking related goods
or services.

4) Digital signature
A digital signature is a mathematical scheme for verifying the authenticity of digital messages
or documents. A valid digital signature, where the prerequisites are satisfied, gives a recipient
very high confidence that the message was created by a known sender (authenticity), and that the
message was not altered in transit (integrity)
Digital signatures are a standard element of most cryptographic protocol suites, and are
commonly used for software distribution, financial transactions, contract management software,
and in other cases where it is important to detect forgery or tampering.
Digital signatures are often used to implement electronic signatures, which includes any
electronic data that carries the intent of a signature, but not all electronic signatures use digital
signatures. Electronic signatures have legal significance in some countries,
including Canada, South Africa, the United
States, Algeria, Turkey, India, Brazil, Indonesia, Mexico, Saudi
Arabia, Uruguay, Switzerland, Chile and the countries of the European Union.

5) Virtual private network

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A virtual private network, or VPN, is an encrypted connection over the Internet from a device to
a network. The encrypted connection helps ensure that sensitive data is safely transmitted. It
prevents unauthorized people from eavesdropping on the traffic and allows the user to conduct
work remotely. VPN technology is widely used in corporate environments.

6) Encryption and its types

Encryption is a form of data security in which information is converted to cipher text. Only
authorized people who have the key can decipher the code and access the original plaintext
information.
In even simpler terms, encryption is a way to render data unreadable to an unauthorized party.
This serves to thwart cybercriminals, who may have used quite sophisticated means to gain
access to a corporate network—only to find out that the data is unreadable and therefore useless.
Encryption not only ensures the confidentiality of data or messages but it also provides
authentication and integrity, proving that the underlying data or messages have not been altered
in any way from their original state.
Types of Encryption

There are two types of encryption in widespread use

today: symmetric and asymmetric encryption. The name derives from whether or not the same
key is used for encryption and decryption.

What is symmetric encryption?

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In symmetric encryption the same key is used for encryption and decryption. It is therefore
critical that a secure method is considered to transfer the key between sender and recipient.

Figure
2: Symmetric encryption – Using the same key for encryption and decryption
What is asymmetric encryption?
Asymmetric encryption uses the notion of a key pair: a different key is used for the encryption
and decryption process. One of the keys is typically known as the private key and the other is
known as the public key.
The private key is kept secret by the owner and the public key is either shared amongst
authorised recipients or made available to the public at large.
Data encrypted with the recipient’s public key can only be decrypted with the corresponding
private key. Data can therefore be transferred without the risk of unauthorised or unlawful access
to the data.

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Q18 what is IT act 2000? Discuss its application in ecommerce.
Ans.The Information Technology Act, 2000 also Known as an IT Act is an act proposed by the
Indian Parliament reported on 17th October 2000. This Information Technology Act is based on
the United Nations Model law on Electronic Commerce 1996 (UNCITRAL Model) which was
suggested by the General Assembly of United Nations by a resolution dated on 30th January,
1997. It is the most important law in India dealing with Cybercrime and E-Commerce.
The main objective of this act is to carry lawful and trustworthy electronic, digital and online
transactions and alleviate or reduce cybercrimes. The IT Act has 13 chapters and 90 sections.
The last four sections that starts from ‘section 91 – section 94’, deals with the revisions to the
Indian Penal Code 1860.

The IT Act, 2000 has two schedules:

 First Schedule –
Deals with documents to which the Act shall not apply.
 Second Schedule –
Deals with electronic signature or electronic authentication method.
The offences and the punishments that falls under the IT Act, 2000 are as follows:-

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1. Tampering with the computer source documents.
2. Directions of Controller to a subscriber to extend facilities to decrypt information.
3. Publishing of information which is obscene in electronic form.
4. Penalty for breach of confidentiality and privacy.
5. Hacking for malicious purposes.
6. Penalty for publishing Digital Signature Certificate false in certain particulars.
7. Penalty for misrepresentation.
8. Confiscation.
9. Power to investigate offences.
10. Protected System.
11. Penalties for confiscation not to interfere with other punishments.
12. Act to apply for offence or contravention committed outside India.
13. Publication for fraud purposes.
14. Power of Controller to give directions.

Features of the Information Technology Act, 2000

All electronic contracts made through secure electronic channels are legally valid.
Legal recognition for digital signatures.
Security measures for electronic records and also digital signatures are in place
A procedure for the appointment of adjudicating officers for holding inquiries under the Act is
finalized
Provision for establishing a Cyber Regulatory Appellant Tribunal under the Act. Further, this
tribunal will handle all appeals made against the order of the Controller or Adjudicating Officer.
An appeal against the order of the Cyber Appellant Tribunal is possible only in the High Court
Digital Signatures will use an asymmetric cryptosystem and also a hash function
Provision for the appointment of the Controller of Certifying Authorities (CCA) to license and
regulate the working of Certifying Authorities. The Controller to act as a repository of all digital
signatures.

Q.19 Discuss the following in detail.

1) Ecommerce in manufacturing industry
2) Ecommerce in service industry
3) Ecommerce in management consulting
4) Ecommerce in financial services
5) Ecommerce in travel and tourism
Ans. 1.Ecommerce in manufacturing industry
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Due to the internet’s large penetration, there is an increase in a large number of technologies and
web users. Moreover, it has helped in providing a big opportunity for both the manufacturing
industry and consumers as well. In the last decade applications for E-Commerce in the
manufacturing industry have evolved a lot from a transaction between a buyer and seller, basic
communication, and collaborating medium between various stakeholders.
This collaboration helps manufacturing companies to increase their sales by offering
recommendations for online products and promotions. Plus, E-Commerce is an opportunity for
manufacturers to experiment with new products without taking any risk. So, for that
manufacturing industries hire E-Commerce developer for developing their application for E-
Commerce.
Benefits of ecommerce in manufacturing industry
Provides Direct Access to Customers
Other than having margins for high profits, manufacturing industries can communicate with their
customers. Because it allows them to learn from their customers and fine-tune their products in a
good way.
Being Innovative
Finding new customers outside the manufacturing industry’s channel frees them from the specs
they have to adhere to till now. Moreover, if they have any idea for a good looking product, they
act on it by doing an analysis of the product and its iterations as time goes by making the product
according to the customer's needs and requirements.
Provides Improved Efficiency
By integrating ERP (Enterprise Resource Planning) and other business back-end systems, E-
Commerce applications provide various efficiencies marked for consumers. Customers can order
online from anywhere and at any time they want to. Moreover, customer services can focus on
functions of actual customer services such as shipping costs, timely shipping, etc.
Therefore, manufacturing industries should eliminate the errors and improve the shipping
processes and increase the throughput of the order.

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2) Ecommerce in service industry
The delivery of services via the internet to consumers or other businesses can be referred to by
the generic term of e-services. There is a wide range of e-services currently offered through the
internet and these include banking, loans, stock trading, jobs and career sites, travel, education,
consultancy advice, insurance, real estate, broker services, on-line publishing, and on-line
delivery of media content such as videos, computer games, etc. This list is by no means
exhaustive and it is growing all the time. In this lecture, we will give an overview of
eservices.Eb-Enabled Services
Web-enabled services include personal banking, stock trading, and education.
E-banking
Security First Network Bank (SFNB ;) was the first internet bank. It provides most of the
banking services on the web. Therefore, you can do your banking with your fingers instead of
your feet. Looking at e-banking, we can distinguish between twp. distinct models:
1. Pure cyber banks
2. Traditional banks that provide e-banking to complement their retail banking SFNB. Is a
pure cyber bank, while the homepage of Bank of America illustrates the second model?
While not all banks offer the full range of services on the internet, banks in both the mentioned
groups offer a varied range of services including
1. personal banking
2. commercial banking for both small businesses and large corporations
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 3. financial services
4. loan application services
5. International trade including settlement instruments, foreign exchange transactions, etc.
There are significant advantages for both the individual and corporation as well as the bank in
using e-banking. An individual doing personal banking on the internet can, amongst other things,
pay bills, do account transfers, make queries on account balances, obtain statements, in some
cases view images of checks, etc., and import transactions directly into home account
management software. Furthermore, one can make such transactions 24 hours a day from any
place with internet access around the world. In addition to these, a number of banks offer
personal financial services including making personal loan applications on the internet. All these
represent a large increase in convenience and time saving for the bank customer, saving him trips
to the bank branch, queuing, etc.
The advantages to the banking institutions themselves include
1. Reduction in the number of retail banking branches, saving rentals or ownership of the
related properties.
2. Reduction in staffing because of the reduction in paper processing as well as face-to face
bank teller contact.
3. Bringing about increase in the time the bank hangs on to the money before making the
required transfers, leading to increase in interest received by the banks. These advantages
are so significant that some banks offer customers a number of incentives to -switch to
internet banking, such as free checks, reduced fees, increased deposit rates, etc.
E-stock trading and e-investing
Several companies such as E-Trade .Datek.on-line, American Express Financial Services, etc.
allow you to trade stocks, bonds, mutual funds, etc. on the internet. These companies offer you to
trade at a very small cost compared to discount brokers or full-service brokers. This has resulted
in these on-line trading companies grabbing an increasing market share. In response to this,
discount brokers including Charles Schwab and full-service brokers have also moved to
introduce internet trading of stocks.
The steps involved essentially are the following:
1. place a request to trade, say buy a stock
2. the system responds with current “on the web site” prices
3. The internet trader has to confirm this trade or cancel it Several companies allow one to
create a simulated portfolio, which one watches over time without actually buying or
selling the stocks in reality. An example of this can be found on the Smart Money site .
The major advantages to the person doing the trading are

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 1. the reduced cost;
2. the convenience of being able to trade anywhere in the world with internet access, e.g.
while travelling; and
3. Access to a wide variety of information on a number of sites.
In addition to actually allowing you to trade, these sites provide a considerable amount of
information. The reduction in margins available to stockbrokers as a result of internet trading is
beginning to have an effect on other more traditional forms of brokers. This has led to some
traditional brokers also providing internet trading of stocks.
E-education
A number of e-universities are being spawned around the world. Again, three models can be
seen:
1. Pure cyber universities, such as Jones International University
2. Traditional universities setting up new cyber vehicles for providing university education
perhaps with other business partners. An example of this the Hong Kong Cyber .which
was set by the Hong Kong Polytechnic University and Pacific Century Cyber Works.
3. Traditional universities offering courses themselves on the internet. There are a number
of web-based technology tools for this purpose. An example is Web CT. A number of so
called “open universities” that previously provided distance learning have moved into
providing an internet-based version of their courses. These traditional universities have a
number of advantages. They can now reach a client base that is outside their catchment.
3. Ecommerce in management consulting
Management consultants are typically well educated and technology friendly. Firms of all sizes
are under competitive pressures like never before and are adapting to increase their value
proportion of client. Large firms are increasingly using groupware that allow their practitioners
in all locations to access corporate data documenting, for example past assignments, best practice
and other overhead items. Consultants of all sizes are using technological advances to promote
themselves better and have faster more valuable communication with the clients
4. Ecommerce in financial services
E-Commerce Financial Services

Predictions are, that by 2040, nearly all retail purchases (95%) will be made online. If
these predictions come true, the global retail e-commerce level will reach $24 trillion. A
big part of the benefits of e-commerce for retailers will come from the online sales and
purchases of e-commerce financial services. The fintech applications for e-commerce
will allow retailers to capture a big share of fintech products sales.

Impact of E-Commerce on Financial Services

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It has been transformational in how e-commerce impacts banking. Trips to a physical
bank branch are no longer necessary by utilizing the vast array of online services offered
by major banks. This includes the basics of direct deposits of pay checks, online bill
paying, and many other convenient banking services.

Financial service companies that compete with banks can offer many things, besides
basic banking, to their customers online.

1. Digital Currency and Cryptocurrency

Physical currency is being retired in many nations to be replaced by digital versions of
currency. This may shift to cryptocurrency eventually for its added security protections
and usefulness.
2. Services for the Unbanked
In developing countries, billions of people do not have a bank account. Moreover, a
significant portion of people in developed countries, such as 25% in the U.S. as reported
by CNBC, are unbanked or underbanked as well. By creating e-commerce/fintech hybrid
services, online retailers may sell products and offer financial services to their customers,
thereby substituting for a bank.
3. Permanent Digital Archive Records
Block chain technology, which derives from cryptocurrency applications, is now used to
make permanent encrypted records of financial transactions that are public. There will be
no need for individuals to keep any records/receipts when they can access these
permanent records online. The use of blockchain technology can reduce fraud.
4. Artificial Intelligence and Big Data Mining
Artificial intelligence (AI) is already being applied to analyse Big Data and look for
patterns. Online retailers can cross-reference purchasing activity with other Big Data
metrics to predict behaviours. Behavioural analysis of customer patterns improves the
impact of marketing. This allows an online retailer to present products and/or service
offerings at the most appropriate moment when they have the greatest relevance for a
person. Moreover, fraud can also be reduced by AI mining of Big Data to gain insights
about patterns of criminal behaviour to help prevent it.

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5. Ecommerce in travel and tourism
E-commerce has changed the whole concept of travel and tourism. Both consumers and
the industry are taking advantage of e-commerce and expanding their businesses for
good. With this huge phase of expansion, let us take a look at how it has been beneficial
for travel and tourism industry.

1. Online Booking

Customers are no more required to visit offices and travel agents anymore. The whole
booking system is online with a feasible payment system. Every system works
individually but the integration of this set-up is helping to build and increase business.

2. Managing Recessions

The e-commerce industry has amazingly affected recessions. A recession is the period of
loss that lasts for almost six months. E-commerce technology has introduced the quick
recovery of recession through its ideal solutions to the problems that arise.

3. Automation and Networking

GPS is one of the greatest technologies that helps you in the industry of travel and
tourism. If you’ll look up any of the transportation services, e-commerce is the one thing
that is helping you to connect and offer the best services to the consumers.

4. Additional Global Market

E-Commerce technology gives you better know-how about the additional market. The
travel industry is not limited to a country or a city but it is globally targeting its
customers. People can now book their trips to the exotic destinations from anywhere,
such as their office or even the comfort of their own homes. E-commerce allows you to

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 connect to the additional market around the world and provide the most feasible services
to your clients, even if they are located overseas.

5. Ease of Accessibility

The planning and the strategy processes of business are now as easy as reaching out to
the market. The travel agents can now get to know more about the competitors and plan
their business accordingly. Apart from the bulk of information, it provides to the ease of
accessibility to the customers and competitor behaviour. It makes it all easy for people to
connect and grow together.

Q20 what is a virtual organisation? Discuss its features, merits and demerits
Ans. A virtual organization is an operation where all members of the company work in
different geographic locations while appearing as a single unit. It uses computers,
software, phones and other technology to work together and converse in real-time,
despite any physical distance. It's important for virtual organizations to establish detailed
procedures that ensure consistency in employee performance and provide employees with
the ample resources and support they need to conduct their responsibilities in a remote
work environment.

Features of Virtual organisation

Each virtual organization is unique, although they often include many of the same
components for optimal operations, like a remote workforce and company-specific
technology networks. Other components of a virtual organization may include:
 A flat organization structure with less middle management
 Virtual teams
 Loose organizational structure
 Boundaries and expectations
 Power flexibility
 Informal communication
Merits of virtual organisation
Lower overhead costs
Virtual organizations often have lower overhead costs because they don't need to pay monthly
fees for renting office spaces. Companies also save money by not having to pay supplemental
fees involved with renting a space, like utilities and maintenance costs. Some organizations also
ask employees to use their own equipment, such as personal computers and web cameras,
reducing equipment costs.
Improved employee satisfaction
Many virtual organizations have higher levels of employee satisfaction, presumably from the
increased freedom employees have to work in their own space. Some employees feel less

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stressed, and the flexibility of working remotely often reduces absences. This helps improve
overall company morale and can encourage individuals to present quality work on behalf of their
employer.
Improved efficiency
Virtual organizations don't have the same distractions as traditional office settings, such as the
urge to chat with people surrounding you. With fewer distractions, efficiency may improve,
resulting in higher levels of productivity and better-quality work. Employees can establish their
own work environment, allowing them to determine what helps them best achieve more work in
less time.
Larger hiring market
Virtual organizations can hire employees from anywhere in the world. This removes geographic
restrictions, expanding the talent pool for hiring and allowing companies to hire individuals with
varying backgrounds and perspectives. This allows organizations to find, recruit and hire the best
talent without physical locations getting in the way.
Flexible hours
Virtual organizations often have flexible hours, with many employers allow employees to
determine their own schedules within certain parameters. For example, some companies
establish core hours, such as 10 a.m. to 2 p.m. within a specific time zone each day, and allow
employees to work whenever they want outside of those hours. This level of flexibility often
allows organizations to accommodate a variety of different employees and their lifestyles.

Demerits of virtual organisation

1. The lack of physical interactions with its associated verbal and non-verbal cues and also the
synergies that often accompany face-to-face interaction
2. Non-availability of paraverbal and non-verbal cues such as voice, eye movement, facial
expression, and body language which help in better communication.
3. Ability to work even if the virtual teams are miles apart and the members have never or rarely
met each other face-to-face.

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