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Online banking

Online banking (or Internet banking or E-banking) allows customers of a financial institution to conduct financial transactions on a secured website operated by the institution, which can be a retail bank,virtual bank, credit union or building society.

To access a financial institution's online banking facility, a customer having personal Internet access must register with the institution for the service, and set up some password (under various names) for customer verification. The password for online banking is normally not the same as for [telephone banking]. Financial institutions now routinely allocate customers numbers (also under various names), whether or not customers intend to access their online banking facility. Customers numbers are normally not the same as account numbers, because number of accounts can be linked to the one customer number. The customer will link to the customer number any of those accounts which the customer controls, which may be cheque, savings, loan, credit card and other accounts. Customer numbers will also not be the same as any debit or credit card issued by the financial institution to the customer.

To access online banking, the customer would go to the financial institution's website, and enter the online banking facility using the customer number and password. Some financial institutions have set up additional security steps for access, but there is no consistency to the approach adopted.

Contents  [hide] 
1 Features
2 History
3 Security
3.1 Attacks
3.2 Countermeasures
4 See also
5 References
6 External links
Features[edit]
Question book-new.svg
This section does not cite any references or sources. Please help improve this section by adding citations to reliable sources. Unsourced material may be challenged and removed. (April 2013)
Online banking facilities offered by various financial institutions have many features and capabilities in common, but also have some that are application specific.

The common features fall broadly into several categories
A bank customer can perform non-transactional tasks through online banking, including -
viewing account balances
viewing recent transactions
downloading bank statements, for example in PDF format
viewing images of paid cheques
ordering cheque books
download periodic account statements
Downloading applications for M-banking, E-banking etc.
Bank customers can transact banking tasks through online banking, including -
Funds transfers between the customer's linked accounts
Paying third parties, including bill payments (see, e.g., BPAY) and telegraphic/wire transfers
Investment purchase or sale
Loan applications and transactions, such as repayments of enrollments
Register utility billers and make bill payments
Financial institution administration
Management of multiple users having varying levels of authority
Transaction approval process
the process of banking has become much faster
Some financial institutions offer unique Internet banking services, for example
Personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.
History[edit]
The precursor for the modern home online banking services were the distance banking services over electronic media from the early 1980s. The term online became popular in the late '80s and referred to the use of a terminal, keyboard and TV (or monitor) to access the banking system using a phone line. 'Home banking' can also refer to the use of a numeric keypad to send tones down a phone line with instructions to the bank. Online services started in New York in 1981 when four of the city's major banks (Citibank, Chase Manhattan, Chemical and Manufacturers Hanover) offered home banking services.[1][2][3] using the videotex system. Because of the commercial failure of videotex these banking services never became popular except in France where the use of videotex (Minitel) was subsidised by the telecom provider and the UK, where the Prestel system was used.

The UK's first home online banking services known as Homelink was set up by Bank of Scotland for customers of the Nottingham Building Society (NBS) in 1983. The system used was based on the UK's Prestel viewlink system and used a computer, such as the BBC Micro, or keyboard (Tandata Td1400) connected to the telephone system and television set. The system allowed on-line viewing of statements, bank transfers and bill payments. In order to make bank transfers and bill payments, a written instruction giving details of the intended recipient had to be sent to the NBS who set the details up on the Homelink system. Typical recipients were gas, electricity and telephone companies and accounts with other banks. Details of payments to be made were input into the NBS system by the account holder via Prestel. A cheque was then sent by NBS to the payee and an advice giving details of the payment was sent to the account holder. BACS was later used to transfer the payment directly.

Stanford Federal Credit Union was the first financial institution to offer online internet banking services to all of its members in October 1994.[4]

Today, many banks are internet only banks. Unlike their predecessors, these internet only banks do not maintain brick and mortar bank branches. Instead, they typically differentiate themselves by offering better interest rates and more extensive online banking features.

Security[edit]


Security token device for online banking.
Security of a customer's financial information is very important, without which online banking could not operate. Financial institutions have set up various security processes to reduce the risk of unauthorized online access to a customer's records, but there is no consistency to the various approaches adopted.

The use of a secure website has become almost universally adopted.

Though single password authentication is still in use, it by itself is not considered secure enough for online banking in some countries. Basically there are two different security methods in use for online banking.

The PIN/TAN system where the PIN represents a password, used for the login and TANs representing one-time passwords to authenticate transactions. TANs can be distributed in different ways, the most popular one is to send a list of TANs to the online banking user by postal letter. Another way of using TANs is to generate them by need using a security token. These token generated TANs depend on the time and a unique secret, stored in the security token (two-factor authentication or 2FA).
More advanced TAN generators (chipTAN) also include the transaction data into the TAN generation process after displaying it on their own screen to allow the user to discover man-in-the-middle attacks carried out by trojans trying to secretly manipulate the transaction data in the background of the PC.[5]
Another way to provide TANs to an online banking user is to send the TAN of the current bank transaction to the user's (GSM) mobile phone via SMS. The SMS text usually quotes the transaction amount and details, the TAN is only valid for a short period of time. Especially in Germany, Austria and The Netherlands, many banks have adopted this "SMS TAN" service.
Usually online banking with PIN/TAN is done via a web browser using SSL secured connections, so that there is no additional encryption needed.
Signature based online banking where all transactions are signed and encrypted digitally. The Keys for the signature generation and encryption can be stored on smartcards or any memory medium, depending on the concrete implementation.
Attacks[edit]
Attacks on online banking used today are based on deceiving the user to steal login data and valid TANs. Two well known examples for those attacks are phishing and pharming. Cross-site scripting and keylogger/Trojan horses can also be used to steal login information.

A method to attack signature based online banking methods is to manipulate the used software in a way, that correct transactions are shown on the screen and faked transactions are signed in the background.

A 2008 U.S. Federal Deposit Insurance Corporation Technology Incident Report, compiled from suspicious activity reports banks file quarterly, lists 536 cases of computer intrusion, with an average loss per incident of $30,000. That adds up to a nearly $16-million loss in the second quarter of 2007. Computer intrusions increased by 150 percent between the first quarter of 2007 and the second. In 80 percent of the cases, the source of the intrusion is unknown but it occurred during online banking, the report states.[6]

Another kind of attack is the so-called Man in the Browser attack, where a Trojan horse permits a remote attacker to modify the destination account number and also the amount.

As a reaction to advanced security processes allowing the user to cross check the transaction data on a secure device there are also combined attacks using malware and social engineering to persuade the user himself to transfer money to the fraudsters on the ground of false claims (like the claim the bank would require a "test transfer" or the claim a company had falsely transferred money to the user's account and he should "send it back").[7] [8] Users should therefore never perform bank transfers they have not initiated themselves.

Countermeasures[edit]
There exist several countermeasures which try to avoid attacks. Digital certificates are used against phishing and pharming, in signature based online banking variants (HBCI/FinTS) the use of "Secoder" card readers is a measurement to uncover software side manipulations of the transaction data.[9] To protect their systems against Trojan horses, users should use virus scanners and be careful with downloaded software or e-mail attachments.

In 2001, the U.S. Federal Financial Institutions Examination Council issued guidance for multifactor authentication (MFA) and then required to be in place by the end of 2006.[10]

In 2012 the European Union Agency for Network and Information Security advised all banks to consider the PC systems of their users being infected by malware by default and therefore use security processes where the user can cross check the transaction data against manipulations like for example (provided the security of the mobile phone holds up) SMS TAN where the transaction data is send along with the TAN number or standalone smartcard readers with an own screen including the transaction data into the TAN generation process while displaying it beforehand to the user (see chipTAN) to counter man-in-the-middle attacks.[11]

See also[edit]
Current account
Enhanced Telephone
Guide to E-payments
Mobile banking
On-line and off-line
SMS Banking
Single sign-on
Telephone banking
e banking in india

MORE INFO

Software

For other uses, see Software (disambiguation).

This article needs additional citations for verification. Please help improve this article by adding citations to reliable sources. Unsourced material may be challenged and removed. (September 2013)
Computer software, or simply software, also known as computer programs, is the non-tangible component of computers. Computer software contrasts with computer hardware, which is the physical component of computers. Computer hardware and software require each other and neither can be realistically used without the other.

Computer software includes all computer programs regardless of their architecture; for example, executable files, libraries and scripts are computer software. Yet, it shares their mutual properties: software consists of clearly defined instructions that upon execution, instructs hardware to perform the tasks for which it is designed. Software is stored in computer memory and cannot be touched, just as a 3D model shown in an illustration cannot be touched.[1]

At the lowest level, executable code consists of machine language instructions specific to an individual processor – typically a central processing unit (CPU). A machine language consists of groups of binary values signifying processor instructions that change the state of the computer from its preceding state. For example, an instruction may change the value stored in a particular storage location inside the computer – an effect that is not directly observable to the user. An instruction may also (indirectly) cause something to appear on a display of the computer system – a state change which should be visible to the user. The processor carries out the instructions in the order they are provided, unless it is instructed to "jump" to a different instruction, or interrupted.

Software is usually written in high-level programming languages that are easier and more efficient for humans to use (closer to natural language) than machine language.[2] High-level languages are compiled or interpreted into machine language object code. Software may also be written in a low-level assembly language, essentially, a vaguely mnemonic representation of a machine language using a natural language alphabet. Assembly language is converted into object code via an assembler.

Contents  [hide] 
1 History
2 Types of software
2.1 Purpose, or domain of use
2.2 Nature, or domain of execution
2.3 Programming tools
3 Software topics
3.1 Architecture
3.2 Execution
3.3 Quality and reliability
3.4 License
3.5 Patents
4 Design and implementation
5 Industry and organizations
6 See also
7 References
8 External links
History[edit]
Main article: History of software
Types of software[edit]
See also: List of software categories


A diagram showing how the operating system software and application software are layered on a typical desktop computer. The arrows indicate information flow.
On virtually all computer platforms, software can be grouped into a few broad categories.

Purpose, or domain of use[edit]
Based on the goal, computer software can be divided into:

Application software uses the computer system to perform useful work or provide entertainment functions beyond the basic operation of the computer itself.
System software is designed to operate the computer hardware, to provide basic functionality, and to provide a platform for running application software.[3] System software includes:
Operating system, an essential collection of computer programs that manages resources and provides common services for other software. Supervisory programs, boot loaders, shells and window systems are core parts of operating systems. In practice, an operating system comes bundled with additional software (including application software) so that a user can potentially do some work with a computer that only has an operating system.
Device driver, a computer program that operates or controls a particular type of device that is attached to a computer. Each device needs at least one corresponding device driver; thus a computer needs more than one device driver.
Utilities, software designed to assist users in maintenance and care of their computers.
Malicious software or malware, computer software developed to harm and disrupt computers. As such, malware is undesirable. Malware is closely associated with computer-related crimes, though some malicious programs may have been designed as practical jokes.
Nature, or domain of execution[edit]
Desktop applications such as web browsers and Microsoft Office, as well as smartphone and tablet applications (called "apps").
Server software
Scripts, such as JavaScript scripts are pieces of software traditionally embedded in web pages that are run directly inside the web browser when a web page is loaded, without the need for a web browser plugin. Software written in other programming languages can also be run within the web browser if the software is either translated into JavaScript, or if a web browser plugin that supports that language is installed; the most common example of the latter is ActionScript scripts, which are supported by the Adobe Flash plugin.
Web applications usually run on the web server and output dynamically generated web pages to web browsers, using e.g. PHP, Java or ASP.NET, or even JavaScript that runs on the server; in modern times they commonly include some JavaScript to be run in the web browser as well, in which case they typically run partly on the server, partly in the web browser.
Plugins and extensions are software that extends or modifies the functionality of another piece of software, and require that software be used in order to function;
Embedded software resides as firmware within embedded systems, devices dedicated to a single use or a few uses such as cars and televisions (although some embedded devices such as wireless chipsets can themselves be part of an ordinary, non-embedded computer system such as a PC or smartphone).[4] In the embedded system context there is sometimes no clear distinction between the system software and the application software. However, some embedded systems run embedded operating systems, and these systems do retain the distinction between system software and application software (although typically there will only be one, fixed, application which is always ran).
Microcode is a special, relatively obscure type of embedded software which tells the processor itself how to execute machine code, so it is actually a lower level than machine code.[5] It is typically proprietary to the processor manufacturer, and any necessary correctional microcode software updates are supplied by them to users (which is much cheaper than shipping replacement processor hardware). Thus an ordinary programmer would not expect to ever have to deal with it.
Programming tools[edit]
Main article: Programming tool
Programming tools are software in the form of programs or applications that software developers (also known as programmers, coders, hackers or software engineers) use to create, debug, maintain (i.e. improve or fix), or otherwise support software. Software is written in one or more programming languages; there are many programming languages in existence, and each has at least one implementation, each of which consists of its own set of programming tools. These tools may be relatively self-contained programs such as compilers, debuggers, interpreters, linkers, and text editors, that can be combined together to accomplish a task; or they may form an integrated development environment (IDE), which combines much or all of the functionality of such self-contained tools. IDEs may do this by either invoking the relevant individual tools or by re-implementing their functionality in a new way. An IDE can make it easier to do specific tasks, such as searching in files in a particular project. Many programming language implementations provide the option of using both individual tools or an IDE.

Software topics[edit]
Architecture[edit]
See also: Software architecture
Users often see things differently than programmers. People who use modern general purpose computers (as opposed to embedded systems, analog computers and supercomputers) usually see three layers of software performing a variety of tasks: platform, application, and user software.

Platform software: Platform includes the firmware, device drivers, an operating system, and typically a graphical user interface which, in total, allow a user to interact with the computer and its peripherals (associated equipment). Platform software often comes bundled with the computer. On a PC one will usually have the ability to change the platform software.
Application software: Application software or Applications are what most people think of when they think of software. Typical examples include office suites and video games. Application software is often purchased separately from computer hardware. Sometimes applications are bundled with the computer, but that does not change the fact that they run as independent applications. Applications are usually independent programs from the operating system, though they are often tailored for specific platforms. Most users think of compilers, databases, and other "system software" as applications.
User-written software: End-user development tailors systems to meet users' specific needs. User software include spreadsheet templates and word processor templates. Even email filters are a kind of user software. Users create this software themselves and often overlook how important it is. Depending on how competently the user-written software has been integrated into default application packages, many users may not be aware of the distinction between the original packages, and what has been added by co-workers.
Execution[edit]
Main article: Execution (computing)
Computer software has to be "loaded" into the computer's storage (such as the hard drive or memory). Once the software has loaded, the computer is able to execute the software. This involves passing instructions from the application software, through the system software, to the hardware which ultimately receives the instruction as machine code. Each instruction causes the computer to carry out an operation – moving data, carrying out a computation, or altering the control flow of instructions.

Data movement is typically from one place in memory to another. Sometimes it involves moving data between memory and registers which enable high-speed data access in the CPU. Moving data, especially large amounts of it, can be costly. So, this is sometimes avoided by using "pointers" to data instead. Computations include simple operations such as incrementing the value of a variable data element. More complex computations may involve many operations and data elements together.

Quality and reliability[edit]
Main articles: Software quality, Software testing and Software reliability
Software quality is very important, especially for commercial and system software like Microsoft Office, Microsoft Windows and Linux. If software is faulty (buggy), it can delete a person's work, crash the computer and do other unexpected things. Faults and errors are called "bugs." Many bugs are discovered and eliminated (debugged) through software testing. However, software testing rarely – if ever – eliminates every bug; some programmers say that "every program has at least one more bug" (Lubarsky's Law). All major software companies, such as Microsoft, Novell and Sun Microsystems, have their own software testing departments with the specific goal of just testing. Software can be tested through unit testing, regression testing and other methods, which are done manually, or most commonly, automatically, since the amount of code to be tested can be quite large. For instance, NASA has extremely rigorous software testing procedures for many operating systems and communication functions. Many NASA-based operations interact and identify each other through command programs called software. This enables many people who work at NASA to check and evaluate functional systems overall. Programs containing command software enable hardware engineering and system operations to function much easier together.

License[edit]
Main article: Software license
The software's license gives the user the right to use the software in the licensed environment. Some software comes with the license when purchased off the shelf, or an OEM license when bundled with hardware. Other software comes with a free software license, granting the recipient the rights to modify and redistribute the software. Software can also be in the form of freeware or shareware.

Patents[edit]
Main articles: Software patent and Software patent debate
Software can be patented in some but not all countries; however, software patents can be controversial in the software industry with many people holding different views about it. The controversy over software patents is about specific algorithms or techniques that the software contains, which may not be duplicated by others and considered intellectual property and copyright infringement depending on the severity.

Design and implementation[edit]
Main articles: Software development, Computer programming and Software engineering
Design and implementation of software varies depending on the complexity of the software. For instance, design and creation of Microsoft Word software will take much more time than designing and developing Microsoft Notepad because of the difference in functionalities in each one.

Software is usually designed and created (coded/written/programmed) in integrated development environments (IDE) like Eclipse, Emacs and Microsoft Visual Studio that can simplify the process and compile the program. As noted in different section, software is usually created on top of existing software and the application programming interface (API) that the underlying software provides like GTK+, JavaBeans or Swing. Libraries (APIs) are categorized for different purposes. For instance, JavaBeans library is used for designing enterprise applications, Windows Forms library is used for designing graphical user interface (GUI) applications like Microsoft Word, and Windows Communication Foundation is used for designing web services. Underlying computer programming concepts like quicksort, hash table, array, and binary tree can be useful to creating software. When a program is designed, it relies on the API. For instance, if a user is designing a Microsoft Windows desktop application, he/she might use the .NET Windows Forms library to design the desktop application and call its APIs like Form1.Close() and Form1.Show()[6] to close or open the application and write the additional operations him/herself that it need to have. Without these APIs, the programmer needs to write these APIs him/herself. Companies like Sun Microsystems, Novell, and Microsoft provide their own APIs so that many applications are written using their software libraries that usually have numerous APIs in them.

Computer software has special economic characteristics that make its design, creation, and distribution different from most other economic goods.[specify][7][8]

A person who creates software is called a programmer, software engineer or software developer, terms that all have a similar meaning.

Industry and organizations[edit]
Main article: Software industry
A great variety of software companies and programmers in the world comprise a software industry. Software can be quite a profitable industry: Bill Gates, the founder of Microsoft was the richest person in the world in 2009 largely by selling the Microsoft Windows and Microsoft Office software products. The same goes for Larry Ellison, largely through his Oracle database software. Through time the software industry has become increasingly specialized.

Non-profit software organizations include the Free Software Foundation, GNU Project and Mozilla Foundation. Software standard organizations like the W3C, IETF develop software standards so that most software can interoperate through standards such as XML, HTML, HTTP or FTP.

Other well-known large software companies include Novell, SAP, Symantec, Adobe Systems, and Corel, while small companies often provide innovation.

MORE INFO

Online shopping
From Wikipedia, the free encyclopedia
"Web store" redirects here. For the W3C storage standard, see Web Storage.

This article may require cleanup to meet Wikipedia's quality standards. The specific problem is: references and writing style. Please help improve this article if you can. (May 2013)
Part of a series on
E-commerce
Online goods and services
E-books Software Streaming media
Retail services
Banking DVD-by-mail Flower delivery Food ordering Pharmacy Travel
Marketplace services
Advertising Auctions Comparison shopping Social commerce Trading communities Wallet
Mobile commerce
Payment Ticketing
Customer service
Call centre Help desk Live support software
E-procurement
Purchase-to-pay
v t e
Online shopping or e-shopping is a form of electronic commerce which allows consumers to directly buy goods or services from a seller over the Internet using a web browser. Alternative names are: e-web-store, e-shop, e-store, Internet shop, web-shop, web-store, online store, online storefront and virtual store. Mobile commerce (or m-commerce) describes purchasing from an online retailer's mobile optimized online site or app.

An online shop evokes the physical analogy of buying products or services at a bricks-and-mortar retailer or shopping center; the process is called business-to-consumer (B2C) online shopping. In the case where a business buys from another business, the process is called business-to-business (B2B) online shopping. The largest of these online retailing corporations are Alibaba, Amazon.com,and eBay.[1] Retail success is no longer all about physical stores. This is evident because of the increase in retailers now offering online store interfaces for consumers. With the growth of online shopping, comes a wealth of new market footprint coverage opportunities for stores that can appropriately cater to offshore market demands and service requirements.

Contents  [hide] 
1 History
2 International E-Commerce statistics
3 Customers
4 Logistics
5 Payment
6 Product delivery
7 Shopping cart systems
8 Design
8.1 Information load
8.2 Consumer needs and expectations
8.3 User interface
9 Market share
10 Advantages
10.1 Convenience
10.2 Information and reviews
10.3 Price and selection
11 Disadvantages
11.1 Fraud and security concerns
11.2 Lack of full cost disclosure
11.3 Privacy
12 Product suitability
13 Aggregation
14 Impact of reviews on consumer behaviour
15 See also
16 References
History[edit]


Michael Aldrich, pioneer of online shopping in the 1980s.
English entrepreneur Michael Aldrich invented online shopping in 1979. His system connected a modified domestic TV to a real-time transaction processing computer via a domestic telephone line. He believed that videotex, the modified domestic TV technology with a simple menu-driven human–computer interface, was a 'new, universally applicable, participative communication medium — the first since the invention of the telephone.' This enabled 'closed' corporate information systems to be opened to 'outside' correspondents not just for transaction processing but also for e-messaging and information retrieval and dissemination, later known as e-business.[2] His definition of the new mass communications medium as 'participative' [interactive, many-to-many] was fundamentally different from the traditional definitions of mass communication and mass media and a precursor to the social networking on the Internet 25 years later.

In March 1980 he went on to launch Redifon's Office Revolution, which allowed consumers, customers, agents, distributors, suppliers and service companies to be connected on-line to the corporate systems and allow business transactions to be completed electronically in real-time.[3]

During the 1980s[4] he designed, manufactured, sold, installed, maintained and supported many online shopping systems, using videotex technology.[5] These systems which also provided voice response and handprint processing pre-date the Internet and the World Wide Web, the IBM PC, and Microsoft MS-DOS, and were installed mainly in the UK by large corporations.

The first World Wide Web server and browser, created by Tim Berners-Lee in 1990, opened for commercial use in 1991.[6] Thereafter, subsequent technological innovations emerged in 1994: online banking, the opening of an online pizza shop by Pizza Hut,[6] Netscape's SSL v2 encryption standard for secure data transfer, and Intershop's first online shopping system. Immediately after, Amazon.com launched its online shopping site in 1995 and eBay was also introduced in 1995.[6]

International E-Commerce statistics[edit]
Statistics show that in 2012, Asia-Pacific increased their international sales over 30% giving them over $433 billion in revenue. That is a $69 billion difference between the U.S. revenue of $364.66 billion. It is estimated that Asia-Pacific will increase by another 30% in the year 2013 putting them ahead by more than one-third of all global ecommerce sales.

Customers[edit]
Online customers must have access to the Internet and a valid method of payment in order to complete a transaction.

Generally, higher levels of education and personal income correspond to more favorable perceptions of shopping online. Increased exposure to technology also increases the probability of developing favorable attitudes towards new shopping channels.[7]

In a December 2011 study, Equation Research surveyed 1,500 online shoppers and found that 87% of tablet owners made online transactions with their tablet devices during the early Christmas shopping season.[8]

Logistics[edit]
Consumers find a product of interest by visiting the website of the retailer directly or by searching among alternative vendors using a shopping search engine.

Once a particular product has been found on the website of the seller, most online retailers use shopping cart software to allow the consumer to accumulate multiple items and to adjust quantities, like filling a physical shopping cart or basket in a conventional store. A "checkout" process follows (continuing the physical-store analogy) in which payment and delivery information is collected, if necessary. Some stores allow consumers to sign up for a permanent online account so that some or all of this information only needs to be entered once. The consumer often receives an e-mail confirmation once the transaction is complete.

Less sophisticated stores may rely on consumers to phone or e-mail their orders (although full credit card numbers, expiry date, and Card Security Code,[9] or bank account and routing number should not be accepted by e-mail, for reasons of security).

Payment[edit]
Online shoppers commonly use a credit card or a PayPal account in order to make payments. However, some systems enable users to create accounts and pay by alternative means, such as:

Billing to mobile phones and landlines[10][11]
Cash on delivery (C.O.D.)
Cheque/ Check
Debit card
Direct debit in some countries
Electronic money of various types
Gift cards
Postal money order
Wire transfer/delivery on payment
Invoice, especially popular in some markets/countries, such as Switzerland
Bitcoin or other cryptocurrencies
Some online shops will not accept international credit cards. Some require both the purchaser's billing and shipping address to be in the same country as the online shop's base of operation. Other online shops allow customers from any country to send gifts anywhere.

The financial part of a transaction may be processed in real time (e.g. letting the consumer know their credit card was declined before they log off), or may be done later as part of the fulfillment process.

Product delivery[edit]
Once a payment has been accepted, the goods or services can be delivered in the following ways:

Downloading/Digital distribution:[12] The method often used for digital media products such as software, music, movies, or images.
Drop shipping: The order is passed to the manufacturer or third-party distributor, who then ships the item directly to the consumer, bypassing the retailer's physical location to save time, money, and space.
In-store pick-up: The customer selects a local store using a locator software and picks up the delivered product at the selected location. This is the method often used in the bricks and clicks business model.
Printing out, provision of a code for, or e-mailing of such items as admission tickets and scrip (e.g., gift certificates and coupons). The tickets, codes, or coupons may be redeemed at the appropriate physical or online premises and their content reviewed to verify their eligibility (e.g., assurances that the right of admission or use is redeemed at the correct time and place, for the correct dollar amount, and for the correct number of uses).
Shipping: The product is shipped to a customer-designated address.
Will call, lCOBO (in Care Of Box Office), or "at the door" pickup: The patron picks up pre-purchased tickets for an event, such as a play, sporting event, or concert, either just before the event or in advance. With the onset of the Internet and e-commerce sites, which allow customers to buy tickets online, the popularity of this service has increased.
Shopping cart systems[edit]
Simple systems allow the off-line administration of products and categories. The shop is then generated as HTML files and graphics that can be uploaded to a webspace. The systems do not use an online database.[citation needed]
A high-end solution can be bought or rented as a stand-alone program or as an addition to an enterprise resource planning program. It is usually installed on the company's webserver and may integrate into the existing supply chain so that ordering, payment, delivery, accounting and warehousing can be automated to a large extent.
Other solutions allow the user to register and create an online shop on a portal that hosts multiple shops simultaneously from one back office.
Open source shopping cart packages include advanced platforms such as Interchange, and off-the-shelf solutions such as Magento, nopCommerce, osCommerce, Shopgate, PrestaShop, Shopify, Zen Cart, OpenCart.
Commercial systems can also be tailored so the shop does not have to be created from scratch. By using an existing framework, software modules for various functionalities required by a web shop can be adapted and combined.[citation needed]
Design[edit]
Customers are attracted to online shopping not only because of high levels of convenience, but also because of broader selections, competitive pricing, and greater access to information.[13][14] Business organizations seek to offer online shopping not only because it is of much lower cost compared to bricks and mortar stores, but also because it offers access to a world wide market, increases customer value, and builds sustainable capabilities.[clarification needed][15]

Information load[edit]
Designers of online shops are concerned with the effects of information load. Information load is a product of the spatial and temporal arrangements of stimuli in the webstore.[16] Compared with conventional retail shopping, the information environment of virtual shopping is enhanced by providing additional product information such as comparative products and services, as well as various alternatives and attributes of each alternative, etc.[17]

Two major dimensions of information load are complexity and novelty.[18] Complexity refers to the number of different elements or features of a site, often the result of increased information diversity. Novelty involves the unexpected, suppressed, new, or unfamiliar aspects of the site. The novelty dimension may keep consumers exploring a shopping site, whereas the complexity dimension may induce impulse purchases.[17]

Consumer needs and expectations[edit]

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A successful webstore is not just a good looking website with dynamic technical features, listed in many search engines.[19] In addition to disseminating information, it is also about building a relationship with customers and making money.

Businesses often attempt to adopt online shopping techniques without understanding them and/or without a sound business model; often, businesses produce webstores that support the organizations' culture and brand name without satisfying consumer expectations. User-centered design is critical. Understanding the customer's wants and needs is essential. Living up to the company's promises gives customers a reason to come back and meeting their expectations gives them a reason to stay. It is important that the website communicates how much the company values its customers.[19]

Customer needs and expectations are not the same for all customers. Age, gender, experience and culture are all important factors. For example, Japanese cultural norms may lead users there to feel privacy is especially critical on shopping sites and emotional involvement is highly important on financial pensions sites.[15] Users with more online experience focus more on the variables that directly influence the task, while novice users focus on understanding the information.[20]

To increase online purchases, businesses must use significant time and money to define, design, develop, test, implement, and maintain the webstore.[19] Truly said, it is easier to lose a customer than to gain one. Even a "top-rated" website will not succeed if the organization fails to practice common etiquette such as responding to e-mails in a timely fashion, notifying customers of problems, being honest, and being good stewards of the customers' data.[19] Because it is so important to eliminate mistakes and be more appealing to online shoppers, many webshop designers study research on consumer expectations.[21]

User interface[edit]


An automated online assistant, with potential to enhance user interface on shopping sites.
The most important factors determining whether customers return to a website are ease of use and the presence of user-friendly features.[22] Usability testing is important for finding problems and improvements in a web site. Methods for evaluating usability include heuristic evaluation, cognitive walkthrough, and user testing. Each technique has its own characteristics and emphasizes different aspects of the user experience.[22]

Market share[edit]
E-commerce B2C product sales totaled $142.5 billion,[8] representing about 8% of retail product sales in the United States.[23] The $26 billion worth of clothes sold online represented about 13% of the domestic market,[24] and with 72% of women looking online for apparel, it has become one of the most popular cross-shopping categories.[25] Forrester Research estimates that the United States online retail industry will be worth $279 billion in 2015.[26] There were 242 million people shopping on-line in China in 2012.[27]

For developing countries and low-income households in developed countries, adoption of e-commerce in place of or in addition to conventional methods is limited by a lack of affordable Internet access.

Advantages[edit]
Convenience[edit]
Online stores are usually available 24 hours a day, and many consumers have Internet access both at work and at home. Other establishments such as internet cafes and schools provide internet access as well. In contrast, visiting a conventional retail store requires travel and must take place during business hours.

In the event of a problem with the item (e.g., the product was not what the consumer ordered, the product was not satisfactory), consumers are concerned with the ease of returning an item in exchange for either the correct product or a refund. Consumers may need to contact the retailer, visit the post office and pay return shipping, and then wait for a replacement or refund. Some online companies have more generous return policies to compensate for the traditional advantage of physical stores. For example, the online shoe retailer Zappos.com includes labels for free return shipping, and does not charge a restocking fee, even for returns which are not the result of merchant error. (Note: In the United Kingdom, online shops are prohibited from charging a restocking fee if the consumer cancels their order in accordance with the Consumer Protection (Distance Selling) Act 2000).[28]

Information and reviews[edit]
Online stores must describe products for sale with text, photos, and multimedia files, whereas in a physical retail store, the actual product and the manufacturer's packaging will be available for direct inspection (which might involve a test drive, fitting, or other experimentation).

Some online stores provide or link to supplemental product information, such as instructions, safety procedures, demonstrations, or manufacturer specifications. Some provide background information, advice, or how-to guides designed to help consumers decide which product to buy.

Some stores even allow customers to comment or rate their items. There are also dedicated review sites that host user reviews for different products. Reviews and even some blogs give customers the option of shopping for cheaper purchases from all over the world without having to depend on local retailers.

In a conventional retail store, clerks are generally available to answer questions. Some online stores have real-time chat features, but most rely on e-mails or phone calls to handle customer questions.

Price and selection[edit]
One advantage of shopping online is being able to quickly seek out deals for items or services provided by many different vendors (though some local search engines do exist to help consumers locate products for sale in nearby stores). Search engines, online price comparison services and discovery shopping engines can be used to look up sellers of a particular product or service.

Shipping costs (if applicable) reduce the price advantage of online merchandise, though depending on the jurisdiction, a lack of sales tax may compensate for this.

Shipping a small number of items, especially from another country, is much more expensive than making the larger shipments bricks-and-mortar retailers order. Some retailers (especially those selling small, high-value items like electronics) offer free shipping on sufficiently large orders.

Another major advantage for retailers is the ability to rapidly switch suppliers and vendors without disrupting users' shopping experience.

Disadvantages[edit]
Fraud and security concerns[edit]
Given the lack of ability to inspect merchandise before purchase, consumers are at higher risk of fraud than face-to-face transactions. Merchants also risk fraudulent purchases using stolen credit cards or fraudulent repudiation of the online purchase. However, merchants face less risk from physical theft by using a warehouse instead of a retail storefront.

Secure Sockets Layer (SSL) encryption has generally solved the problem of credit card numbers being intercepted in transit between the consumer and the merchant. However, one must still trust the merchant (and employees) not to use the credit card information subsequently for their own purchases, and not to pass the information to others. Also, hackers might break into a merchant's web site and steal names, addresses and credit card numbers, although the Payment Card Industry Data Security Standard is intended to minimize the impact of such breaches. Identity theft is still a concern for consumers. A number of high-profile break-ins in the 2000s has prompted some U.S. states to require disclosure to consumers when this happens. Computer security has thus become a major concern for merchants and e-commerce service providers, who deploy countermeasures such as firewalls and anti-virus software to protect their networks.

Phishing is another danger, where consumers are fooled into thinking they are dealing with a reputable retailer, when they have actually been manipulated into feeding private information to a system operated by a malicious party. Denial of service attacks are a minor risk for merchants, as are server and network outages.

Quality seals can be placed on the Shop web page if it has undergone an independent assessment and meets all requirements of the company issuing the seal. The purpose of these seals is to increase the confidence of online shoppers. However, the existence of many different seals, or seals unfamiliar to consumers, may foil this effort to a certain extent. A number of resources offer advice on how consumers can protect themselves when using online retailer services. These include:

Sticking with known stores, or attempting to find independent consumer reviews of their experiences; also ensuring that there is comprehensive contact information on the website before using the service, and noting if the retailer has enrolled in industry oversight programs such as a trust mark or a trust seal.
Before buying from a new company, evaluate the website by considering issues such as: the professionalism and user-friendliness of the site; whether or not the company lists a telephone number and/or street address along with e-contact information; whether a fair and reasonable refund and return policy is clearly stated; and whether there are hidden price inflators, such as excessive shipping and handling charges.
Ensuring that the retailer has an acceptable privacy policy posted. For example note if the retailer does not explicitly state that it will not share private information with others without consent.
Ensuring that the vendor address is protected with SSL (see above) when entering credit card information. If it does the address on the credit card information entry screen will start with "HTTPS".
Using strong passwords, without personal information. Another option is a "pass phrase," which might be something along the lines: "I shop 4 good a buy!!" These are difficult to hack, and provides a variety of upper, lower, and special characters and could be site specific and easy to remember.
Although the benefits of online shopping are considerable, when the process goes poorly it can create a thorny situation. A few problems that shoppers potentially face include identity theft, faulty products, and the accumulation of spyware. If users are required to put in their credit card information and billing/shipping address and the website is not secure, customer information can be accessible to anyone who knows how to obtain it. Most large online corporations are inventing new ways to make fraud more difficult. However, criminals are constantly responding to these developments with new ways to manipulate the system. Even though online retailers are making efforts to protect consumer information, it is a constant fight to maintain the lead. It is advisable to be aware of the most current technology and scams protect consumer identity and finances.

Product delivery is also a main concern of online shopping. Most companies offer shipping insurance in case the product is lost or damaged. Some shipping companies will offer refunds or compensation for the damage, but this is up to their discretion.

Lack of full cost disclosure[edit]
The lack of full cost disclosure may also be problematic. While it may be easy to compare the base price of an item online, it may not be easy to see the total cost up front. Additional fees such as shipping are often not be visible until the final step in the checkout process. The problem is especially evident with cross-border purchases, where the cost indicated at the final checkout screen may not include additional fees that must be paid upon delivery such as duties and brokerage. Some services such as the Canadian based Wishabi attempts to include estimates of these additional cost,[29] but nevertheless, the lack of general full cost disclosure remains a concern.

Privacy[edit]
Privacy of personal information is a significant issue for some consumers. Many consumers wish to avoid spam and telemarketing which could result from supplying contact information to an online merchant. In response, many merchants promise to not use consumer information for these purposes,

Many websites keep track of consumer shopping habits in order to suggest items and other websites to view. Brick-and-mortar stores also collect consumer information. Some ask for a shopper's address and phone number at checkout, though consumers may refuse to provide it. Many larger stores use the address information encoded on consumers' credit cards (often without their knowledge) to add them to a catalog mailing list. This information is obviously not accessible to the merchant when paying in cash or through a bank (money transfer, in which case there is also proof of payment).

Product suitability[edit]

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Many successful purely virtual companies deal with digital products, (including information storage, retrieval, and modification), music, movies, office supplies, education, communication, software, photography, and financial transactions. Other successful marketers use drop shipping or affiliate marketing techniques to facilitate transactions of tangible goods without maintaining real inventory.

Some non-digital products have been more successful than others for online stores. Profitable items often have a high value-to-weight ratio, they may involve embarrassing purchases, they may typically go to people in remote locations, and they may have shut-ins as their typical purchasers. Items which can fit in a standard mailbox—such as music CDs, DVDs and books—are particularly suitable for a virtual marketer.

Products such as spare parts, both for consumer items like washing machines and for industrial equipment like centrifugal pumps, also seem good candidates for selling online. Retailers often need to order spare parts specially, since they typically do not stock them at consumer outlets—in such cases, e-commerce solutions in spares do not compete with retail stores, only with other ordering systems. A factor for success in this niche can consist of providing customers with exact, reliable information about which part number their particular version of a product needs, for example by providing parts lists keyed by serial number.

Products less suitable for e-commerce include products that have a low value-to-weight ratio, products that have a smell, taste, or touch component, products that need trial fittings—most notably clothing—and products where colour integrity appears important. Nonetheless, some web sites have had success delivering groceries and clothing sold through the internet is big business in the U.S.

Aggregation[edit]
High-volume websites, such as Yahoo!, Amazon.com,and eBay, offer hosting services for online stores to all size retailers. These stores are presented within an integrated navigation framework, sometimes known as virtual shopping malls or online marketplaces.

Impact of reviews on consumer behaviour[edit]
One of the great benefits of online shopping is the ability to read product reviews, written either by experts or fellow online shoppers.

The Nielsen Company conducted a survey in March 2010 and polled more than 27,000 Internet users in 55 markets from the Asia-Pacific, Europe, Middle East, North America, and South America to look at questions such as "How do consumers shop online?", "What do they intend to buy?", "How do they use various online shopping web pages?", and the impact of social media and other factors that come into play when consumers are trying to decide how to spend their money on which product or service. According to the research,[30] reviews on electronics (57%) such as DVD players, cellphones, or PlayStations, and so on, reviews on cars (45%), and reviews on software (37%) play an important role in influencing consumers who tend to make purchases online. Furthermore, 40% of online shoppers indicate that they would not even buy electronics without consulting online reviews first.

In addition to online reviews, peer recommendations on online shopping pages or social media websites play a key role[31] for online shoppers when they are researching future purchases.[32] 90% of all purchases made are influenced by social media.[33] Each day, over two million buyers are shopping online for jewelry.[34]

See also[edit]
Bricks and clicks business model
Dark store
Direct imports
Digital distribution
Electronic business
List of free and open source eCommerce software
Online auction business model
Online stores: Webstore, Online music store, Online pharmacy, Online shopping malls
Online shopping rewards
Open catalogue
Personal shopper
Retail therapy
Types of retail outlets