BOOK : NO : 2

BBA-20: E-commerce
Unit l:
Introduction, Information Technology and business, various applications of Information
Technology in the field of business.
Unit 2:
Meaning, classification, B2B, B2C, C2C, G2C, B2G sites, E-commerce in the field of
education, finance, auction, news and entertainment sectors, Setting of an E-commerce case
study portals and some popular E-commerce portals.
Unit 3:
Electronic Commerce, Frame work, anatomy of E-Commerce applications, E-Commerce
Consumer applications, E-Commerce organization applications
Unit 4:
Credit cards, debit cards, smart cards, e-credit accounts, e-money, security concerns in E-
commerce, authenticity, privacy, integrity, non-repudiation, encryption, secret key cryptography,
public key cryptography, SET, SSL, digital signatures, firewalls
Unit 5:
Marketing strategies, creating web presence, advertising, customer service and support, web
branding strategies, web selling models
Unit 6:
Digitization of documents, Document library, Types of digital documents, warehouses
Unit 7:
M-commerce, Introduction, meaning, applications and importance of M-
commerce in the present world of business
Unit 8:
Key multimedia concepts, Digital Video and electronic Commerce, Desktop video
processing, Desktop video conferencing
 UNIT 1
E- Commerce

Content
1.1. Introduction
1.2. Information Technology and business & various applications of Information Technology
in the field of business.
1.3. Summary
1.4. Glossary
1.5. Check Your Progress
1.6. Reference
1.7. Answer to Check your Progress

1.1. INTRODUCTION

Electronic commerce, commonly known as e-commerce or eCommerce, consists of the

buying and selling of products or services over electronic systems such as the Internet and
other computer networks. The amount of trade conducted electronically has grown
extraordinarily with widespread Internet usage. The use of commerce is conducted in this way,
spurring and drawing on innovations in electronic funds transfer, supply chain
management, Internet marketing, online transaction processing, electronic data
interchange (EDI), inventory management systems, and automated data collection systems.
Modern electronic commerce typically uses the World Wide Web at least at some point in the
transaction's lifecycle, although it can encompass a wider range of technologies such as e-mail,
mobile devices and telephones as well.

A large percentage of electronic commerce is

conducted entirely electronically for virtual items such as
access to premium content on a website, but most
electronic commerce involves the transportation of
physical items in some way. Online retailers are
sometimes known as e-tailers and online retail is
sometimes known as e-tail. Almost all big retailers have
electronic commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-

business or B2B. B2B can be open to all interested parties (e.g.commodity exchange) or limited
to specific, pre-qualified participants (private electronic market). Electronic commerce that is
conducted between businesses and consumers, on the other hand, is referred to as business-to-
consumer or B2C. This is the type of electronic commerce conducted by companies such
asAmazon.com. Online shopping is a form of electronic commerce where the buyer is directly
online to the seller's computer usually via the internet. There is no intermediary service. The sale
and purchase transaction is completed electronically and interactively in real-time such as
Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction
is called electronic commerce such as eBay.com.
Electronic commerce is generally considered to be the sales aspect of e-business. It also
consists of the exchange of data to facilitate the financing and payment aspects of the business
transactions.

EARLY DEVELOPMENT
Originally, electronic commerce was identified as the facilitation of commercial
transactions electronically, using technology such as Electronic Data Interchange
(EDI) and Electronic Funds Transfer (EFT). These were both introduced in the late 1970s,
allowing businesses to send commercial documents like purchase orders or invoices
electronically. The growth and acceptance of credit cards, automated teller machines (ATM) and
telephone banking in the 1980s were also forms of electronic commerce. Another form of e-
commerce was the airline reservation system typified by Sabre in the USA and Travicom in the
UK.
From the 1990s onwards, electronic commerce would additionally include enterprise
resource planning systems (ERP), data mining and data warehousing.
In 1990, Tim Berners-Lee invented the WorldWideWeb web browser and transformed an
academic telecommunication network into a worldwide everyman everyday communication
system called internet/www. Commercial enterprise on the Internet was strictly prohibited by
NSF until 1995.[1] Although the Internet became popular worldwide around 1994 with the
adoption of Mosaic web browser, it took about five years to introduce security protocols
and DSL allowing continual connection to the Internet. By the end of 2000, many European and
American business companies offered their services through the World Wide Web. Since then
people began to associate a word "ecommerce" with the ability of purchasing various goods
through the Internet using secure protocols and electronic payment services.

1.2. Information Technology and business

Some common applications in Business Application related to electronic commerce are the
following:

Document automation in supply chain and logistics

Domestic and international payment systems

Enterprise content management

Group buying

Automated online assistants

Instant messaging

Newsgroups

Online shopping and order tracking

Online banking

Online office suites

Shopping cart software

Teleconferencing

Electronic tickets
Document automation in supply chain and logistics
There are many documents used in logistics. They are called; invoices, packing lists/slips/sheets
(manifests), pick tickets, forms/reports of many types (eg. MSDS, damaged goods, returned
goods, detailed/summary, etc.), import/export, delivery, bill of lading (BOL), etc. These
documents are usually the contracts between the consignee and the consignor, so they are very
important for both parties and any intermediary, like a third party logistics company (3PL)
and governments.
Document handling within logistics, supply chain management and distribution centers is usually
performed manual labor or semiautomatically using bar code scanners, software and
tabletop laser printers. There are some manufacturers of high speed document automation
systems that will automatically compare the laser printed document to the order and either insert
or automatically apply an enclosed wallet/pouch to the shipping container (usually a
flexible polybag or corrugated fiberboard/rigid container). See below for external website video
links showing these document automation systems. Protection of Privacy and Identity Theft are
major concerns, especially with the increase of e-Commerce, Internet/Online
shopping and Shopping channel (other, past references are catalogue shopping and mail
order shopping) making it more important than ever to guarantee the correct document is married
or associated to the correct order or shipment every time. Software that produce documents
are; ERP, WMS, TMS, legacy middleware and most accounting packages

Domestic and international payment systems

A payment system is a system for the transfer of money. What makes it a "system" is that it
employs cash-substitutes; traditional payment systems are negotiable instruments such
as drafts (e.g.,checks), credit cards and other charge cards, documentary credit (such as L/C) and
electronic funds transfers. Some payment systems include credit mechanisms, but that is
essentially a different aspect of payment. Payment systems are used in lieu of tendering cash in
domestic and international transactions and consist of a major service provided by banks and
other financial institutions. In the US, they are regulated by different state statutes (UCC)
and Federal regulations.

Additional forms of payment systems (including physical or

electronic infrastructure and associated procedures and protocols)
are used to settle financial transactions in automated teller
machinenetworks, stored-value card networks, bond
markets, currency markets, and futures, derivatives,
or options markets, or to transfer funds between financial
institutions. Due to the backing of modern fiat
currencies with government bonds, payment systems are a core
part of modern monetary systems.

The term electronic payment can refer narrowly to e-commerce - a payment for buying and
selling goods or services offered through the Internet, or broadly to any type of electronic funds
transfer.

Enterprise content management (ECM)

Content management includes ECM, Web content management (WCM), content syndication,
and media asset management. Enterprise content management is not a closed-system solution or
a distinct product category. Therefore, along with Document Related Technologies or Document
Lifecycle Management, ECM is just one possible catch-all term for a wide range of technologies
and vendors.

The content and structure of today's outward-directed web

portal will be the platform for tomorrow's internal
information system. In his article
in ComputerWoche,[3] Ulrich Kampffmeyer distilled ECM to
three key ideas that distinguish such solutions from Web
content management:

Enterprise content management as integrative

middleware
ECM is used to overcome the restrictions of
former vertical applications and island
architectures. The user is basically unaware of using an ECM solution. ECM
offers the requisite infrastructure for the new world of web-based IT, which is
establishing itself as a kind of third platform alongside conventional host and
client/server systems. Therefore, EAI (enterprise application integration) and
SOA (service-oriented architecture) will play an important role in the
implementation and use of ECM.

Enterprise content management components as independent services

ECM is used to manage information without regard to the source or the required
use. The functionality is provided as a service that can be used from all kinds of
applications. The advantage of a service concept is that for any given
functionality only one general service is available, thus avoiding redundant,
expensive and difficult to maintain parallel functions. Therefore, standards for
interfaces connecting different services will play an important role in the
implementation of ECM.

Enterprise content management as a uniform repository for all types of information

ECM is used as a content warehouse (both data warehouse and document
warehouse) that combines company information in a repository with a uniform
structure. Expensive redundancies and associated problems with information
consistency are eliminated. All applications deliver their content to a single
repository, which in turn provides needed information to all applications.
Therefore, content integration and ILM (Information Lifecycle Management) will
play an important role in the implementation and use of ECM.
Enterprise content management is working properly when it is effectively "invisible" to users.
ECM technologies are infrastructures that support specialized applications as subordinate
services. ECM thus is a collection of infrastructure components that fit into a multi-layer model
and include all document related technologies (DRT) for handling, delivering, and managing
structured data and unstructured information jointly. As such, enterprise content management is
one of the necessary basic components of the overarching e-business application area. ECM also
sets out to manage all the information of a WCM and covers archiving needs as a universal
repository
Group Buying
Group buying, also known as collective buying, offers products and services at significantly
reduced prices on the condition that a minimum number of buyers would make the purchase.
Origins of Group buying can be traced to China, where Tuángòu or team buying was executed to
get discount prices from retailer when a large group of people were willing to buy the same item.
In recent time, Group buying websites have emerged as a major player in online shopping
business. Typically, these websites feature a deal of the day, with the deal kicking in once a set
number of people agree to buy the product or service. Buyers then print off a voucher to claim
their discount at the retailer. Many of the group-buying sites work by negotiating deals with local
merchants and promising to deliver crowds in exchange for discount

History of online group buying: In 2000, with

financial backing from Microsoft co-founder Paul
Allen, an e-commerce start-up called Mercata hit the
market with a business plan it dubbed "We Commerce."
The website offered high end electronic deals deals to
shoppers online.Individual Web shoppers would sign
up en-masse to buy the same product, and the price of
the product would fall as more people signed up to buy
it.However, the website was shutdown in 2001 as it
could not compete with websites like amazon.com.

Recently, group buying has been taken online in numerous forms, although group buys
prior to 2009 usually referred to the grouping of industrial products for wholesale
market(especially in China). Modern Day online Group buys are a variation of the tuangou
buying that occurs in China. Under tuangou, an item must be bought in a minimum quantity
or dollar amount, otherwise the seller will not allow the purchase. Since individuals typically do
not need multiples of one item or do not have the resources to buy in bulk, group buys allow
people to invite others to purchase in bulk jointly. These group buys often result in better prices
for the individual buyers or ensure that a scarce or obscure item is available for sale. Group buys
were, in the past, often organized by like-minded online shoppers through Internet forums.
Now,these shoppers have also started to leverage the group buying model for purposes of buying
other consumer durables. Group buying sites are back in demand as small businesses look for
ways to promote their products to budget-conscious consumers in a weak global economy

Automated online assistants

An automated online assistant is a program that uses artificial intelligence to provide customer
service or other assistance on a website. Such an assistant may basically consist of a dialog
system, an avatar, as well an expert system to provide specific expertise to the user.
Automated online assistants have the ability to
provide customer service during 24 hours a
day and 7 days a week, and may, at least, be a
complement to customer service by humans.
Dialog System: The main function of the dialog system of automated online assistants is to
translate the human-generated input into a digital format that the automated online assistant can
use for further processing by its expert system, as well as interpret whatever solutions or replies
it generates back to what a human user understands, and optimally in a way as natural and user-
friendly as possible. A major underlying technology to such systems is natural language
processing.

In addition, the dialog systems of many automated online assistants have integrated chatterbots,
giving them more or less ability of engaging in small talk or casual conversations unrelated to the
scope of their expert systems, or simply making the dialog feel more natural.

Avatar: The avatar of an automated online assistant may be called an interactive online
character or automated character. It makes the automated online assistant a form of embodied
agent. It aims to enhance human-computer interaction by simulating real-world conversations
and experience. Such an interaction model can be constructed to guide conversations in planned
directions or allow characters to guide natural language exchanges.

Because such characters can express social roles and emotions of real people, they can increase
the trust that users place in online experiences. The level of instructiveness increases the
perceived realism and effectiveness of such “actors”, which translates into more prosperous on-
line services and commerce

Instant Messaging
Instant messaging (IM) is a form of real-time direct text-based communication between two or
more people using personal computers or other devices, along with shared clients. The
user's text is conveyed over a network, such as the Internet. More advanced instant messaging
software clients also allow enhanced modes of communication, such as live voice or video
calling.

Instant messaging (IM) is a collection of

technologies used for real-time text-based communication
between two or more participants over the Internet, or
other types of networks. Of importance is that online
chat and instant messaging differs from other technologies
such as e-mail due to the perceived synchronicity of the
communications by the users –chat happens in real-time.
Some systems permit messages to be sent to people not
currently 'logged on' (offline messages), thus removing
some of the differences between IM and e-mail (often done
by sending the message to the associated e-mail account).

IM allows effective and efficient communication,

allowing immediate receipt of acknowledgment or reply. In
many cases instant messaging includes additional features
which can make it even more popular. For example, users can see each other by using webcams,
or talk directly for free over the Internet using a microphone and headphones or loudspeakers.
Many client programs allow file transfers as well, although they are typically limited in the
permissible file-size.

It is typically possible to save a text conversation for later reference. Instant messages are
often logged in a local message history, making it similar to the persistent nature of e-mails

News Group
A usenet newsgroup is a repository usually within the Usenet system, for messages posted from
many users in different locations. The term may be confusing to some, because it is usually
discussion. Newsgroups are technically distinct from, but functionally similar to, discussion
forums on the World Wide Web. Newsreader software is used to read newsgroups.
Despite the advent of file-sharing technologies such as Bit Torrent, as well as the increased use
of blogs, formal discussion forums, and social networking sites, coupled with a growing number
of service providers blocking access to Usenet (see main article), newsgroups continue to be
widely used

Typically, the newsgroup is focused on a particular topic of

interest. Some newsgroups allow the posting of messages on
a wide variety of themes, regarding anything a member
chooses to discuss ason-topic, while others keep more
strictly to their particular subject, frowning on off-
topic postings. The news admin (the administrator of a news
server) decides how long articles are kept on his server
before being expired (deleted). Different servers will have
different retention times for the same newsgroup; some may
keep articles for as little as one or two weeks, others may
hold them for many months. Some admins keep articles in local or technical newsgroups around
longer than articles in other newsgroups.
Newsgroups generally come in either of two types, binary or text. There is no technical
difference between the two, but the naming differentiation allows users and servers with limited
facilities to minimize network bandwidth usage. Generally, Usenet conventions and rules are
enacted with the primary intention of minimizing the overall amount of network traffic and
resource usage.
Newsgroups are much like the public message boards on old bulletin board systems. For
those readers not familiar with this concept, envision an electronic version of the corkboard in
the entrance of your local grocery store.
Newsgroups frequently become cliquish and are subject to sporadic flame
wars and trolling, but they can also be a valuable source of information, support and friendship,
bringing people who are interested in specific subjects together from around the world.
Back when the early community was the pioneering computer society, the common habit
seen with many articles was a notice at the end disclosed if the author was free of, or had a
conflict of interest, or had any financial motive, or axe to grind, in posting about any product or
issue. This is seen much less now, and the reader must read skeptically, just like in society,
besides all the privacy or phishing issues.
 There are currently well over 100,000 Usenet newsgroups, but only 20,000 or so of those
are active. Newsgroups vary in popularity, with some newsgroups only getting a few posts a
month while others get several hundred (and in a few cases a couple of thousand) messages a
day.
Weblogs have replaced some of the uses of newsgroups (especially because, for a while,
they were less prone to spamming).

A website called Deja News began archiving Usenet in the mid-1990s. DejaNews also
provided a searchable web interface. Google bought the archive from them and made efforts to
buy other Usenet archives to attempt to create a complete archive of Usenet newsgroups and
postings from its early beginnings. Like DejaNews, Google has a web search interface to the
archive, but Google also allows newsgroup posting.

Online shopping and order tracking

Online shopping is the process whereby consumers directly buy goods or services from a seller
in real-time, without an intermediary service, over the Internet. It is a form of electronic
commerce. An online shop, e shop, e-store, internet shop, web shop, web store, online store, or
virtual store evokes the physical analogy of buying products or services at a bricks-and-
mortar retailer or in a shopping mall. The process is called Business-to-Consumer (B2C) online
shopping. When a business buys from another business it is called Business-to-Business (B2B)
online shopping.
In recent years, online shopping has become
popular; however, it still caters to the middle and
upper class. In order to shop online, one must be able
to have access to a computer, a bank account and
a debit card. Shopping has evolved with the growth
of technology. According to research found in the
Journal of Electronic Commerce, if one focuses on
the demographic characteristics of the in-home
shopper, in general, the higher the level of education,
income, and occupation of the head of the household,
the more favorable the perception of non-store
shopping., Enrique.(2005) The Impact of Internet User Shopping Patterns and Demographics on
Consumer Mobile Buying Behavior. Journal of Electronic Commerce Research, An influential
factor in consumer attitude towards non-store shopping is exposure to technology, since it has
been demonstrated that increased exposure to technology increases the probability of developing
favorable attitudes towards new shopping channels.
Online shopping widened the target audience to men and women of the middle class. At
first, the main users of online shopping were young men with a high level of income and a
university education. This profile is changing. For example, in USA in the early years of Internet
there were very few women users, but by 2001 women were 52.8% of the online population.

Payments: Online shoppers commonly use credit card to make payments, however some
systems enable users to create accounts and pay by alternative means, such as:

Billing to mobile phones and landlines

Cash on delivery (C.O.D., offered by very few online stores)

Check

Debit card

Direct debit in some countries

Electronic money of various types

Gift cards

Postal money order

Wire transfer/delivery on payment
Some sites will not accept international credit cards, some require both the purchaser's billing
address and shipping address to be in the same country in which site does its business, and still
other sites allow customers from anywhere to send gifts anywhere. The financial part of a
transaction might be processed in real time (for example, letting the consumer know their credit
card was declined before they log off), or might be done later as part of the fulfillment process.

Online Banking
Online banking (or Internet banking) allows customers to conduct financial transactions on a
secure website operated by their retail or virtual bank, credit unionor building society
Features of Online Banking
Online banking solutions have many features and capabilities in common, but
traditionally also have some that are application specific.

The common features fall broadly into several

categories

Transactional (e.g., performing a financial transaction
such as an account to account transfer, paying a bill,
wire transfer, apply for a loan, new account, etc.)

Payments to third parties, including bill
payments and telegraphic/wire transfers

Funds transfers between a customer's
own transactional account and savings accounts

Investment purchase or sale

Loan applications and transactions, such as repayments of enrollments

Non-transactional (e.g., online statements, cheque links, co browsing, chat)

Viewing recent transactions

Downloading bank statements, for example in PDF format

Viewing images of paid cheques

Financial Institution Administration

Management of multiple users having varying levels of authority

Transaction approval process

Features commonly unique to Internet banking include

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.
Security: Protection through single password authentication, as is the case in most secure
Internet shopping sites, is not considered secure enough for personal online banking applications
in some countries. Basically there exist two different security methods 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. The most secure 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 (this is called two-factor authentication or 2FA). Usually online banking
with PIN/TAN is done via a web browser using SSL secured connections, so that there is no
additional encryption needed.

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 and Austria, many banks have adapted this "SMS TAN" service as it is considered as
very secure.

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
Most of the 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 key logger/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 recent FDIC 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.

The most recent 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.
Countermeasures

There exist several countermeasures which try to avoid attacks. Digital certificates are used
against phishing and pharming, the use of class-3 card readers is a measure to avoid
manipulation of transactions by the software in signature based online banking variants. 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 FFIEC issued guidance for multifactor authentication (MFA) and then required to be
in place by the end of 2006

Online Office Suite

An online office suite or online productivity suite is a type of office suite offered by websites
in the form of software as a service. They can be accessed online from
any Internet-enabled device running any operating system. This allows people
to work together worldwide and at any time, thereby leading to international
web-based collaboration and virtual teamwork. Usually, the basic versions are
offered for free and for more advanced versions one is required to pay a
nominal subscription fee.

Applications are often developed on the Web 2.0 paradigms with leverage on
the existing developer community. Players come from both the commercial software market and
from the open source, free software communities

Shopping Cart Software’s

Shopping cart software is software used in e-commerce to assist people making purchases
online, analogous to the American English term 'shopping cart'. In British English it is generally
known as a shopping basket, almost exclusively shortened on websites to 'basket'.
The software allows online shopping customers to accumulate
a list of items for purchase, described metaphorically as
"placing items in the shopping cart". Upon checkout, the
software typically calculates a total for the order, including
shipping and handling (i.e. postage and packing) charges and
the associated taxes, as applicable.

Teleconference

A teleconference or teleseminar is the live exchange

and mass articulation of information among several
persons and machines remote from one another but
linked by a telecommunications system. Terms such as
audio conferencing, telephone conferencing and phone
conferencing are also sometimes used to refer to
teleconferencing.
The telecommunications system may support the
teleconference by providing one or more of the
following: audio, video, and/or data services by one or
more means, such as telephone, computer, telegraph, teletype, radio, and television
 Electronic Tickets
An electronic ticket (commonly abbreviated as e-ticket) is a digital ticket issued by an airline.
This form of airline ticket rapidly replaced the older multi-layered paper tickets (from close to
zero to 100% in about 10 years) and became mandatory for IATA members as from June 1,
2008. During the last few years, where paper tickets were still available, airlines frequently
charged extra for issuing them. E-tickets are also available for some entertainment venues.
While e-tickets may at first glance look like a basic itinerary, they contain a number of other
features that distingish them.

E-tickets, like their paper counterparts, will contain an official ticket number (including the
airline's 3 digit code.

Carriage terms and conditions, (or at least a reference to them)

Fare and tax details. Exact cost might not be stated, but will often be replaced by a "fare
basis" code.

Fare restrictions.

Form of payment.

Issuing office.

Baggage allowance.

Once a reservation is made, an e-ticket exists only as a digital

record in the airline computers. Customers usually print out a copy
of their receipt which contains the record locator or reservation
number and the e-ticket number.

According to critical acclaim, Joel R. Goheen is recognized as the

Inventor of Electronic Ticketing in the Airline Industry, an industry where global electronic
ticket sales (the industry standard) accounts for over US$400 billion a year (2007). See Patents
for Electronic Ticketing Inventions in the Airline Industry.

Electronic tickets have been introduced in road, urban or rail public transport as well.

E COMMERCE SUMMARY

Electronic commerce, commonly known as e-commerce, eCommerce or e-comm, consists of

the buying and selling of products or services over electronic systems such as the Internet and
other computer networks.It is More than just buying and selling products online.It also includes
the entire online process of Developing, marketing, selling, delivering, servicing and paying for
products and services.The amount of trade conducted electronically has grown extraordinarily
with widespread Internet usage. The use of commerce is conducted in this way, spurring and
drawing on innovations in electronic funds transfer, supply chain management, Internet
marketing, online transaction processing, electronic data interchange (EDI), inventory
management systems, and automated data collection systems. Modern electronic commerce
typically uses the World Wide Web at least at some point in the transaction's lifecycle, although
it can encompass a wider range of technologies such as e-mail, mobile devices and telephones as
well.
A large percentage of electronic commerce is conducted entirely electronically for virtual items
such as access to premium content on a website, but most electronic commerce involves the
transportation of physical items in some way. Online retailers are sometimes known as e-
tailers and online retail is sometimes known as e-tail. Almost all big retailers have electronic
commerce presence on the World Wide Web.

Electronic commerce that is conducted between businesses is referred to as business-to-

business or B2B. B2B can be open to all interested parties (e.g. commodity) or limited to
specific, pre-qualified participants (private electronic market). Electronic commerce that is
conducted between businesses and consumers, on the other hand, is referred to as business-to-
consumer or B2C. This is the type of electronic commerce conducted by companies such as
Amazon.com. Online shopping is a form of electronic commerce where the buyer is directly
online to the seller's computer usually via the internet. There is no intermediary service. The sale
and purchase transaction is completed electronically and interactively in real-time such as
Amazon.com for new books. If an intermediary is present, then the sale and purchase transaction
is called electronic commerce such as eBay.com.

Electronic commerce is generally considered to be the sales aspect of e-business. It also consists
of the exchange of data to facilitate the financing and payment aspects of the business
transactions.

1.3. GLOSSARY
Electronic commerce or ecommerce is a term for any type of business, or commercial transaction
that involves the transfer of information across the
Internet. It covers a range of different types of businesses,
from consumer based retail sites, through auction or music
sites, to business exchanges trading goods and services
between corporations. It is currently one of the most
important aspects of the Internet to emerge.
Ecommerce allows consumers to electronically exchange
goods and services with no barriers of time or distance.
Electronic commerce has expanded rapidly over the past
five years and is predicted to continue at this rate, or even
accelerate. In the near future the boundaries between
"conventional" and "electronic" commerce will become increasingly blurred as more and more
businesses move sections of their operations onto the Internet.
Business to Business or B2B refers to electronic commerce between businesses rather than
between a business and a consumer. B2B businesses often deal with hundreds or even thousands
of other businesses, either as customers or suppliers. Carrying out these transactions
electronically provides vast competitive advantages over traditional methods. When
implemented properly, ecommerce is often faster, cheaper and more convenient than the
traditional methods of bartering goods and services.
Electronic transactions have been around for quite some time in the form of Electronic Data
Interchange or EDI. EDI requires each supplier and customer to set up a dedicated data link
(between them), where ecommerce provides a cost-effective method for companies to set up
multiple, ad-hoc links. Electronic commerce has also led to the development of electronic
marketplaces where suppliers and potential customers are brought together to conduct mutually
beneficial trade.
The road to creating a successful online store can be a difficult if unaware of ecommerce
principles and what ecommerce is supposed to do for your online business. Researching and
understanding the guidelines required to properly implement an e-business plan is a crucial part
to becoming successful with online store building.
What do you need to have an online store and what exactly is a shopping cart?
Shopping cart software is an operating system used to allow consumers to purchase goods and or
services, track customers, and tie together all aspects of ecommerce into one cohesive whole.
While there are many types of software that you can use, customizable, turnkey solutions are
proven to be a cost effective method to build, edit and maintain an online store. How do online
shopping carts differ from those found in a grocery store? The image is one of an invisible
shopping cart. You enter an online store, see a product that fulfills your demand and you place it
into your virtual shopping basket. When you are through browsing, you click checkout and
complete the transaction by providing payment information.
To start an online business it is best to find a niche product that consumers have difficulty
finding in malls or department stores. Also take shipping into consideration. Pets.com found out
the hard way: dog food is expensive to ship FedEx! Then you need an ecommerce enabled
website. This can either be a new site developed from scratch, or an existing site to which you
can add ecommerce shopping cart capabilities.
The next step, you need a means of accepting online payments. This usually entails obtaining a
merchant account and accepting credit cards through an online payment gateway (some smaller
sites stick with simpler methods of accepting payments such as PayPal).
Lastly, you need a marketing strategy for driving targeted traffic to your site and a means of
enticing repeat customers. If you are new to ecommerce keep things simple- know your
limitations.
Ecommerce can be a very rewarding venture, but you cannot make money overnight. It is
important to do a lot of research, ask questions, work hard and make on business decisions on
facts learned from researching ecommerce. Don't rely on "gut" feelings. We hope our online
ecommerce tutorial has helped your business make a better decision in choosing an online
shopping cart for your ecommerce store.

1.4. CHECK YOUR PROGRESS

1. What is E-Commerce?
2. What is online office suite?
3. What is Online Banking?
1.5. - REFERENCE

Chaudhury, Abijit; Jean-Pierre Kuilboer (2002). E-
Business and e-Commerce Infrastructure. McGraw-Hill.

Frieden, Jonathan D.; Roche, Sean Patrick (2006-
12-19). "E-Commerce: Legal Issues of the Online Retailer
in Virginia" (PDF). Richmond Journal of Law &
Technology 13 (2)

Graham, Mark (2008). "Warped Geographies of
Development: The Internet and Theories of Economic
Development" (PDF). Geography Compass 2 (3): 771.

Kessler, M. (2003). More shoppers proceed to
checkout online. Retrieved January 13, 2004

Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will Revolutionize the
Way We Buy, Sell and Get the Things We Really Want (Hardcover ed.). The Penguin Press.
pp. 246 pages.

Seybold, Pat (2001). Customers.com. Crown Business Books (Random House).

Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.).
Thomson Learning. pp. 741 pages.

Kotler, Philip (2009). Marketing Management. Pearson:Prentice-Hall.

1.6.- ANSWER TO CHECK YOUR PROGRESS

1. Read 1.1.
2. Read 1.2.
3. Read 1.2.
 Unit 2:
Content
2.1. Meaning, classification, B2B, B2C, C2B, C2C and G2G sites,
2.2. E-commerce in the field of education, finance, auction, news and entertainment
sectors,
2.3. Setting of an E-commerce case study portal and some popular E-commerce portals.
2.4. Summary
2.5. Glossary
2.6. Check Your Progress
2.7. Reference
2.8. Answer to check your progress

2.1. Meaning, classification, B2B, B2C, C2B, C2C, G2G sites

Ecommerce (e-commerce) or electronic commerce, a subset of ebusiness, is the purchasing,

selling, and exchanging of goods and services over computer networks (such as the Internet)
through which transactions or terms of sale are performed electronically. Contrary to popular
belief, ecommerce is not just on the Web. In fact, ecommerce was alive and well in business to
business transactions before the Web back in the 70s via EDI (Electronic Data Interchange)
through VANs (Value-Added Networks). Ecommerce can be broken into four main categories:
B2B, B2C, C2B, C2C, and G2G

B2B (Business-to-Business)
Companies doing business with each other such as
manufacturers selling to distributors and wholesalers selling to
retailers. Pricing is based on quantity of order and is often
negotiable.

B2C (Business-to-Consumer)
Businesses selling to the general public typically through catalogs
utilizing shopping cart software. By dollar volume, B2B takes the
prize, however B2C is really what the average Joe has in mind
with regards to ecommerce as a whole.

C2B (Consumer-to-Business)
A consumer posts his project with a set budget online and within
hours companies review the consumer's requirements and bid on
the project. The consumer reviews the bids and selects the
company that will complete the project. Elance empowers
consumers around the world by providing the meeting ground
and platform for such transactions.
C2C (Consumer-to-Consumer)
There are many sites offering free classifieds, auctions, and forums
where individuals can buy and sell thanks to online payment systems
like PayPal where people can send and receive money online with ease.
eBay's auction service is a great example of where person-to-person
transactions take place every day since 1995.

Companies using internal networks to offer their employees products and services online--not
necessarily online on the Web--are engaging in B2E (Business-to-Employee) ecommerce.

G2G (Government-to-Government), G2E (Government-to-

Employee), G2B (Government-to-Business), B2G (Business-to-
Government), G2C (Government-to-Citizen), C2G (Citizen-to-
Government) are other forms of ecommerce that involve
transactions with the government--from procurement to filing
taxes to business registrations to renewing licenses. There are
other categories of ecommerce out there, but they tend to be
superfluous.

2.2. E-commerce in the field of education, finance, auction, news and

entertainment sectors,

• E- Commerce in Education
E-business has got a great boost all across the globe. With hundreds of thousands of E-commerce
websites on the cyber space, the presence of E-commerce is vital now days. Owing to this, E-
commerce is in itself an established industry now and has a huge potential to grow. This has
necessitated the need of structured and organized E-commerce education among students so that
they can be equipped with the Internet knowledge to be globally competitive.

US have been the torch bearer for the world in introducing E-commerce education. By 2001,
numerous schools and colleges in the US had started awarding
bachelors and master's degree in e-business related subjects. In fact,
since the inception of 21st century, educators and scholars have
realized Internet technology as a powerful tool and vehicle for growth
and development. Hence, in this technologically advanced era, Internet
has become a central component of learning in schools and colleges.
While colleges in the US and Europe have been phenomenal in
imparting E-commerce education to their students for years, Asian
countries like China and India are accelerating faster to make E-commerce education an integral
part of their educational system.
E-Commerce Course

There are numerous ways in which E-commerce education can be undertaken. You can begin
your stint with E-commerce education by taking a single e-commerce course or by gaining an
insight about principles of E-commerce and its similarities and differences to other trainings.
Almost all universities of repute offer online degree courses and so you have several options to
choose. You can advance your career with the distinctive online degree programs of any
university. You can go for E-commerce certification programs or for full time degree courses.
No matter you want to study accounting, consulting, commerce, business administration, e-
business & e-commerce, finance, marketing or management, you can get all the courses online
by applying to the university that offer these programs. In case, you wish to study something
technical things like website design, you can get courses to learn about them online.

E-Commerce Jobs
There are numerous career opportunities in the field of E-commerce. Making a career in this
field demands the test of a real knowledge of the business world and the parameters that affect a
business. A business mind with technical expertise can make a huge impact in the world of
Internet jobs. When it comes to E-commerce jobs, there is no dearth of e-commerce
designations. Right from online marketing, SEO expert, website design to online sales
consultant, the field of e-commerce jobs seems endless. All you require is the right sets of skills
and knowledge.

E-commerce education has been phenomenal in making a deep impact on higher education.
Growth in the Internet over the last few decades has led to a great impact on communication and
research in the higher educational institutes. Many administrators, MBA's, working
professionals, housewives and similar people who fell short of time to go to a campus program
have been able to benefit immensely from online courses.

E-commerce education has opened new avenues for cyber law studies. It need not be stated that
the importance of cyber laws has increased by leaps and bounds in the recent years. With
hundreds of cyber crime cases every day, awareness and knowledge about Internet has become
more important. E-commerce education not only equips students about latest career
development advancements, it also opens doors for access to information and knowledge.

E-commerce education has the potential to evolve as one of the biggest trends in the US
educational system. Next to the health care industry, the educational system is the biggest sector
in US and E-Commerce is evolving as a popular trend in it. The E-commerce future is bright and
we're bound to witness, E-commerce education as an established form of education.

E- Commerce in Finance
The issue discussed the advantage, service content of the internet financial profession, the
opportunity and challenge faced by the middle and small financial institution in the developing
country and the country which is undergoing economic transform, the development strategy of
our country internet financial and the safety problem brought about by the payment reform.
.
1: Advantages of Internet Finance
As the main developing tendency of the finance profession, the Internet transaction will become
a very good channel to transmit financial information.
1: In finance realm, the finance trends of funds circulation can be delivered to all over the world
quickly. Realizing the whole service on Internet could break the limit of time and space.
2: Reducing the cost in bank and improving the efficiency. A research shows that the cost of a
transaction in common sub branch is about $1.07, however the cost on Internet is $0.01 and it
can also provide personal service which traditional banks have great difficulty to do.
3: Internet can connect billions of consumers all over the world, which will do good to collect the
marketing feedback information and develop the potential buyer-market.
4:The bank gets involved in the goods transaction which can make the money circulating in
Internet with more safety and efficiency and ensure the fulfillment of the exchange of
commodities.

2: Finance Profession Service Types

A new digital economy extended from E-transaction and bank settlings have changed the process
of E-commerce. The reform of financial service methods has brought out the development of the
service contents in finance.

1: Internet Banking
1: Concept, Function Internet banking is a financial joint which is set up in Internet. There is no
hall, no sales department. Only through a computer which is connected to Internet can you
enjoy every service anywhere in 24 hours .It is also called “virtual bank”. Internet banking has
two models in concept: one is the new E-banking, the development of which depends wholly on
Internet. Almost all of its transactions are operated on Internet. The other is that the traditional
banks apply Internet services to develop traditional banking business, dealing service, set up
family bank and firm bank etc. Internet bank is a virtual bank counter on Internet. Internet is a
media for its personal business. It can supply message inquiring accounts transferring, paying on
line, trust business for personal customer who has an account on it.
2: Development
The rapid development of Internet has enough capacity to develop a new business transaction
model. It can promote the development of the Internet banking by fulfilling the electronic
transaction on internet. Finance always stands at the head of the digit revolution. In every
country, finance is always the biggest, most advanced user in computer and web. On Oct. 18,
1995, the first Internet bank was set up in America. The bank is established on Internet. It has
only ten staff members at a website. In 1996, its bank savings has been 140 million dollars. In
1979 its bank savings had been 400 million dollars. Internet bank develops very quickly. The
development of Internet bank in our country began in April ,1997. But now the consumer’s
scope is narrow, the quality is little. The customers are between 20—35 years old who have high
revenue, good education, and they are active to accept new things, and the firms on internet are
only 30 thousand, which takes just one percent of Chinese enterprises.

3. Advantage
(1). The operating cost on Internet banking is only 15%--20% to operating revenue. The
operating cost of traditional bank is 60%. Otherwise, the operating cost of Internet bank is far
lower than the traditional bank.
(2). The bank and the consumer can communicate with each other directly through web.
Utilizing the feedback messages, the vocational department can find the potential customers, and
the scheme department can design new financial goods according to the consumer’s need.
 2: Internet Stock Exchange
1:The meaning of Internet stock exchange If the
process at which the customers ordered to the sales
department can be realized through Internet and then the
exchange result can be transited from sales department
to customer also through Internet, this process is so-
called Internet transaction. This kind of transaction
always results in exchange between money and stock, so
it is also one kind of the E-commerce. There are mainly
two kinds of transaction formation now in our country.
Firstly, exchange directly through sales department on
Internet: the customers can order and inquiry. Secondly, the customer can reach to the sales
department through a web site belonging some Internet service.

1. The Advantages of Internet Stock Exchange

(1). The cost of developing Internet exchange is inexpensive. At the same time, it can make up
with the shortage of invisibility of trust through telephone and shortage of prone to make mistake
etc.

(2). Internet exchange and comprehensive service are easily managed and controlled. It can take
full advantages of the resource, on the other hand, it requires small investment. At the same time,
it makes great profits and is good at extending transaction developing new customers.

(3). Adopting statistic cipher and many kinds of customer identity examining methods etc. The
safety of the Internet stock exchange is much higher than that through telephone trusting.
2. The development of Internet stock exchange

In America, the stock market is one of the transaction at which the application of E-commerce is
most popular. About 20% of the bills are transported though the Internet in American stock
market. At present, in our country the Internet exchange is most active in the stock sales
department. The exchange occurs between the customer and stock sales department and has no
influence on the exchange formation among the sales department. Since 1994, China’s stock
exchange net has covered the whole country. Approximately 2600 sales departments of more
than 300 stock companies are connected to each other. Its highest volumes of transaction per day
are more than 300 hundred million RenMinBi. It has supported greatly the development of China
stock market.

The changes brought about by the Internet stock exchange are as follows:
(1). The efficiency of stock market is enhanced greatly.
(2). The scope of stock market is greatly extended.
(3). The issue cost of investment stock is greatly decreased.
(4). The issue and transaction method of stock is greatly improved.
(5). Internationalized stock market is greatly promoted.
3:Internet Insurance
3. Concept and Application
With the development of Internet, the competition among insurance enterprise extended from the
conventional area, it challenged greatly the conventional operating methods of the insurance. The
Internet insurance includes: quoted price through the Internet; agent service and management and
so on. Through instituting a web site, the insurance company takes advantages of his homepage
to propagate company resume, insurance knowledge, the insurance types and service items etc.
The customers may look it through freely, look into the insurance types and acquire all kinds of
information such as insurance duty, expense rate, even clauses and so on.

4. The Development of Internet Insurance

It is reported by the USA Independent Insurance Association that: in the future ten years, 31% of
business insurance transactions and 37% of individual insurance transaction will be operated
through Internet. The Internet insurance will become a “black horse” in the international
insurance market. With the popularizing of the computer in our country, the Internet customers
grow quickly, the mass Internet gives birth to huge potential market. The statistic indicate that: in
our country, more than 70% of Internet user have a higher income than the average and they are
between 21-35 years old, while according to the investigation of the insurance market, it is just
the group who have the strongest interest and awareness in insurance. Many famous insurance
companies make use of the opportunities to occupy the Internet insurance market in advance.
Therefore, following the Internet development tendency, the companies should set up and better
up their ideas on Internet. Contrasting with the traditional method, the advantages of the Internet
insurance are:

(1). Without intermediary: through the Internet, the insurance company can avoid the
intermediate such as agent, broker etc. By affording inexpensive Internet service fair, the
company now can save a lot of commission and management expenses, lower thecost, extent the
contracting area, and promote trade efficiently.

(2). Shorten the distance between the company and customer: by “help yourself” model of the
Internet service system, the customer can acquire the service he wanted conveniently and quickly
without going out the house.

(3). The flexible information propagating system: the company can institute Internet sit and
broadcast Internet advertisement to the whole world by bulletin or E-mail.
3: It bring out opportunity and challenge to the middle or little bank and the new developing
finance enterprise. The E-commerce is a financial institution .It brings out opportunity especially
for the developing country and the country which is undergoing economic transform. With the
infiltrating of the E-commerce, if the large finance company can’t gradually adapt to the
development of E-commerce and make corresponding adjustment, it might lose some of their
advantages. It is predicted that the Internet will alter the order of the bank company.
As affording a service transcending the limit of one country, the competition among the Internet
finance will be more intense. It will require a higher demand for the plan, construction,
development, operation, management of the company and for the cultivation of the employer’s
quality and ability. At the same time, financial companies should follow the development of the
E-commerce, make innovation in the economy service and payment, participate actively in the
competition of the international E-commerce and promote the development of the world
economy.
Therefore, it is necessary to research and regulate the digital currency policy and safety system
criteria of the E-commerce. Especially for the flow of the digital currency, only when it reaches a
certain level in the management, safety, secrecy, flexibility and internationalization etc, can it be
applied in E-commerce trustfully.
At the age of E-commerce, finance will face the following challenges:
(1) The development strategy of the finance transaction system.
(2) The reform and adoption of the conventional transaction and system, and the exploitation and
application of the new model finance information system.
(3) The law, regulation vacuum and the finance management problem come with the E-
commerce.
(4) The issue, payment and management of the digital currency.
(5) The safety problem of the public Internet information coping with hackers.
(6) The development, competition and regulation of the new trade.
4: The problem in the Internet finance and the method to handle it in our country.
1.The Problem in the Finance Electronic in Our Country. (1) There is no overall organization and
construction of the criterion: the society lis wasted because of the lack of the conformity of the
transaction regulation and information pattern of all kinds of transaction.
(2) The whole efficiency of the financial electronic system is not good: the net of bank is not
connected with each other, and this also leads to huge loss.
(3) The scale of the financial information communication net is small, and its operating and
safety level is low. There are no special affair disposition transporting nets, at the same time, the
protection method of the safety of the net is far from enough.
(4) The development of the E-payment system falls behind, the setting method can’t satisfy the
requirement of the progress of the situation.
(5) The transport velocity of the Internet is slow, and the expense is high.
2 Methods to Solve the Problem.
(1) Accelerating` the development of the E-payment method: the E-commerce can work
efficiently only after the practicable e-payment system had been set up.
(2) A harmonious relationship must be achieved among all kinds of banks, and the China
People’s Bank should propose the regulation of the basic net connection, the pattern of the
information transport and the criteria of the information collection.
(3) The financial profession is of high risk, we must make full use of the management
information system to prevent and resolve the financial risk. Therefore, we must further reform
and construct the financial market, utilize the public net effectively, extend the newly developed
financial transaction actively, research the properties and requirement of the new market and
create new financial service items.
5:The Safety Problem of The Financial Electronics
The more the financial electronic, the more it will depend on the computer and the more risks it
will face. Especially with the rapid development of the Internet, as a kind of new transaction
realm, net is now indicating a new developing tendency. This will unavoidably promote the
formation of new setting methods. The new method must reach a certain level in the safety,
velocity, privacy and internationalization before it can be used with insurance in the E-
commerce. So it is very important to fortify the safety management of electronic financing which
will affect greatly the construction and development of the electronization of the bank and the
safety of the funds of the bank. This provides the necessary condition for the healthy
development of financial eletcronization.
As far as the construction and application of financial eletcronization is concerned, its potential
safety problems are as follows:
(1) Because the distribution of the computer communication net is very extensive, it is difficult
to establish centralized management.
(2) The application software system facing the customer directly is the most vulnerable target by
the criminal.
(3) Bank card system: at present, the card widely used in our country is magnetic credit card,
while its structure is simple and can be forged easily.
(4) The operating environment of computer: the menace of software mainly rises from virus.

E Commerce in Entertainment Industry

• Content is their currency -- And it can be delivered directly to consumers over networks
• Music first. Others forms of entertainment content to follow
• Adequate copyright protection a must -- standards
• Technology is largely here today
• "Winning" business models still evolving

Entertainment E-Commerce: The Business Transformation at Hand

New Business Processes
• Post-production
• Digitization of Content
• Staging for Distribution
• Asset Management
• Business Tracking Systems
• New Market Opportunities
• Web as a Marketing Tool
• e-commerce for Products
• Online Access to Content
• Efforts toward Distribution
• New Culture

New E-Commerce Environment in Entertainment

• New Customers
• New Partners, Suppliers, Resellers
• New -- and Reinvigorated -- Channels to Customers
• New Relationships with Customers
• Closer and More Responsive
• New Products
• New Competitive Threats
• New Challenges to Established Channels
Digital Music Marketplace Dynamics
• 500,000 Music Songs and CDs Available on the Net
• Piracy will Give Way to Promotion and then
 • Downloads, according to Forrester Research
• Online Music in Europe to Grow Dramatically, according to Jupiter Communications
$87.6M 1999
$174.1M 2000
$1.12B 2003
• All Players Exploring Multiple Options
• Growing Realization that Companies Must Collaborate to Accelerate New Competitive
Marketplace

IBM Digital Music Distribution Deployment

• Three Years in Development
• Working with 5 Major Record Labels
• Industry-wide Collaboration to Benefit Consumers
• Market Trials Beginning
San Diego, California
Participants: 1,000 Broadband and 1,000 Narrowband
2,500 CDs and hundreds of commercially available singles
• Working with Other Key Technology Providers

Electronic Music Management System: Benefits to Consumer

• More Convenience
• More Choice of Product
• More Choice of Shopping Experiences
• New Consumer Relationships with Music Industry
• Reinvigorated Record Store Experience
• New Product Configurations
• Slide 8 06/29/99EMI Emerging as E

2.3. Setting of an E-commerce case study portal and some popular E-commerce
portals

Client
The client is one of the largest business houses in UK dealing in cupboards and other office and
home storage products. They have a rich experience of more than 25 years in Office Cupboards,
Industrial Cupboards, Tool Lockers and Cupboards, Clothes Lockers and offer these products at
very competitive prices. The company launched a fully operational e‐commerce site and today it
has a huge customer base that visits the site and place orders.
The Challenge
Prior to the launching of the online sales portal, the client’s business was restricted to the local
market only. Though they had a good rapport and good number customers, but their business
volume was restricted and wasn’t growing beyond a certain limit. Then the client approached us
for a feasible solution. When we started off with the project, the company wanted a solution that
would allow their website to be easily updated with the latest products and offering details. They
even wanted to use HSBC Payment Gateway in the website which requires a lot of pre‐requisites
unlike other payment gateway services like Authorize.net.
In addition to this, the client wanted a fully‐scalable solution to handle their ever‐increasing
customer requirements. The client also needed to be assured that their application maintained
maximum reliability as any downtime to their e‐commerce application couldlead to loss of
revenue.
Few of the main objectives when the project was initiated were‐
• Online store presence for B2C (primary) and B2B (secondary) markets.
• Replacement for the annual catalog.
• Creation of an additional and solid business asset.
• Help in generation of qualified leads
• Provide a tool to manage the Products Inventory.
• Provide the end‐users an very easy online catalog to select their products
• Provide a secure online payment system so that users can shop for their desired products
and make payments easily.
T h e S o l u t i o n: P H P, C u s t o m i z e d E - c o m e r c e P l a t f o r m a n d
MySQL
The client decided to launch their application with two main phases. The first phase was to
launch the website with the major categories of products when the site was ready so that
customers can start accessing the site and know more about the services and products offered by
the client. The second phase was to launch the back‐office part where all the administrative work
could be performed with the daily processing of the orders, runs reports and generates statistics.
The two sections in conjugation give an accurate picture of daily transactions allowing for
effective site administration with easy. Initially after researching numerous scripting languages,
the Client chose PHP to build their application. The company was particularlyimpressed with
PHP’s functionality and the ease with which it allowed them to launch their site.They continue to
rely on therobustness of PHP which assures their mission critical application runs at the highest
optimization and scales for their high traffic levels. The application demanded several
functionalities. Not all of them were not offered by an e‐commerce tools or software available in
the market and using them and customizing it as per the client’s requirements was a very lengthy
and time‐consuming process. So we choose to develop a customized e‐commerce engine which
would suite this mission critical project. Apart from this thecode completion, code analyzer, CVS
integration was especially useful during the various development stages and continues tobenefit
them today

Tools Used
• PHP 5.0
• Java Script
• MySQL 5.0
• E‐commerce engine with HSBC Payment Gateway
• Apache
Benefits
• Application runs at highest optimization and scales for high traffic
• Access to global markets.
• Expanded Customer Base
• Increase Visibility through Search Engine Marketing
• Provide Customers valuable information about your business
• Business available 24/7/365 ‐ Never Close
 • Build Customer Loyalty
• Reduction of Marketing and Advertising Costs
• Replacement of costly, annual product catalogs.
• Reduction in inventory management and per unit administration cost due to high sales
turnover.
• Centralized data storage.
Conclusion
Now no one can ignore the Internet’s massive sales potential. Our Client, the largest business
houses in UK dealing in cupboards and other office and home storage products has embraced
this platform and developed a highly profitable and efficient e‐commerce channel. Today the
client maintains a wide range of industrial and office products which include Office Cupboards,
Industrial Cupboards, Tool Lockers and Cupboards, Clothes Lockers etc. provided from
thousands of manufacturers. By choosing to develop their application with PHP client was able
to launch their website with speed and ease while enjoying the robustness and scalability they
demanded from the application

Popular E Commerce Portals In India

E-commerce companies in India offers the most tangible and finest e-commerce solutions,
provide high end e-commerce solution taking utmost care of the privacy and security of the e-
commerce website. E-Commerce service includes shopping carts, database programmers,
graphic design services, graphics, e-business, Flash designs etc.

List Of Top E-commerce Companies Of India:

ASA Systel Communications Pvt Ltd:

It is a leading E-commerce company in India which provides innovative and superb quality web
services which encompasses the building of e-commerce related websites and portals. The
company also uses the latest payment modes and security. ASAS has its offices in Chennai, Luck
now and will shortly set up offices in Delhi, Mumbai, Kathmandu, Bhopal.

Candid Info:
This Indian E-commerce company is based in New Delhi. It is a renowned Offshore Outsource
Web designing development e-commerce company. It offers off shore web development
,designing, SEO solutions for large corporations and SME's. The company specializes in Web
Hosting,E-commerce solutions,portfolio,SEO,Blog etc.
Chenab Information Technologies Private Limited :
This E-commerce company in India comprises of web enabled business and web bases
services,airline and security systems by using the internet technologies and tools of the state of
the art. The company has three Software Development centres in Mumbai and the overseas
branch office in New York. It is the first software company across the globe to get the
certification of ISO 9001:2000.
Eurolink Systems Limited:
This leading E-commerce company provides consulting and e-business solutions,FlexTCA
Systems,Trillium Protocol services to the global community. In order to be compliant with
specific customer requirements,the company combines customized and COTS HW/SW. The
company has its office in England, U.S, Switzerland, India with about 200 employee strength.
HashPro Technologies:
It offers e-business and traditional analysis, development, implementation, design and strategic
planning. It is a leader in the provider of integrated talent management software organization in
India. It is key technology consulting provider. It renders services like the E-commerce
Hosting,Internet Marketing,Human Resources. The e-Workforce initiative of the company will
enable the company to become a 100 percent e-Corporation.
Compare Info Base:
The company is leading provider of e-commerce portals and IT solutions. The company manages
about 1500 websites and portals with 4000 domain names. It has web presence in Maps,Software
Development,GIS Travel,Education,Media,Greetings etc. The company is a significant name in
developing and selling E business. It specializes in Content development services,Website
development services,PHP Programming & Development etc.It has its office in Mumbai,
Kolkata, San Jose, Delhi.
Sanver E-solutions:
This company is based in Mumbai. They believe that Information Technology is a way to the
business objectives. It is a IT Consulting and Solutions Provider which offers personalized and
personal business solutions using Information and Communication Technology. It renders other
services like the CRM & SFA,Sugar CRM Hosting,Implementation etc.
Planet Asia:
This E-commerce company in India uses track record and deep experience in externalized
applications to produce high quality B2SPEC (Business to Partner, Supplier, Customer) solutions
to global enterprises.
Candid Web Technology:
This fast growing E Commerce Company in India is a provider of Complete Web Solutions for
the design and development of dynamic web sites .The clients of the e-commerce company spans
from the small scale companies to corporate organizations.

2.4: SUMMARY

B2B (Business-to-Business) Companies doing business with each other such as manufacturers
selling to distributors and wholesalers selling to retailers. Pricing is based on quantity of order
and is often negotiable. B2C (Business-to-Consumer) Businesses selling to the general public
typically through catalogs utilizing shopping cart software. By dollar volume, B2B takes the
prize, however B2C is really what the average Joe has in mind with regards to ecommerce as a
whole. Having a hard time finding a book? Need to purchase a custom, high-end computer
system? How about a first class, all-inclusive trip to a tropical island? With the advent
ecommerce, all three things can be purchased literally in minutes without human interaction. Oh
how far we've come! C2B (Consumer-to-Business) A consumer posts his project with a set
budget online and within hours companies review the consumer's requirements and bid on the
project. The consumer reviews the bids and selects the company that will complete the project.
Elance empowers consumers around the world by providing the meeting ground and platform for
such transactions.C2C (Consumer-to-Consumer) There are many sites offering free classifieds,
auctions, and forums where individuals can buy and sell thanks to online payment systems like
PayPal where people can send and receive money online with ease. eBay's auction service is a
great example of where person-to-person transactions take place everyday since 1995.
2.5. Glossary
A
Acceptance Testing (AT):
The testing performed by a user to determine that an automated system (equipment or software)
for a specific task or environment, e.g., a translator for a specific application and interchange
format, performs according to specification.
Acquisition Manager (AM):
The system/equipment program manager, the program manager's staff, and other DoD officials
responsible for determining contract requirements for the generation, acquisition, and use of
defense system/equipment data, and having acquisition authority for defense systems and
equipment.
Ada:
A computer language designed as a standard for U.S. government and NATO procurements. Ada
is a required language for mission-critical projects.
ANSI (American National Standards Institute):
The American National Standards Institute (ANSI) is a privately funded, non-profit organization
which coordinates the development of voluntary standards in the United States and is the agency
that approves standards (as American National Standards). It coordinates and manages U.S.
participation in the work of several non-governmental international standards organizations,
including ISO and IEC (NCGA). ANSI's membership consists of over 1000 companies and
organizations.
Analog:
Continuously variable. Until recently almost all audio signals were analog. At any instant, it
could have a value between zero and a few volts and could be graphed as a flowing waveform. In
contrsat, at any instant, adigital signal can have the values of 0 or 1.
Anchor:
The object that is highlighted and "clickable" on a web document. It may be a word, a phrase, or
an inline image. When clicked, it may send you to another spot on the page (back link), another
page, a document on another server, or a place on a remote document.. An anchor tag has the
following format: <A HREF="something">highlighted text or image</A>
ANSI X12:
The ANSI X12 standards specify the format and data content of electronic business transactions.
Applet:
A miniature application - an enhancement to a web page involving the embedding a foreign type
of program in the page.
Application Profile:A number of application protocols required for a specified task or industry
sector. [Associated with STEP]TEP]]f Trade and Industry, United Kingdom. "Open Systems in
Manufacturing".
Application Protocol (AP):
Defines the context for the use of product data and specifies the use of the standard in that
context to satisfy an industrial need. [Associated with STEP] , United States Government.
"Military Standard 1840-B" 3 November 1992.
Archie:
A system for locating files that are stored on FTP file servers. A search utility. A keyword search
service that searches the directory and file titles of all FTP sites that are indexed.
ARPAnet:
The name by which the Internet was originally known.
ARPA (Advanced Research Projects Agency):
An agency within the defense department that distributes funds for defense related research
projects. ARPA (AKA DARPA) provided the initial funding for the development of platform
independent wide area internetworks. This project eventually became the Internet.
ASCII (American Standard Code for Information Interchange):
The American Standard Code for Information Interchange is used extensively in data
transmission. The ASCII character set includes 128 upper and lower case letters, numerals and
special purpose symbols, each encoded by a unique 7-bit binary number. ASCII text is a subset
of the ASCII character set consisting principally of the printable characters.

ASCII text is the plain fixed width text found in email. While HTML web documents are sent as
ASCII files, they contain embeded tags that can be interpreted by web browsers. There is an
ASCII number corresponding to each letter of the alphabet: A=65, B=66, ... a=97, b=98.
Punctuation marks are also assigned an ASCII number: Period=46, Space=32. ASCII numbers
begin as follows: 0=48, 1=49, ...

The fact that every computer codes the letters the same way is what makes communication
between computers possible. The numbers shown above are in decimal (base 10). Most compact
tables are in hexidecimal ( base 16).
Attribute:
Qualifying property of an HTML tag. Attributes are usually optional.
Backbone:
A central high speed network that connects smaller, independent networks. the NSFnet is an
example. The connections between the primary computers in a network. Stub networks branch
off the backbone.
Bandwidth:
Used to express the maximum possible throughput of a data link in bits per second. A T1 line
has a bandwidth of 1.544 Mbps. A 28.8k baud modem has a nominal bandwidth of 0.0288 Mbps.
Bar Coding:
Graphical representation (generally narrow and wide bars) that represent one of a number of
numeric or alphanumeric standards.
Baud:
A measurement of signaling speed of a data transmission device Baud rate does not equal bits
per second.

BPR (Business Process Re-engineering:

The fundamental analysis and radical redesign of everything: business processes and
management systems, job definitions, organizational structures and beliefs and behaviors to
achieve dramatic performance improvements to meet contemporary requirements. Information
technology (IT) is a key enabler in this process.
Browser:
A World Wide Web client. See web browser
Bulletin Board Service (BBS):
A bulletin board is similar to a network and thus Internet. Requirements for a bulletin board are a
computer, modem, and preferably bulletin board software. A bulletin board can contain
directories of files (for user downloading) and e-mail facilities (where users can exchange/or post
messages). Based on their access privileges, those using a bulletin board can read, download
(copy from the bulletin board), upload (place on the bulletin board), and even modify stored
files. Bulletin boards can be on the Internet. Bulletin board software is required to allow the
bulletin board owner to place limits on access. (i.e., not all BBS users should be allowed to
modify files that are stored on the BBS. Not all of the BBS's users would be allowed full access
to the computer on which the BBS is stored.seel electronic bulletin board
Cache:
Cache memory is a small area of very fast RAM used to speed exchange of data.
CAD (Computer-Aided Design ):
The application of information technology to elements of the design process for manufactured,
assembled, and constructed products, covering both drafting applications (in the creation,
modification, storage, and production of engineering and other technical drawings) and modeling
(the generation and use of full three-dimensional models).
CAE (Computer-Aided Engineering):
The application of information technology to elements of the design and engineering process. It
includes all types of performance systems, e.g., heat transfer, structural, electromagnetic,
aeronautics, and acoustic analysis.
CALS (Continuous Acquisition and Life-cycle Support):
( formerly Computer-Aided Acquisition and Logistic Support):
CALS is a global strategy to further enterprise integration through the streamlining of business
processes and the application of standards and technologies for the development, management,
exchange, and use of business and technical information.
CALS Test Network (CTN):
The CALS Test Network (CTN) is a confederation of hundreds of industry and government
organizations that have agreed to evaluate and demonstrate the interchange and functional use of
digital technical information using CALS standards. This is accomplished through a
collaborative multi-service effort.
CAM (Computer-Aided Manufacturing):
The application of information technology to the control and management of manufacturing
processes, normally restricted to the control of machine tools such as lathes and mills, where the
tool is directly controlled by a computer.
CASE (Computer-Aided Software Engineering):
CASE is an umbrella term for a collection of tools and techniques which are said by their
distributors to promise revolutionary gains in analyst and programmer productivity. The two
prominent delivered technologies are application generators and PC-based workstations that
provide graphics-oriented automation of the front end of the development process.
CBT (Computer-Based Training):
Training which is delivered via a computer. Computer-based training includes tutorials, drill and
practice, simulations, testing and may also include embedded training. Computer-based training
programs are already delivered in digital form to the government.
CCITT Group 4):
This CALS standard for raster graphics incorporates tiling, which divides a large image into
smaller tiles. Graphic files are exchanged in CCITT/4 format in a compressed state so they take
up much less file space.
CCITT:
Consultative Committee for International Telephone and Telegraphy International committee
that specifies international communication standards.
CD ROM, CD ROM Drive (Compact Disk Read-Only Memory):
A read-only disk storage technology that provides up to 600Mb of space in about the same space
as a 3.25 in. computer diskette (which stores 1.44Mb). Data stored in this format cannot be
modified or updated. An additional CD (computer disk or compact disk) ROM drive is required
to access and use data stored in this format and the data cannot be changed or updated. Access
speeds are slower than from a standard computer disk drive. The CD ROM drives will typically
access both computer disk and compact disk music formats. CD ROMs use a laser technolgy
while standard computer diskettes use a magnetic technology. Neither technology has reached its
limits in terms of storage capacity or access speed.
CE (Concurrent Engineering):
A systematic approach to creating a product design that considers all elements of the product life
cycle from conception of the design to disposal of the product, and in so doing defines the
product, its manufacturing processes, and all other required life cycle processes such as logistic
support.
CERN (Conseil Europeen pour la Recherche Nucleaire):
In the late 1980's, the computer services group were looking for a way to facilitate access to the
types of information that CERN research fellows needed. In 1989, Tim Berners-Lee came up
with a brilliant way to send and receive complex documents created on diverse computers using
a variety software packages. He did so by combining the Internet with hypertext, a formatting
language, and a client server model. You run a program called a client (or browser) on your
computer. Under your direction, this program originates requests for information, which are
received by server programs running on some other computer on the network. The server
delivers a copy of the requested data and the client displays it. The protocol that allows a browser
to send out a request via the Internet is called HTTP.
CGI, cgi-bin (Common Gateway Interface):
The CGI through which binary files and HTML files communicate. CGI is not a computer
language. CGI scripts are commonly written in PERL (or AppleScript) and run in the
background on the web server. CGI is the mechanism that has become a standard way of
extending the capabilities of a web server. The counter seen on this and other home pages is
typically done in a CGI. When you fill out a form, CGI was the likely recipient of the data that
was sent back and send it on to a database system. API (Application Program Interface ) is a
higher performance alternative to CGI. With support from both Netscape and Microsoft, these
serve extensions offer opportunities for web publishers to create more sophisticated (and useful)
sites.Cf. Gateway
Client Pull:
A simple type of Web animation in which a series of pages is loaded in succession, governmed
by concealed coding in the headers of the HTML file.
Clipboard:
A part of computer memory used as temporary storage for anything cut (Ctrl-X) or copied (Ctrl-
X) to it. Text and images stored on the clipboard can be pasted (Ctrl-V) into another part of the
document or in another document. New items are copied over (i.e. replace) what was previously
on the clipboard
CGM (Computer Graphics Metafile):
This file format standard is a two-dimensional picture description or vector-oriented illustration
data delivered in digital format. CGM is suited for illustrations often found in training,
maintenance, and technical manuals.
CIM (Computer-Integrated Manufacturing):
The application of information technology to the management of complete systems or
subsystems within a manufacturing environment, characterized by the integration of many
separate applications such as CAD, CAM, CAE, and robotics together with commercial
applications such as stock control, spares ordering, and process planning.
CIM (Corporate Information Management):
The US Department of Defense initiative to streamline and improve the way information is
managed throughout the military. The Information Management philosophy is founded on
business process improvement.
CITIS (Contractor Integrated Technical Information Service):
A technical information service based on the integration of databases (contractor , subcontractor,
and government ) contractually established and managed by the defense contractor to receive,
maintain, and provide access to technical and support information on a defense system. [MIL-
STD-974]ith permission from Joan Smith. Adapted from "An Introduction to CALS: The
Strategy and the Standards", 1990.
Client:
A computer or software that requests a service of another computer system or process (a
"server"). For example, a workstation requesting the contents of a file from a file server is a
client of the file server.

A web browser is commonly referred to as a client.

CMS (Life-cycle Management System):
A set of processes (which may include computer-aided software engineering tools) which
facilitate the creation, tailoring, and navigation of a system development life cycle. A life cycle
management system may take the form of an integrated project support environment or an
estimating system linked to a project scheduling and tracking system.
COCOMO:
A tool for manpower estimating, life cycle costing, and scheduling tool for manpower
estimating, life cycle costing, and scheduling. * National Security Industrial Association. "CALS
Expo '93, Proceedings and Reference".
Communication (COM) port:
Logical designation of serial communication channels.

Communication Protocol (CP):

The rules governing the exchange of information between devices on a data link. * Fairfax
CALS Shared Resource Center, 1994.
Compliance:
The act or process of complying to a desire, demand, or proposal. * Adapted from: Sharon
Component Testing (CT):
Is conducted to verify the implementation of the design for one software element (e.g., unit,
module) or a collection of software elements. * Sharon J. Kemmerer. Department of Commerce,
United States Government. "CALS Testing Programs, Status and Strategy" October 1992.
Configuration Management (CM):
CM controls and manages product description with its supporting technical and scientific
information. * Fairfax CALS Shared Resource Center, 1994.
Conformance Testing (CT):
The testing of a candidate product for the existence of characteristics required by a standard. Its
primary activity is to ensure specified behavior of implementations. Additional benefits include:
clarifying the standard for guiding future implementation, producing a feedback loop to the
standards making bodies for improvements to the standard, encouraging commercial
development by supporting a baseline for commonality in all products, and providing greater
confidence on the part of the potential enterprise user. Conformance-tested implementations
increase the probability these same implementations will be able to inter-operate, but provides no
guarantee.
COTS (Commercial Off The Shelf ):
Commercial Off The Shelf refers to software and hardware technology which is commercially
available and requires minimum changes (design/development), if any, before implementation.
Cyberspace:
A term coined by Wm. Gibson in Necromancer to describe the sum total of computer accessible
information in the world.
Database Management System (DBMS):
Software designed to manipulate the information in a database. It can create, sort, display
selected information, search for specific information, and perform many other tasks of a
database. This kind of software allows speed of access and the ability to automatically produce
reports.
Data Dictionary (DD):
A repository of information about data, such as its meaning, relationships to other data, origin,
usage and format. The dictionary assists company management, database administrators, systems
analysts and application programmers in effectively planning, controlling and evaluating the
collection, storage and use of data. A data dictionary manages data categories such as alias, data
elements, data records, data structure, data store, data models, data flows, data relationships,
processes, functions, dynamics, size, frequency, resource consumption and other user-defined
attributes.
Data Management Standards:
Data management standards will provide common definitions of the data elements, their
attributes, relationships, data integrity constraints, and database access rules. This includes
standards for system and data protection and security.

Data Model:
The logical data structure developed during the logical database design process is a data model
or entity model. It is also a description of the structural properties that define all entries
represented in a database and all the relationships that exist among them.
Data Modeling:
A structured method for representing and describing the data used in a business function
automated system. Data modeling is used in combination with two other structured methods,
data flow analysis and functional decomposition, to define the high-level structure of business
and information systems. Its primary function is to define the attributes of and relationships
among data items.
Declaration File:
A file accompanying any set of transferred files comprising a document; provides all information
necessary to the successful disposition of the digital files at the destination, but has no purpose
beyond that function.
Defacto Standard (Proprietary Standard):
A standard which has been endorsed by industry or government, but not officially approved by
an accredited standards body such as ISO.
Descriptive Markup:
Markup that describes the structure and other attributes of a document in a non-system-specific
manner, independently of any processing that may be performed on it. In particular, it uses tags
to express the element structure.
Destination System:
The computer hardware, software, and network receiving transferred data.
Development Testing:
Development testing is equivalent to "proof of principal" as proposed standards are being
developed, and before those draft standards achieve technical stability.
DID (Data Item Description):
A DID identifies specific data requirements, which may include the format of a report used to
display the data. Most current DID's were prepared with only the hard copy (paper, aperture card,
etc.) document environment in mind. In a CALS environment, two aspects of data acquisition
must be examined to determine whether existing DID's are adequate: the deliverable itself
(documents, processable data files, interactive access), and the delivery mode (physical media or
telecommunications).
Digital:
Characterized by being either on or off with no intermediate value. The term is applied to
computer data in transit and contrasted with analog.
Digital Technical Data:
Includes the part descriptions, product specifications, and standards that the initial designer
draws upon; the engineering drawings and product data used in design and manufacturing; the
information needed to guide the people who operate the system in the field, or who support and
maintain it at all echelons of the logistic support structure; the materials needed to train new
operators, maintainers and other technicians; and the information needed for re-procurement, re-
manufacturing, modification, and feedback to industry for future design.
Direct Connection:
A hard wired connection between a computer and the Internet giving the computer an IP
address and the ability to function as a Web site. Contrasted to a dial up connection

Distributed Database:
A database whose objects (tables, views, columns and files) reside on more than one system in a
network, and can be accessed or updated from any system in the network.
Distributed Systems:
Refers to computer systems in multiple locations throughout an organization working in a
cooperative fashion, with the system at each location serving the needs of that location but also
able to receive information from other systems, and supply information to other systems within
the network.
Document:
A set of text and/or graphical data organized and formatted for direct human interpretation. A
document can be delivered as printed pages or digitally in the form of composed page images.
Document Image File:
A digital data file representation of a human interpretable document. Examples are raster image
files and page description language files.
Document Type:
A class of documents having similar characteristics; for example journal, article, technical
manual, or memo.
Document type declaration:
A markup declaration that contains the formal specification of a Document Type Definition
(DTD).
DTD (Document Type Definition):
SGML is a metalanguage used to define particular document types. One could create an SGML
for a cookbook that had only five tags. Alternatively, one could use SGML to define a web
document and call it HTML. SGML is an International Standard for marking up electronic
documents, ISO 8879
Document Type Definition:
When you create a new markup language in SGML , you write what is called a DTD which
defines what your markup language looks like and how to handle documents that have been
written in that markup language. When you use an HTML validator, you are checking the
validity of your documents against an HTML DTD. HTML 1.0 and HTML 3.0 comply with the
SGML standard. The core SGML philosophy is that documents should be defined based on their
content and not on their appearance. This has been a source of conflict because most electronic
publishers want to control the appearance of their pages.
Domain Name System (DNS):
A scheme for translating numeric Internet addresses into "user friendly" strings of word
segments denoting user names and locations. The Internet naming scheme consists of a
hierarchical sequence of names, from the most specific to the most general (left to right),
separated by dots, for example luorc.ecrc.edu . (See also: IP address)
Dot Pitch:
Dot pitch is the space between pixels. The smaller the number, the sharper the image will
appear. (.28mm is better than .32mm)
Drawing:
An engineering document or digital data file(s) that discloses (directly or by reference), by
means of graphic or textual presentations, or a combination of both, the physical and functional
requirements of an item.
DTD (Document Type Definition):
A DTD is the formal definition of the elements, structures, and rules for marking up a given type
of SGML document. You can store a DTD at the beginning of the document or externally in a
separate file.
Electronic Bulletin Board:
A shared file where users can enter information for other users to read or download. Many
bulletin boards are set up according to general topics and are accessable throughout a network.
E-Mail (Electronic Mail):
Any communications service that permits the electronic transmission and storage of messages
and attached/enclosed files.
EC (Electronic Commerce):
The end-to-end digital exchange of all information needed to conduct business. Examples
include EDI transactions, electronic mail, archives, audit trails, and all forms of records,
including graphical images. Electronic Data Interchange (EDI), Electronic Funds Transfer (EFT)
and Continuous Acquisition and Life-cycle Support (CALS).
EDI (Electronic Data Interchange):
The inter-organizational, computer-to-computer exchange of structured information in a
standard, machine-processable format.
EDIF (Electronic Design Interchange Format):
A neutral, platform independent format for the interchange of integrated circuit design data from
design to manufacturing organizations.
EDIFACT (EDI For Administration, Commerce and Transport):
United Nations rules for Electronic Data Interchange for Administration, Commerce and
Transport. They comprise a set of internationally agreed upon standards, directories and
guidelines for the electronic interchange of structured data related to trade in goods and services
between independent computerized information systems.
EFT (Electronic Funds Transfer ):
Electronic movement of data between banks which results in a value transfer between accounts.
EFT (Electronic Funds Transfer):
EFT is a technology (one of the electronic commerce technologies) that allows the transfer of
funds from the bank account of one person or organization to that of another. EFT is also used to
refer to the action of using this technology. It is an important addition in the organization that
implements EDI in their organization.
Encryption:
A method of ensuring data secrecy. The message is coded using a key available only to the
sender and the receiver. The coded message is sent to the receiver and then decoded upon
receipt.
Engineering Data:
Any technical data (whether prepared by the Government, contractor, or vendor) relating to the
specification, design, analysis, manufacture, acquisition, test, inspection or maintenance of items
or services. Engineering data is comprised of all information that contains authoritative
engineering definition or guidance on material, constituent items, equipment or systems
practices, engineering methods, and processes.
Enterprise Integration (EI):
Is the removal of organizational, process, and informational barriers to the smooth and effective
flow of material and products between the activities of an enterprise.
Enterprise:
Is a collection of organizations and people formed to create and deliver product to customers.
ERP (Enterprise Resource Planning):
ERP represents the next generation of manufacturing resource planning (MRP II) software.
ERP's usefulness and power lies beyond the present function boundaries of MRP II. Beyond the
standard functionality that is offered, other features are included, e.g., quality process operations
management, and regulatory reporting. In addition the base technology used in ERP will give
users software and hardware independence as well as an easy upgrade path. Key to ERP is the
way in which users can tailor the application.
ESnet (Energy Sciences Network):
This is a Department of Energy (DOE) system that provides the full text of select DOE
documents. Many of these documents are related to computers and information policy. It also
contains gateways to a variety of energy-related sources and downloadable public domain
software.
Expert System:
A software system with two basic components: a knowledge base and an inference engine. The
system mimics an expert's reasoning process.
FAQs (Frequently Asked Questions):
A FAQ is a list of frequently asked questions. On the Internet a FAQ may exist as a feature of an
interest groups or be a mailing list. Each FAQ addresses a specific topic with a list of questions
and their answers.
FCIM (Flexible Computer Integrated Manufacturing ):
FCIM is the integration of equipment, software, communication, human resources, and business
practices within an enterprise to rapidly manufacture, repair, and deliver items on demand with
continuous improvements in the processes. The FCIM initiative is a Joint Service and Agency
effort to establish and implement the procedures and processes needed to expand the use of
flexible manufacturing technology within the Department of Defense. The Joint Logistics
Commanders chartered the Joint Technical Coordinating Group on FCIM (JTCG-FCIM) with
the mission to coordinate participation of the Service Logistics Commands in the development
and implementation of FCIM throughout the DoD.
File Transfer Protocol (FTP):
A way of transferring files between computers. A protocol that describes file transfers between a
host and a remote computer. It is also used to program based on this protocol.
File:
A digital repository of organized information consisting of records, items or arrays, and data
elements.
Finger:
A software tool used to determine whether another user is logged on to the Internet. It can also
be used to find out a user's address.
FIPS (Federal Information Processing Standard ):
Standards published by the U.S. National Institute of Standards and Technology, after approval
by the Dept. of Commerce; used as a guideline for federal procurements.
Firewall:
A computer system that sits between the Internet and a company's LAN. It is a means of
automatically limiting what a company's computer system will pass along to outside computer
systems. It acts as an active gateway to keep non-company entities from accessing company
confidential data.
FOSI (Formatting Output Specification Instance):
A FOSI is used for formatting SGML documents. It is a separate file that contains formatting
information for each element in a document.
FTAM (File Transfer, Access and Management):
The Open Systems Interconnection standard for file transfer (i.e., the communication of an entire
file between systems), file access (i.e., the ability to remotely access one or more records in a
file) and management (e.g., the ability to create/delete, name/rename a file).
Gateway :
Used in different senses (e.g., Mail Gateway, IP Gateway), but most generally, a computer that
forwards and routes data between two or more networks of any size. See CGI.
Gopher:
A search tool that presents information in a hierarchical menu system somewhat like a table of
contents.
GOSIP (Government Open Systems Interconnection Profile):
The U.S. government's OSI protocols that address communication and inter-operation of
computer systems across government agencies; they mandate that network procurements comply
with the Open System Interconnection model.
Graphics Standard:
A technical standard describing the digital exchange format of graphics data. (CCITT Group 4
and CGM are examples).
GTIS (Government Technical Information Systems):
The collection of automated data processing systems and applications used by government
agencies and offices to enter, update, manage, retrieve, and distribute technical data from a
specific Integrated Weapon System Data Base.
HTML ( Hypertext Markup Language ):
HTML is essentially an SGML DTD for hyperlinked text with in-line graphics which serves as
the language of the Internet's World Wide Web. Documents that are formatted with proprietary
software are typically too big for efficient transmission. A 4 Kb page in plain text can double in
size with the addtion of proprietary formatting codes. A mark up language does not have this
overhead. Instead of defining precisely how the document should appear, it identifies the
important parts of a document, including text that should be emphasized. HTML codes are so
compact that they have little or no effect on the file size.

HTML provides a way to dress up documents and make them look better than email. In addition,
HTML provides tags for inserting in-line images and cross references or links. "Tags" are
embedded in the text. A tag consists of a less-than bracket, "<", a "directive", zero or more
parameters and a ">". Matched pairs of directives, like "<title>" and "</title>" are used to delimit
text which is to appear in a special place or style. Links to particular places (anchor points) in
other documents are in the form where "a", "/a" delimit an "anchor" called #H at the listed URL,
(the anchor can be given any name). "href" introduces a hypertext reference, which in this case is
a Uniform Resource Locator (URL) (the string enclosed in double quotes in the example above).
The text "ECRC Glossary" will be the label appearing on the highlighted link in the browser.

A certain place within an HTML document can be specified by following the document name
with a hash (#) and the name of an anchor at that position. In the example the target was #H. This
target must be inserted in the document using the tag <a name="#H></a>. Without the anchor
within the document, the link would be to the top of the first page of the document specified by
the URL.
HTTP (Hypertext Transfer Protoco):
The protocol developed at CERN that enables a browser ( or client) to send out a request to a
web server via the Internet.
Hypertext :
Text that is not limited to a single linear or sequential path through it. Hypertext provides the
option of non-sequential, non-hierarchical navigation through a body of information. Ted Nelson
envisioned hypertext in 1965. His two books Computer Lib and Dream Machines are available in
one volume from Microsoft press. He defines hypertext as non-sequential writing. Just as there is
good and bad sequential writing, there is good and bad hypertext. The point is to organize data in
a way that readers can easily pick the chunks they find relevant without following a sequence
dictated by the author.
Hyperbolic Space or Hyperspace:
In Klien's geometry, a space with manymore dimensions that the four we are used to (height,
width, depth, and time) Nelso asked, "What is the hyperspace of a document?" It would be all of
the concepts it contained.
ICR (Intelligent Character Recognition):
A technology that employs either software only or software and hardware to automatically
recognize and translate raster images into structured data.
IDEF0:
A functional modeling method for complex manufacturing environment which when graphically
represented show the structural relationships between the manufacturing processes.
IDEF1:
a graphical method which extends the process model by modeling the information flows and the
entity relationships. IDEF1X provides extensions to IDEF1 with different graphical
representation.
IEEE (Institute of Electrical and Electronics Engineers):
Organization of engineers, scientists and students involved in electrical, electronics, and related
fields; also functions as a publishing house and standards-making body.
IETM (Interactive Electronic Technical Manual):
An interactive, intelligent access environment for large volumes of graphical and text-based
technical information. It provides a complete electronic technical manual that is linked to text,
drawings, photographs, [video] and fault isolation procedures.
IGES (Initial Graphics Exchange Standard):
A neutral file format for the representation and transfer of product definition data among
CAD/CAM systems and application programs.
A picture, graph, diagram or other form of graphical representation contained within a technical
publication.
ILS (Integrated Logistics Support):
Encompasses the unified management of the technical logistics elements that plan and develop
the support requirements for a system. This can include hardware, software, and the provisioning
of training and maintenance resources.

Information Engineering:
A methodology for developing an integrated information system based on the sharing of
common data, with emphasis on decision-support needs as well as transaction processing
requirements. It assumes logical data representations are relatively stable, as opposed to the
frequently changing processes that use the data. Therefore, the logical data model, which reflects
an organization's rules and policies, should be the basis for systems development.
Information Infrastructure:
A structured collection of information system components and organization processes that enable
the flow of necessary information to effect enterprise integration.
Information Superhighway:
The Information Superhighway is a network that will potentially connect every government
agency, business, and citizen providing a means of rapid access to information (in digital form)
and electronic communication to every business and citizen in the country. This vision is an
unprecedented nationwide (and ultimately worldwide) electronic communications network that
will provide just about any sort of electronic communication imaginable. Your computer,
interactive TV, telephone, or other technology will enable access. The purpose of the information
superhighway is to provide an infrastructure for, among other things, electronic commerce, in a
variety of forms including electronic banking, electronic data interchange, inventory managing,
taxpaying, video conferencing, medical diagnosing, and virtually any other business activity. The
closest approximation to the Information Superhighway at this time is the Internet.
Integration:
Can be described as consisting of three main components: physical integration, the connection of
the hardware; data integration, the ready exchange of data between applications without loss of
functionality; and lastly business integration, the integration of the functions needed to support
decisions, monitor and control business.
Intelligent Gateway:
Intelligent gateway is a technology which makes the complexities of on-line database connection
and authorized interrogation transparent to users. Intelligent gateways provide transparent logos,
transfer user prompted queries into that can be read by non-standard database retrieval
programs.
Inter-operability Testing:
Inter-operability testing addresses the problem of data interchange between two vendor products
within a data system, or between two data systems.
Interactive Access:
The ability to access authorized portions of the source data maintained in contractor or
Government systems via on-line telecommunications data transfers in real or near-real time using
various types of queries.
Internet Protocol (IP):
A standard that describes how packets of data are transported across the Internet and recognized
as an incoming message.
Internet Relay Chat (IRC):
A software tool that makes it possible to hold real-time keyboard conversations on-line.
Internet:
The series of interconnected networks that includes local area, regional, and national backbone
networks. Networks in the Internet use the same telecommunications protocol (TCP/IP) and
provide electronic mail, remote login, and file transfer services. The global Internet, the world's
largest internet, includes nearly every university, government, and research facility in the world.
Since 1994, the number of commercial sites has increased exponentially to the point where, in
1996, 50% of the nodes on the Internet are commercial (.com) sites. The Internet is the closest
thing that we have the Information Superhighway. It started with four interconnected computers
in 1969 known as ARPAnet.
InterNIC:
The official source of information about the Internet. Its goal is to: 1) provide Internet
information services, 2) supervise the registration of Internet addresses, and 3) develop and
provide databases that serve as white and yellow pages to the Internet.
Intranet:
An intranet is a LAN or WAN operating under the TCP/IP and HTTP protocals but, usually for
security reasons, is not connected to the global Internet. The information on the intranet is
available only to those with network access.
IP Address:
The numeric address of a computer connected to the Internet; also called Internet address.
See domain name and TCP/IP.
IP (Internet protocol) :
The Internet standard protocol that provides a common layer over dissimilar networks, used to
move packets among host computers and through gateways if necessary.
IPDB (Integrated Product Data Base):
A common product data base enables changes and modifications available to users
simultaneously.
IRDS (Information Resources Dictionary System):
IRDS is a standard, not a system. It specifies services performed by a data administrator in
cataloguing, documenting, managing, and using data dictionaries. It is based on the entity-
relationship model, and allows attributes on relationships.
IRQ:
Interrupt request, used to get the attention of the system to perform a task.
ISDN (Integrated Services Digital Network):
The technical standards and design philosophy according to which digital networks will be
designed. ISDN provides high-speed, high-bandwidth channels to every subscriber on the
network, achieving end-to-end digital functions with standard equipment interface devices. The
networks will enable a variety of mixed digital transmission services to be accommodated at a
single interface (including voice and circuit and packet switched data).
ISO (International Standards Organization):
A voluntary, non-treaty organization established in 1949 to promote international standards.
ISO (International Standards Organization):
ISO is the international standards organizations that is similar in function to ANSI. They do not
create standards but as with ANSI the provided a means of verifying that a proposed standard has
met certain requirements for due process, consensus, and other criteria by those developing the
standard. After this verification the standard is approved as an international standards by ISO.
ISO 9000:
SO 9000 is a series of international standards that provides quality management guidance and
identifies quality system elements that are necessary for quality assurance. In other words, the
ISO 9000 series standards have two main roles: to provide guidance for suppliers of all types of
products that wish to implement effective quality systems (or improve existing ones); and to
provide the generic requirements against which that quality system can be evaluated.
ISO/OSI (International Standards Organization/Open System Interconnection):
A standard, modular approach to network design that divides the required set of complex
functions into manageable, self- contained, functional layers.
IWSDB (Integrated Weapon Systems Database):
A physically distributed, logically linked data structure for the total collection of shared product
definition and support data for one or more defense systems.
JCALS (Joint Computer-Aided Acquisition and Logistic Support):
The JCALS program is the Department of Defense's lead system for implementation of CALS.
The functionality of JCALS will provide automation of technical manuals and other maintenance
documents. Fairfax CALS Shared Resource Center, 1994.
JCMO (Joint CALS Management Office):
The JCMO was established as a joint (multi) military organization comprised of Army, Navy,
Air Force, Marine Corps and Defense Logistics Agency (DLA) in order to implement common
(joint) CALS solutions. The JCMO developed the DoD CALS Architecture released in June
1991.
JEDMICS (Joint Engineering Data Management Information and Computer System):
The standard DoD program for management of engineering drawings and related technical data.
It automates the DoD's engineering data repositories using an integrated suite of off-the-shelf
hardware and software. This system enables improved acquisition, storage, update, and retrieval
of technical information. Plans call for installation of JEDMICS at 25 sites by Fiscal Year 1995.
JIT (Just-In-Time) Inventory:
A method of controlling and reducing direct and work-in-process inventory by having suppliers
deliver material "just in time" to manufacturing. [ed. May also be applied to other areas such as
"just in time training" offered by IETMs]
JPEG (Joint Photographic Experts Group):
A widely accepted, international standard for compression of color images. * Included with the
permission of: Gartner Group, Inc.
K
Kilobit and Kilobyte:
A kilobit is 1000 bits. A byte usually equals 8 bits. Thus, a Kilobyte=8000bits. The former is
generally used to indicate the speed of transmission (kbps or kb/s). The second along with Mb is
typically used to as a measure of storage capacity.
LAN ( Local Area Network ):
A user-owned and operated data transmission facility connecting a number of communicating
devices (e.g. computers, terminals, word processors, printers, and mass storage units) within a
single building or campus of buildings.
Layer:
In the Open System Interconnection reference model, refers to a collection of related network-
processing functions that constitute one level of a hierarchy of functions.
LCC (Life-Cycle-Cost):
Refers to the total cost of a product over the full life of the product. The cost includes design,
development, production, and support.
LDM (Legacy Data Management):
The process of identifying and evaluating historical information and defining potential solutions
and requirements for long-term usage of that data in a cost effective manner.
Lead Time:
A span of time required to perform an activity. In a production and inventory control context, the
activity is normally the procurement of materials or product from either an outside supplier or a
company's own manufacturing facility. The individual components of any given lead time can
include some or all of the following: order preparation time, queue time, move or transportation
time, receiving and inspection time.
Legacy Data:
Existing data that has been acquired by an organization.
LOA (Letter Of Agreement):
A document executed between two or more parties outlining specific agreements relating to the
accomplishment of an action.
Logistics:
Logistics is the science of planning and implementing the acquisition and use of the resources
necessary to sustain the operation of a system.
LSA (Logistics Support Analysis):
A modeling process used to recognize the maintenance, training and the number of people that
are required to get the system running and to maintain the system.
LSAR (Logistics Support Analysis Record):
That portion of LSA documentation consisting of detailed data pertaining to the identification of
logistic support resource requirements of a system or equipment.
Magnetic Tape:
Magnetic tape is the preferred physical medium for delivery of technical data in digital form
because it is a mature, stable technology that is able to handle the large volumes of data typically
involved in a major weapon system acquisition.
Mailing List:
A BBS (see the definition of BBS) like server that acts like a giant message router. All messages
sent to the mailing list are automatically sent to all members of the mailing list.
Maintainability:
The measure of the ability of an item to be retained in or restored to specified condition when
maintenance is performed by personnel having specified skill levels, using prescribed procedures
and resources, at each prescribed level of maintenance and repair.
MANTECH (Manufacturing Technology):
This DoD program may provide a source of viable technology transfer for program specific
CALS initiatives. The MANTECH program was established to help develop and improve
manufacturing processes, techniques and equipment to provide timely reliable and economical
production in DoD.
MAP (Manufacturing Automation Protocol):
A largely moribund communication standard proposed by General Motors in 1986 that ideally
would have enabled system devices within a manufacturing company to communicate among
themselves.
Markup:
Tags that are added to the data of a document in order to convey information about it.
MIL-HDBK (Military Handbook): A document published by the Military Defense Department
as a guide for implementing various programs.

MIL-HDBK-59 (Military Handbook 59):

The "DoD CALS Program Implementation Guide," is not a standard. It provides the acquisition
manager and his staff, as well as defense contractors and government end users with a detailed
explanation of the CALS program, its objectives and strategy, and how to develop and apply
CALS requirements that meet the needs of a particular weapon system development program.
The current version is `B`.
MIL-SPEC (Military Specification):
A Specification used to specify requirements when designing or producing a product for the
Department of Defense.
MODEM (MOdulator-DEModulator):
A device that converts digital signals from a computer to analog signals for transmission over
phone lines.
Mosaic:
Windows-like product for exploring the Internet that is available free in Cyberspace,
CompuServe, America On-line, and many bulletin boards. Mosaic was developed by the
National Center for Supercomputing Applications at University of Illinois and was funded with
tax dollars.
Motif:
Graphical user interface specified by the Open Software Foundation and built on the
Massachusetts Institute of Technology's X Windows.
MPEG (Motion Pictures Experts Group):
An emerging standard for compression of full motion images driven by the same committee as
the Joint Photographic Experts Group (JPEG) standard.
MRP (Material Requirements Planning):
Original manufacturing business software that focused only on planning the manufacturing
materials and inventories and did not integrate planning for other resources, such as people and
machine capacity.
Multimedia:
Used essentially to define applications and technologies that manipulate text, data, images and
voice full motion video objects. Typically associated with PCs, but increasingly associated with
networked-based applications.
National Information Infrastructure (NII):
A concept conceived by the Clinton Administration and an alliance of computer, software, cable,
and phone companies. The proposed concept would be the electronic network of tomorrow and
would use phone line, cable systems, and high-speed data-networks to link everyone, including
government agencies, universities, company presidents, and private citizens. The concept
envisions vast amounts of services, entertainment, and information being made readily available
through computers, televisions, telephones, and other means of electronic communication.
National Research and Education Network (NREN):
The High-Performance Computing and Communications Act of 1991 (sponsored by Vice-
President Gore) was a bill that created the NREN. NREN will use the Internet to provide
information resource connection not only to universities, research centers and government
agencies, but also to secondary and elementary schools. The bill provides $2.9 billion over a five
year period towards the NREN. The High-Performance Computing and High Speed Networking
Applications Act of 1993, sponsored by Rep. Richard Bouche, expands the Gore bill to also
include access to health care facilities and and schools at all levels.
Network Driver Interface Specification (NDIS):
A Microsoft specification for a type of device driver that allows multiple transport protocols to
run on one network card simultaneously.
Network News Transport Protocol (NNTP):
An extension of the TCP/IP protocol that describes how newsgroup messages are transported
between compatible servers.
Newsgroup:
A BBS-like forum or conference area where you can post messages on a specified topic. Many
newsgroups covering a wide range of topics exist on the Internet.
NIST (National Institute of Standards and Technology):
Created in 1901 as the National Bureau of Standards and renamed in 1988, the National Institute
of Standards and Technology (NIST) works to strengthen U.S. industry's international
competitiveness, advance science, and improve public health, safety and the environment. NIST
conducts science and engineering research in commercially important fields such as advanced
materials, information systems, biotechnology, optoelectronics, computer-integrated
manufacturing, and sensor technology.
Node:
A Node is a termination point for two or more communication links. The Node serves as the
control location for forwarding data among the elements of a network or multiple networks, as
well as perform other networking, and in some cases, local processing functions. In systems
network architecture, a node is an end point of a link or a junction common to two or more links
in a network. Nodes can be host processors, communications controllers, cluster controllers,
work group computers or terminals.
OCR (Optical Character Recognition):
The ability of a computer to recognize written characters through some optical-sensing device
and pattern recognition software.
ODA/ODIF (Office Document Architecture / Office Document Interchange Format):
An explicit document architecture and interchange format standard which allows exchange of
compound documents (i.e., documents composed of various content types, such as character,
raster graphics, and geometric (Computer) graphics content.
Open Data-link Interface (ODI):
A standard interface, developed by Novell and Apple, that performs the same functions as NDIS.
Open System:
A system capable of communicating with other open systems by virtue of implementing
common international standard protocols.
OSI (Open Systems Interconnection):
A standard approach to network design developed by the International Standards Organization
that introduces modularity by dividing the complex set of functions into more manageable, self-
contained, functional slices.
Optical Disk:
An unalterable optical storage medium that allows large amounts of data to be permanently
written to it. An optical disk is read using laser and magnetic technology and has a useful life
span of 100 plus years.
Packet Internet Gopher (PING)A TCP/IP utility that sends packets of information to a
computer on a network. It can be used to determine if a computer is connected to the Internet.
Parser:
The word "parse" comes from "parts of speech" in Latin. It means to part or break down into
component parts. A parser is a specialized software program that recognizes SGML and markup
in a document. A parser that reads a DTD and checks and reports on markup errors is a
validating SGML parser. A parser can be built into an SGML editor to prevent incorrect tagging
and to check whether a document contains all the required elements.
PDES/STEP (Product Data Exchange Standard/Standard for the Exchange of Product
Model Data):
A set of standards under development for communicating a complete product model with
sufficient information content that advanced CAD/CAM applications can interpret. PDES is
under development as a national (U.S.) standard and STEP is under development as its
international counterpart.
PDF (Portable Document Format):
A file format created with Adobe Acrobat which ensures that the document looks the same on
any computer equipped with a free Acrobat reader. PDF Writer lets you direct print output from
a word processing or page layout pgoram to a PDF file instead of a printer. Using it is as easy as
printing. Acrobat Exchange allows you to modify PDF documents by adding hypertext links,
text, annotations, and security restrictions.
PDL (Page-Description Language):
Software that instructs a printer in composing various elements (e.g., text, graphics, images) of a
printed page. [Ed. or Standard Page Description Language: ISO 10180, Information Processing
Text Composition], 1993.
One of the most popular PDLs is PostScript. PostSript documents can be printed at very high
resolutions (600 dpi to 1200 dpi or more) depending on the capability of your printer.
PLDB (Parts List Data Base):
This tool controls parts inventory during fabrication and operation. PLDB provides inventory
status of parts, prepares part list reports, generates purchase orders, and tracks cost/budget of
parts. PLDB is linked to LSAR, Imaging, and Bar Coding.
POSIX (Portable Operating System Interface):
This standard defines a C programming language source interface to an operating system
environment. This standard is used by computing professionals involved in system and
application software development and implementation.
POTS:
Plain old telephone service. An unenhanced voice quality connection.
PREMO:
A proposed international standard that specifies techniques for creating audiovisual interactive
applications that recognize and emphasize the interrelationships among user interfaces,
multimedia applications, and multimedia information interchange. PREMO includes interfaces
for external storage, retrieval, and interchange of multimedia objects. The objective of PREMO
is to consider the needs of the computer graphics community in the mid-1990s, including new
application areas.
Processable Data Document:
Technical data in digital source form that is either organized and formatted so that an automated
data processing system can further structure or restructure the data in a variety of ways, or is
compatible for direct processing by an automated design, engineering, or logistic support system.
Processable data can be updated or transformed for other applications such as production of
document images.
Product Data:
All engineering data, in processable form, necessary to define the geometry, the function, and the
behavior of an item over its entire life span, including logistic elements for quality, reliability,
maintainability, topology, relationship, tolerances, attributes, and features necessary to define the
item completely for the purpose of design, analysis, manufacture, test, and inspection.
Product Model:
A data model that contains the functions and physical characteristics of each unit of a product
throughout its complete life cycle (from requirements specification to disposal).
Propriety Standard (Defacto Standard):
A standard which has been endorsed by industry or government as the accepted international
standard, but not officially approved by an accredited standards body such as ISO.
Protocol:
A set of procedures for establishing and controlling data transmission. Examples include IBM's
BSC (Binary Synchronous Communications) and SDLC (Synchronous Data Link Control)
protocols.
Protocol:
A set of rules (priorities) and exception handlers for managing the communications on a
network. A set of rules or standards that describes ways to operate to achieve compatibility.
Alternatively, A mutually determined set of formats and procedures governing the exchange of
information between systems.
Query Language:
A defined set of syntax and commands used to submit queries to a text retrieval system.
RAMP (Rapid Acquisition of Manufactured Parts):
The Navy's RAMP program will enhance logistic support by applying data-driven automated
manufacturing, acquisition, and inventory management technologies to produce small lots of
selected, hard-to-acquire parts and assemblies at reduced cost and significantly shortened lead
times.
Random-Access Memory (RAM):
Thought of as temporary memory because when the computer is turned off, all data stored in
RAM is lost. To run a computer software application, it must be loaded into RAM. All computer
programs (software) have a minimum RAM requirement.
Rapid Response Manufacturing (RRM):
One of the major objectives of RRM is to create an engineering information environment that is
accessible and useful for multiple engineering and manufacturing applications. Accepted robust
standards for process and product data storage and exchange, which commercial vendors actively
support, are a necessary ingredient of the infrastructure being developed within the RRM
program. RRM views the continuing development and access of STEP as crucial.
Raster Graphics:
A method of representing a two-dimensional image by dividing it into a rectangular two-
dimensional array of picture elements (pels), achieved by scanning.
RDA (Remote Data Access):
A standard being developed to interconnect applications and databases. The standard originally
attempted to cover any kind of data access and concerned itself only with effective dialogue
management, but the complexity of so broad a scope has focused it more on Structured Query
Language (SQL). An SQL specialization draft based on SQL2 is being developed as the first
potential implementation of RDA.
RDBMS (Relational Database Management System):
A database management system in which the database is organized and accessed according to the
relationships between data items. In a relational database, relationships between data items are
expressed by means of tables. Interdependencies among these tables are expressed by data values
rather than by pointers. This allows a high degree of data independence.
Real-Time:
The description for an operating system that responds to an external event within a short and
predictable time frame. Unlike a batch or time-sharing operating system, a real-time operating
system provides services or control to independent ongoing physical processes.
Relational Database:
A database system in which the database is organized and accessed according to the relationships
between data items without the need for any consideration of physical orientation and
relationship. Relationships between data items are expressed by means of tables.
Reliability:
The duration or probability of failure-free performance under stated conditions; or the probability
that an item can perform its intended function for a specified interval under stated conditions.
Repository:
A facility for storing descriptions and behaviors of objects in an enterprise, including
requirements, policies, processes, data, software libraries, projects, platforms and personnel, with
the potential of supporting both software development and operations management. A single
point of definition for all system resources.
Resolution:
The clarity of a monitor screen. Resolution is expressed in pixels. The more pixels there are, the
higher the resolution.
A document issued by the government to request bids for products or services.
RFQ (Request For Quote):
Request For Quote is a request issued by a contracting agency to industry for quotes (proposal)
in support of goods or services.
ROM (Read-Only Memory):
A type of computer storage that is not available to the user for writing. That is, the user of ROM
can access and use data which is stored in ROM, but can not change the data. Computer CDs use
ROM. Once data is placed in ROM it remains and can not be altered in any way by the user.
Router:
Hardware/software solution that directs messages between LANs.
Search Engine, Tool, Utility:
A remotely accessible program that lets you do keyword searches for information on the Internet.
The search engine is a server program and should not be confused with the browser or other
programs that run on your desktop PC. There are a number of search utilities for the WWW
(Yahoo, Lycos, etc.). The other Internet services typically have one search tool: ( FTP--Archie,
Gopher--Veronica,...)There are several types of search engine; the search may cover titles of
documents, URLs, headers, or the full text.
Serial Line IP/Point-to-Point Protocol (SLIP/PPP):Two protocols that allow dial-up access to
the Internet through a serial link. Most Internet access packages support both, through you can
use only one at a time.
SGML (Standard Generalized Markup Language):
A markup language uses tags to indicate changes within a document, changes in presentation
style, or changes in content type. Generalized means that the markup used to describe a
document is based on the content of that document, not on its appearance. Standard means that
the language has gone through the international standards process. The SGML standard,
approved in 1986, defines a language for document representation which formalizes markup and
frees it of system and processing dependencies. It provides a coherent and unambiguous syntax
for describing whatever a user chooses to identify within a document.

SGML is a metalanguage, a way of talking about (and testing or validating) lower level
languages. In the case of SGML it might be a way of talking about elements and tags used
in DTDs (document type definitions). To apply SGML, one first defines a document type. The
definition would tag all the page elements that would deserve special considerations. Bracketed
tags mark the beginning and end of each element. HTML 3.0 is an SGML DTD.
Simple Mail Transfer Protocol (SMTP):
A protocol that describes how information is passed between reporting devices and data
collection programs. It can be used to gather information about hosts on the Internet.
Source System:
The computer hardware, software, and network that will structure technical information for
interchange.
SQL (Structured Query Language):
SQL is a relational data language that provides a consistent, English keyword-oriented set of
facilities for query, data definition, data manipulation and data control. It is a programming
interface to a relational database management system (RDBMS).
Standards Testing:
Determines whether the national, international, or military standards (and specifications) are
viable and implementable.
STEP (Standard for the Exchange of Product model data):
A standard under development which will be used to describe a product in a neutral format over
its complete life-cycle in a hardware-independent way. Source: Department of Trade and
Industry, United Kingdom. "CALS: Computer Aided Acquisition and Logistic Support: The
Executive Guide. "
System:
Specific suite of computer hardware and software. As used in the terms "Source System" and
"Destination System," the term does not necessarily correspond one to one with "site" or "base"
in that most prime contractor sites and DoD installations have more than one system.
Tape Set:
A group of one or more magnetic tapes which collectively represent the collection of related files
comprising a specific delivery of a document or documents.
TBITS (Treasury Board Information Technology Standards):
Treasury Board Information Technology Standards are the official Government of Canada
publications on the standards, guidelines, technical reports and standard operating practices
adopted and promulgated under the Treasury Board Information Management policies.
TDP (Technical Data Package):
A technical description that is adequate to support acquisition of an item, including engineering
and production, the description consisting of all applicable technical data such as engineering
drawings, associated lists, product and process specifications and standards, performance
requirements, quality assurance provisions, and packaging details.
Technical Data:
Recorded information, regardless of form or method of the recording of a scientific or technical
nature (including software documentation). The term does not include computer software or data
incidental to contract administration, such as financial and/or management information.
Technical Information Systems:
The generic term for the enterprise network of existing and augmented automated data
processing systems used by government and contractors for management of technical
information in support of the design, manufacture, and logistic processes for products such as
weapon systems and related major equipment items.
Telnet:
A terminal emulation protocol that allows remote log in from any computer on an internet. Once
logged on you can retrieve files from or send files to that remote computer. (2) A portion of the
TCP/IP suite of software protocols that handles terminals. Among other functions, it allows a
user to log in to a remote computer from the user's local computer.
Text File:
A file which uses the American Standard Code for Information Interchange (ASCII) or similar
system to represent the text of a document. Data within a text file are delineated as human
readable words, sentences, and paragraphs rather than data elements.
Text-Graphics Integration:
The necessary indexing and linkages between a computer readable text file and a separate
computer readable graphics file, or graphics subsection of the same text file, such that both
portions can be output or updated as a single, apparently continuous, unit.
TIFF (Tag Image File Format):
a de facto standard format for image files. The standard used by all FAX machines.
Total Quality Management (TQM) :
Interfunctional approach to quality management, developed by Joseph Juran, involving
marketing, engineering, manufacturing, purchasing, etc. Defects should be defined through
examining customer expectations. The focus is on prevention, detection, and elimination of
sources of defects. The Juran total quality management trilogy is quality control, quality
planning, and quality projects.
Transmission Control Protocol/Internet Protocol (TCP/IP):
A compilation of network and transport level protocols that allow a PC to speak the same
language as other PCs on the Internet or other networks.
Unix:
A family of operating systems known for its relative hardware independence and portable
applications interface.
Usenet (User Network):
A public network made up of thousands of newsgroups and organized by topic.
VAN (Value-Added Network) :A system where a network leases communication lines from a
communications common carrier, enhances them by adding improvements such as error
detection and/or faster response time, and then allows others to use this service on those lines for
a fee.
Vector Graphics:
The presentation of images stored as line segments or other mathematical representations.
Very Easy Rodent-Oriented Netwide Index to Computerized Archives (Veronica):
A search tool (like archie) that searches text that appears in Gopher menus.
WAN (Wide-Area Network):
A data transmission facility that connects geographically dispersed sites using long-haul
networking facilities.
Web Browser:
(see client software, browser)A World Wide Web client. PC Software such as Netscape
Navitagor or NSCA Mosaic that serves as an information retrieval tool. The browser locates the
web site specified in a URL, transfers the specified file, and interprets the HTML code.
WHOIS:
A TCP/IP utility that lets you query compatible servers for detailed information about other
Internet users.
Wide Area Information Server (WAIS):
Software that is used to index large text files in servers. On the client side, it finds and retrieves
documents in databases, based on user-defined keywords. WAIS indexes can be searched for
everything from government documents and treaties to documents about obscure religious sects.
Workflow Management:
A software application that controls the order and monitors the execution of a series of processes
(worksteps) in which people act upon work items (documents, forms, folders and images).
Workflow:
The automation of work among users where the system is intelligent enough to act based on
definition of work types, users, tasks and the recognition of dynamic processing conditions.
World Wide Web (WWW):
A network of servers that uses hypertext links to find and access files. Many Web sites also
support video and sound.
X 12:
ANSI X12 Ver. 3050 transaction sets can be described in six pages of 3 digit codes. The X12
format standard is commonly used in EDI (automated computer to computer data exchange).
Purchasing transaction sets include 840s RFQs, 850s Purchase Orders, 855s PO
Acknowledgements. Financial transaction sets include 810s Invoices.
X.25:
A data communication protocol that ensures data integrity while data is being transmitted to,
from and within the network. This standard defines the interconnection of packet-switching
networks and their associated computers or terminals. These types of networks make efficient
use of the telecommunications networks by taking the data generated by a computer or a remote
terminal and chopping it up into small identified packets and then looking for the most efficient
way of sending this information to its destination.
X.400:
Defines the special rules for transmission of a message which may include text, pictures, and
graphics, and allows information to be transmitted between computers, without specific
manufacturer restrictions.
X.500: The establishment of any global interconnected network, requires a directory. The
standard for establishing such a directory is X.500, which enables users to browse through user
listings as though they were looking through a telephone book.
2.6. Check Your Progress

1. What is mean by B2C

2. What is mean by G2G
3. What is the role of E-Commerce in the field of Education

2.7. References:

• Din LI: The Basic of E-commerce, the publishing house of capital economic
• transaction university
• Yuansheng LIU: E-commerce and Its Influence on The Finance, the learned journal of
• Ha’er Bin Financial Higher Training School
• Laichun CHAO, Professor, Tutor of MA students, the financial and economic school
• head master of HANGZHOU INSTITUTE OF ELECTRONIC ENGINEERING

2.8 ANSWER TO CHECK YOUR PROGRESS

1.- Read 2.1.

2.- Read 2.1
3.- Read 2.2.
 Unit 3:
Content

3.1. Electronic Commerce Frame work

3.2. Anatomy of E-Commerce applications,
3.3. E-Commerce Consumer applications,
3.4.E-Commerce organization applications
3.5.Summary
3.6.Glossary
3.7.Check Your Progress
3.8.Reference
3.9.Answer to Check your progress

3.1: Electronic Commerce Frame work

I Purpose
1. This reference framework provides a guide for:
a. Helping ASEAN member states that do not have any e-commerce laws in place to accelerate
the timeline to draft their own;
b. Helping ASEAN member states that already have e-commerce laws in place to facilitate cross-
border e-commerce and the cross recognition/cross-certification of digital
certificates/digital signatures.
2. This reference framework is developed based on the following ecommerce laws of ASEAN
member states, and in consultation with the legal experts from the governments of these
member states:
a. Electronic Transactions Act (ETA) of Singapore
b. Digital Signature Act (DSA) of Malaysia
c. Electronic Commerce Act (ECA) of Philippines
d. Electronic Transactions Order (ETO) of Brunei
e. Draft Electronic Transactions Bill (ETB) of Thailand
3. These e-commerce laws are in turn based largely on UNCITRAL’s
1 Model Law on Electronic Commerce and Draft Model Law on Electronic Signatures, as well
as the e-commerce and electronic signature laws of the US (e.g. Utah, Illinois) and Europe (e.g.
Germany).
II Basic Concepts and Definitions E-commerce
4. e-Commerce as used in the context of this reference framework refers to electronic
transactions on the Internet or any other open networks. Such transactions can be divided
into two categories:
a. Those that involve the sale of physical goods and services;
b. Those that involve the direct, on-line transfer of information and digital goods and services
(e.g. software, music-on-demand, video-on demand).
5. In the first category, the Internet or any other open network is used as the medium for order
placement, acceptance and even payment, but the delivery of goods and services to the consumer
is via the traditional physical mode.
6. In the second category, the Internet or any other open network is used as the medium of
communication as well as the medium of exchange.
7. Because e-commerce takes place on the Internet or any other open network in a ‘face-less’
manner (i.e. the buyer and seller do not see each other face-to-face), it is necessary to have e-
commerce laws to protect both the merchant and the customer.
Electronic Contracting
8. In law, a contract is said to come into being when an offer is accepted in unequivocal terms
and with an intention to create legal relations. The contract must be supported by
consideration, very often the price of the product or service purchased. In addition, the
contracting parties must have legal capacity to enter into the contract that has sufficiently
certain terms and conditions.
9. When a person makes an offer, he is expressing a desire to enter into a contract on the
understanding that if the other party accepts his offer, there will be a binding agreement
between the parties.
10. If an offer is to be accepted, the unequivocal acceptance of that offer must be communicated
to the person who made that offer.
11. An offer can be revoked at any time before it is accepted (or deemed to be accepted). It can
also lapse after a specified time (or a reasonable time, if unspecified) or on the occurrence of a
specified event.
12. In electronic contracting, the offer and acceptance are communicated electronically.
Electronic Record
13. According to UNCITRAL’s definition, an electronic record refers to “information generated,
sent, received or stored by electronic, optical or similar means including, but not limited to,
electronic data interchange (EDI), electronic mail, telegram, telex or telecopy”.
Electronic Signature / Digital Signature
14. UNCITRAL defines an electronic signature as “data in electronic form affixed to, or
logically associated with, a data message, which may be used to identify the signatory in relation
to the data message and indicate the signatory’s approval of the information contained in the data
message”.
15. A digital signature, on the other hand, is an “electronic signature consisting of a
transformation of an electronic record using an asymmetric cryptosystem and a hash function
such that a person having the initial untransformed electronic record and the signer’s public key
can accurately determine (a) whether the transformation was created using the private key that
corresponds to the signer’s public key; and (b) whether the initial electronic record has been
altered since the transformation was made”. A digital signature is thus more secure and tamper-
proof than an electronic signature. Public Key Infrastructure (PKI)
16. A public key infrastructure makes use of a cryptography system in which messages
encrypted with one key can only be decrypted with a second key. The PKI gets its name from the
concept that the user will make one key known to the public (‘public key’) but keep the other one
secret (‘private key’). The public can use the public key to send messages that only the private
key owner can read. The private key can be used to send messages that could only have been
sent by the private key owner.
17. The PKI also allows the user to create a digital signature which is unique to the private key
and the length and contents of the message being sent. Anyone who has the user’s public key can
then verify the integrity of the signature and thus ascertain whether the message sent has been
tampered with. Digital Certificate and Certification Authority
18. Due to the ‘face-less’ nature of electronic communications, there is no independent means to
verify that a message sent is really from the person alleged or from an impostor. A trusted third
party, in the form of a certification authority (CA), is required to attest that a person issuing a
digital signature may be presumed to be who he says he is. The CA is charged with issuing
digital certificates to users. A digital certificate, which is stored on a smart card, functions like a
secure electronic identification card. The digital certificate, which contains the user’s identity,
public and private keys, purpose and scope of usage of the keys, can be used to generate the
user’s unique digital signatures

3.2. Anatomy of E-Commerce applications

Business Models for Internet based E-Commerce: An Anatomy The growth of Internet based
businesses, popularly known as dot coms is anything but meteoric. It has dwarfed the historical
growth patterns of other sectors of the industry. Over years, several organizations doing business
through the Internet have come outwith their own set of unique propositions to succeed in the
business. For instanceAmazon.com demonstrated how it is possible to "dis-intermediate" the
supply chain and create new value out of it. Companies such as Hotmail and Netscape made
business sense out of providing free products and services. On the other hand companies such as
AOL and Yahoo identified new revenue streams for their businesses. It is increasingly becoming
clearer that the propositions that these organizations employed in their business could
collectively form the building blocks of a business model for an Internet based business

1 Several variations of these early .initiatives as well as

some new ones being innovated by recent Internet ventures
have underscored the need for some theory building in this
area. A good theory is a statement of relations among
concepts with in a set of assumptions and constraints. The
purpose of theory is two fold
2: to organize (parsimoniously) and to communicate
(clearly). Wallace
3 outlined a systematic approach to theory building, which
broadly consists of observation, induction and deduction.
Theory building in a new area often begins with individual observations that are highly specific
and essentially unique items of information. By careful measurement, sample summarization and
parameter estimation, it is possible to synthesize empirical generalizations. The next stage in
theory building involves concept formation, proposition formation and proposition arrangement.
Using sampling the hypothesis that occasioned the construction of the proposition could be
tested. Eventually, the results of hypothesis testing enable confirmation, modification or rejection
of the theory. In this paper we focus on observation and induction aspects of theory building.
Another key aspect of theory building is the use of alternative classification schemes often
employing typologies and taxonomies
4. Typological classification has a twofold function: codification and prediction. A typology
creates order out of the .potential chaos of discrete and heterogeneous observations. But in so
codifying thephenomena, it also permits the observer to seek and predict relationship between
phenomena that do not seem to be connected in any obvious way. This is because agood
typology is not a collection of undifferentiated entities but is composed of acluster of traits,
which in reality hang together. Indeed systematic classification andthe explication of rationale
for classification are tantamount to the codification of theexisting state of knowledge in a
discipline

5. This paper is an effort on the theory building process that incorporates several of theabove
features such as observation, induction and classification. We particularlyidentify and focus on
two broad issues concerning organization engaging in Internetbased business: Is there a basis on
which one can classify these new propositions? andare there any factors that could potentially
influence an organization in identifying anappropriate sub-set of these propositions for its
business? We propose to address these issues in this paper. Barua et al.
6 . proposed a four-layer framework for measuring the size of the Interneteconomy as a whole.
The Internet infrastructure layer addresses the issue ofbackbone infrastructure required for
conducting business via the net. Expectedly, it is largely made up of telecommunication
companies and other hardware manufacturers such as computer and networking equipment. The
Internet applications layer providessupport systems for the Internet economy through a variety of
software applications that enable organizations to commercially exploit the backbone
infrastructure. Over years, several applications addressing a range of issues from web page
design to providing security and trust in conducting various business transactions over the
nethave been developed. The Internet intermediary layer includes a host of companiesthat
participate in the market making process in several ways. Finally, the Internetcommerce layer
covers companies that conduct business in an overall ambience provided by the other three
layers. We refer to their paper for more details on the fourlayers and the type of organizations
included in the four layers.
The Internet infrastructure layer and the applications layer play a crucial role inmoderating and
trend setting the growth of Internet economy. However, in this paper,we draw our attention to the
notion of a business model as applicable to the last twolayers. The focus on the last two layers
stems from several reasons:
(a) The growth of the intermediary and the commerce layer is significantly higher
than that of the other two layers. Barua and Whinston
7. reported a 127% growth inthe commerce layer during the first quarter of 1999 over the
corresponding periodin 1998. Furthermore, one in three of 3400 companies that they studied did
noteven exist before 1996. They also reported that 2000 new secure sites are added tothe web
every month indicating the creation of new companies and migration ofexisting brick and mortar
businesses (b) The extensive customer interaction in these two layers has offered more scope for
creating unconventional business models and hence offers more scope foridentifying certain
typologiesMoreover there has been no attempt to provide a consistent definition for a business
model in the Internet context. On the other hand, consultants and practitioners haveoften resorted
to using the term business model to describe a unique aspect of aparticular Internet business
venture. This has resulted in considerable confusion.Before we elaborate on the theme, we
clarify the scope of the term "Internet based Ecommerce". Our definition of this term does not
include organizations that havemerely set up some web sites displaying information on the
products that they sell inthe physical world. On the other hand, only those organizations that
conductcommercial transactions with their business partners and buyers over the net (either
exclusively or in addition to their brick and mortar operations) are considered.Henceforth, our
reference to the term "Internet Economy" is limited by the scope aswe have identified here.
Our purpose extends beyond providing a formal definition and an anatomy to thebusiness model.
We use the proposed framework to relate to the market structure inthe Internet economy. We
begin with a broad classification of emerging marketstructures in Internet based business. We
provide a definition for a business modeland elaborate on the idea by identifying its various
facets in the context of Internet.Finally, we identify certain dimensions that could potentially
influence organizationsin their choice of an appropriate business model out of the building
blocks that wehave identified. The emerging market structure
The Internet economy has divided the overall market space into three broadstructures: Portals,
Market Makers, and Product/Service providers. A portal (POR)
engages primarily in building a community of consumers of information aboutproducts and
services. Increasingly, portals emerge as the focal points for influencingthe channel traffic into
web sites managed by Product/Service providers and otherintermediaries. They primarily play
the role of funneling customer attention or"eyeballs" into these web sites in a targeted fashion.
Companies such as AOL andYahoo largely cater to the Business to Customer (B2C) segment.
However, it is notuncommon to find portals in the Business to Business (B2B) segment also
8. Ariba.com and MarketSite.net (promoted by Commerce One) are portals serving B2B
segment.Market Maker

9. (MMK) is another emerging structure in the Internet market space. Amarket maker plays a
similar role of a portal in building a community of customersand/or a community of suppliers of
products and services. However, it differs fromportals in several ways. Firstly, market makers
invariably participate in a variety ofways to facilitate the business transaction that takes place
between the buyer and thesupplier. Consequently, often a market maker is expected to have a
high degree ofdomain knowledge. For instance, a portal such as Yahoo can funnel the traffic of
Prospective computer and software buyers into web sites that provide services relatedto selling
these. However, a market maker such as Beyond.com require a higherdomain knowledge related
to buying and selling of computer and software products toadd value to the business. Lastly,
unlike a portal, a market maker endeavors toprovide value to suppliers and customers through a
system of implicit or explicit guarantee of security and trust in the business transaction. Auction
sites such as e-bayare the early market makers in the B2C segment. On the other hand a large
number ofmarket makers are evolving in the B2B segment. Some examples include Chemdex
(Chemicals), HoustonStreet.com (Electricity), FastParts (Electronic components),BizBuyer.com
(small business products) and Arbinet (Telecommunication minutesand bandwidth).

B2B segment has several characteristics that promote a bigger role for market makers.These
include huge financial transactions, greater scope for reducing product searchcosts and
transaction costs. Since B2B e-commerce application is poised for aspectacular growth, the role
of market makers will be increasingly felt. There will bewide scope for catering to either a
vertical or a horizontal market hub. Thepredominant forms the market makers take in B2B
segment include organizingauctions and reverse auctions, setting up exchanges and product and
service catalogueaggregation.

The third market structure will comprise the product/service providers (PSP) dealingdirectly with
their customers when it ultimately comes to the business transaction.

The suppliers will conduct their business with their partners directly over the net. Thiswill call
for extensive customization of their information system and businessprocesses to accommodate
customer requirements on line. Notable examples in thiscategory of market structure include
companies such as Amazon.com andLandsend.com in the B2C segment and companies such as
Cisco and Dell Computersin the B2Bsegment.

The emerging market structure indicates a few characteristics of the Internet based ecommerce
business applications. Firstly, each of these addresses a key constituent of the business that is
carried out over the net. Secondly, the three market structures existin both B2B and B2C
segment. Thus they cover the whole gamut of the Interneteconomy. Table 1 is a representative
list of companies in the emerging marketstructure in B2C and B2B segments. Furthermore, there
is a high level of overlap andinter-dependency among the players in the three market structures.
For instanceplayers in the PSP market will succeed in marketing their products and services only
when they catch the attention of prospective customers outside their web site. In orderto do
thisthey may often need the support of a POR. As we know, the revenue streamof a POR or a
MMK depends to a large extent on its relationship with PSP. Finally,since the fundamental
purpose of the three market structures are very different, onewould expect different approaches
to the value that they offer to their businesspartners and customers and the manner in which they
organize their revenue stream.

Figure 1 illustrates the relative emphasis the players in these market structures placeon three
dimensions. Portals lay more emphasis on building a community ofcustomers and channeling the
customer eyeball traffic. On the other hand, marketmakers are more interested in building a
community of both suppliers and buyers.Organizations in the PSP market structure will however,
focus more on building acommunity of buyers. The other two dimensions are of less importance
to this group.

It will therefore be interesting to understand how existing organizations in thesesegments have

carved out business models. We turn our attention to this aspect bydeveloping a notion of a
business modelBusiness Models for Internet based e-commerce Understandably, for the sector of
the industry that is hardly a decade old, a formal definition of a business model is non-existent.

There have been scanty attempts in the past to formally define and classify business models in
the Internet context. In ourunderstanding these attempts are neither complete nor robust.
However, we present abrief over view of these for the sake of completeness.

Schlachter
10 identified five possible revenue streams for a web site. These includedsubscriptions, shopping
mall operations, advertising, computer services and ancillarybusiness. The emphasis was to show
how revenue models existing in the brick andmortar scenario would be exploited in a web based
business.

Fedwa
11 identified sevenrevenue generating business models. In addition to the revenue streams
identified bySchlachter, Fedwa added timed usage and sponsorship and public support as
possiblerevenue streams. Based on a qualitative analysis of the Internet based modelspertaining
to grocery and delivery of customer packages Parkinson
12 stressed the roleof business affinities such as logistic providers in creating the value
proposition.These models were too narrow in their scope and do not cover the gamut of
alternatives employed by today's Internet-based businesses. Perhaps a betterdescription of the
business model was provided by Timmers

13Timmers identified .eleven business models that currently exist and classified them on the
basis of degreeof innovation and functional integration required. Figure 2 shows the
classificationscheme and some representative examples. These business models describe a
particular unique aspect of doing business over the net and ignore other aspects. Agood theory
should ensure that the factors considered as part of the explanation of thephenomena of interest
should possess comprehensiveness and parsimony

14Previous .attempts to define business models for Internet based business do not satisfy these
requirements. For instance, the example of Amazon.com for building a virtualcommunity (see
figure 2) does not bring out another unique feature, viz., disintermediation of supply chain.
We argue that a business model is a unique blend of three streams that are critical tothe business.
These include the value stream for the business partners and the buyers,the revenue stream and
the logistical stream. Value stream identifies the valueproposition for the buyers, sellers and the
market makers and portals in an Internetcontext. The revenue stream is a plan for assuring
revenue generation for the businessand the logistical stream addresses various issues related to
the design of the supply chain for the business. The long-term viability of a business largely
stems from the robustness of the value stream. Furthermore, the value stream in turn influences
the revenue stream and choices with respect to the logistical stream.Value streams in Internet
based business

Figure 3 is an illustration of value streams in Internet based business. Often, buyers perceive
value arising out of reduced product search cost and transaction costs.Further the inherent
benefits of the richness and reach of the Internet provides an improvised shopping experience
and convenience. It is not uncommon for the buyersto have benefits that spill over to other
domains. For example, a market maker offering air line tickets may provide, in addition, hotel
and car rental services for thebuyer when he purchases a ticket to her holiday destination.
Furthermore the buyer will also have access to the views of a community of people who visited
the sameplacepreviously at the same time of the year. The value these online communities
provide to buyers is hard to replicate in the physical world.

3.3: E-Commerce Consumer applications

Business-to-Consumer (B2C) e Commerce has been described as any business operations

conducted directly between a company and their consumers (QUT School of International
Business, 2003, p. xv). This type of e Business involves disintermediation or removing the
‘middlemen€™ that have traditionally played such an integral role in business
communications (Rowley, 2002, p.7). Some benefits of removing these mediators are that
business transactions become cheaper and more efficient; there is a reduction in inventory and a
reduction in property costs and maintenance. E Business encourages equal opportunity for all
B2C companies, as there are fewer barriers to marketplace entry (Rowley, 2002, p.7).
When eCommerce was first introduced, B2C companies were the original pioneers. The dot.com
boom of the late 1990’s saw Internet corporations such as Yahoo!, Amazon.com and
Ebay taken from obscurity and thrust into the eCommerce spotlight (Flew, 2002, pp.6-7).
Despite the consequential dot.com crash of 2000 and 2001(Shade, 2001, p.44), Business-to-
Consumer applications are still revered in the world of eCommerce.

In today’s society, consumer sovereignty reigns. Individuals are increasingly demanding

convenience and quality but at lower prices (Kalakota and Whinston, 1997, p.21). B2C
companies are very consumer oriented (May, 2000, p.83). They provide quality goods and
services to consumers at competitive prices. So competitive in fact, that they often are cheaper
than their bricks & mortar counterparts (Rowley, 2002, p.8). This is particular evident
through online retail. Online retail is exactly as the name suggests; retail stores based on the
Internet. Successful web-based retail requires two major components: diversity of products and
economies of scale (May, 2000, p.101). A classic example of an online retail giant
is Amazon.com. More recent examples of successful online retail stores are pharmaceutical sites
such as DrugStore.com.

A secondary example of a Business-to-Consumer application is online advice sites. These sites

do not sell goods to consumers as such, but they do provide an invaluable service: advice. The
web was originally designed as a communications tool for research groups to share and exchange
information (Rowley, 2002, p.25). The introduction of eCommerce meant that this group
exchange had the potential to be commercially beneficial as well. Many companies realized the
economical potential of B2C advice sites and structured their businesses accordingly. Sites such
as Trade offer ‘Free Advice’ to consumers in the hope that they will retain their custom
and loyalty (May, 2000, pp.117-118). Search engines such
as AltaVista, Google and AskJeeves offer links to other sites related to the users search queries.
Business-to-consumer applications have proved critical to the success of eBusiness. There is
great potential for future expansion in the B2C field and this area will continue to grow for many
years.
Business-to-Consumer (B2C)

When conducting business over the Internet, there is several different transaction or business
models that exist within the world of E-Business. One of the most common models in E-
Commerce is the Business-To-Consumer (B2C) model. In B2C transactions, online transactions
are made between businesses and individual consumers. Businesses sell products and services
through electronic channels directly to the consumer (Bidgoli, 2002, p.50).
 B2C E-Commerce involves what is known as electronic retailing or e-tailing. E-tailing
involves online retail sales. E-tailing makes it easier for a manufacturer to sell directly to a
customer, cutting out the need for an intermediary (retailer). With B2C transactions there is no
need for retailers and therefore, no need for a physical store from which to distribute products.
An electronic or Web storefront refers to a single companies Web site where products and
services are sold. Customers can browse online catalogs or electronic storefronts when it best
suits them (Turban et al. 2002, p.82). Amazon.com is an excellent example of a B2C company.
Here, customers can browse catalogs when they want, place an order and the product of service
will be delivered directly to them.

According to Turban (2002, p.83) the main things which are browsed and sell well over
the Internet include:

1. Computer hardware and software: While hardware is most popular, more and more people
buy software online as well. Dell and Gateway are the major online vendors of computer
hardware and software, with more than $15billion sales in 2002.
2. Consumer electronics: The second largest product category sold online. Digital cameras,
printers, scanners, and wireless devices (mobile phones) are some of the electronics bought
online.
3. Sporting goods: It is difficult to measure the exact figure as there are only a few e-tailers that
sell sporting goods exclusively online.
4. Office supplies: Sales of office supplies at officedepot.com alone reached over $2.3billion in
2002. B2C sales of office supplies are increasing rapidly, all over the world.
Other things which sell well over the Internet include:
5. Books and music
6. Toys
7. Health and beauty
8. Entertainment
9. Apparel
10. Cars
11. Services
12. Others
According to Bidgoli (2002, p.59) there are five major activities involved in conducting B2C E-Commerce.
These are:

1. Information sharing: A B2C E-

Commerce model may use some or all of
the following applications and technologies
to share information with customers:

Company Web site

Online catalogs

E-mail

Online advertisements

Message board system

Newsgroups and discussion groups
2. Ordering: A customer may use electronic forms similar to paper forms or e-mail to order a
product or service.

3. Payment: There are a variety of options. These include:

Credit cards

Electronic cheques

Digital cash

4. Fulfillments: The fulfillment function could be

very complex depending upon the delivery of
physical products (books, videos and CD's) or digital
products (software, music, electronic documents).
Fulfilment is responsible for physically delivering
the product or service from the merchant to the
customer.

5. Service and support: Is more important in E-Commerce than traditional business because E-
Commerce companies lack a traditional physical presence and need other ways to maintain
current customers. Examples include:

E-mail confirmation

Periodic news flash

Online surveys

Help desk

Guaranteed secure transactions

Guaranteed online auctions

These five activities all need to be used in conjunction with one another for a B2C business to be
successful.

According to Patton (2001), the main reason that there is such a hype about B2C businesses is
that they are quickly gaining in size and market capitalization and therefore, pose a threat to
traditional brick and mortar businesses. "In many ways, these dotcoms seemed to be rewriting
the rules of business †? They had the customers without the expenses of maintaining physical
stores, little inventory, unlimited access to capital and little concern about actual earnings"
(Patton, 2001).

E-Commerce and in particular, B2C businesses, have proven to be extremely successful over the
past few years. Not only do the actual businesses reap the benefits, but so do the potential
customers. With the every increasing number of E-Commerce B2C businesses evolving, the
future for traditional, physical businesses is not looking positive. As the possibilities created by
E-Commerce continue to expand, so will the number of emerging B2C businesses.
3.4: E-Commerce organization applications

B2B e-commerce is simply defined as e-commerce between companies. This is the type of e-
commerce that deals with relationships between and among businesses. About 80% of e-
commerce is of this type, and most experts predict that B2B e-commerce will continue to grow
faster than the B2C segment. The B2B market has two primary components: e-frastructure and e-
markets. E-frastructure is the architecture of B2B, primarily consisting of the following:9

logistics - transportation, warehousing and

distribution (e.g., Procter and Gamble);

application service providers - deployment,
hosting and management of packaged software
from a central facility (e.g., Oracle and
Linkshare);

outsourcing of functions in the process of e-
commerce, such as Web-hosting, security and customer care solutions (e.g., outsourcing
providers such as eShare, NetSales, iXL Enterprises and Universal Access);

auction solutions software for the operation and maintenance of real-time auctions in the
Internet (e.g., Moai Technologies and OpenSite Technologies);

content management software for the facilitation of Web site content management and
delivery (e.g., Interwoven and ProcureNet); and

Web-based commerce enablers (e.g., Commerce One, a browser-based, XML-enabled
purchasing automation software).
E-markets are simply defined as Web sites where buyers and sellers interact with each other and
conduct transactions.1

The more common B2B examples and best practice models are IBM, Hewlett Packard (HP),
Cisco and Dell. Cisco, for instance, receives over 90% of its product orders over the Internet.
Most B2B applications are in the areas of supplier management (especially purchase order
processing), inventory management (i.e., managing order-ship-bill cycles), distribution
management (especially in the transmission of shipping documents), channel management (i.e.,
information dissemination on changes in operational conditions), and payment management
(e.g., electronic payment systems or EPS).11

eMarketer projects an increase in the share of B2B e-commerce

in total global e-commerce from 79.2% in 2000 to 87% in 2004
and a consequent decrease in the share of B2C e-commerce from 20.8% in 2000 to only 13% in
2004 (Figure 3).
Figure 3. Share of B2B and B2C E-Commerce in Total Global E-Commerce (2000 and 2004)

This image is available under the terms of GNU Free Documentation License and Creative
Commons Attribution License 2.5

Likewise B2B growth is way ahead of B2C growth in the Asia-Pacific region. According to a
2001 eMarketer estimate, B2B revenues in the region are expected to exceed $300 billion by
2004.

Table 2 shows the projected size of B2B e-commerce by region for the years 2000-2004.

Figure 4. Projected B2B E-Commerce by Region, 2000-2004 ($billions)

This image is available under the terms of GNU Free Documentation License and Creative
Commons Attribution License 2.5
Benefits of B2B E-Commerce in Developing Markets
The impact of B2B markets on the economy of developing countries is evident in the following:
Transaction costs. There are three cost areas that are significantly reduced through the conduct
of B2B e-commerce. First is the reduction of search costs, as buyers need not go through
multiple intermediaries to search for information about suppliers, products and prices as in a
traditional supply chain. In terms of effort, time and money spent, the Internet is a more efficient
information channel than its traditional counterpart. In B2B markets, buyers and sellers are
gathered together into a single online trading community, reducing search costs even further.
Second is the reduction in the costs of processing transactions (e.g. invoices, purchase orders and
payment schemes), as B2B allows for the automation of transaction processes and therefore, the
quick implementation of the same compared to other channels (such as the telephone and fax).
Efficiency in trading processes and transactions is also enhanced through the B2B e-market’s
ability to process sales through online auctions. Third, online processing improves inventory
management and logistics.

Disintermediation. Through B2B e-markets, suppliers are able to interact and transact directly
with buyers, thereby eliminating intermediaries and distributors. However, new forms of
intermediaries are emerging. For instance, e-markets themselves can be considered as
intermediaries because they come between suppliers and customers in the supply chain.

Transparency in pricing.
Among the more evident benefits of e-markets is the increase in price transparency. The
gathering of a large number of buyers and sellers in a single e-market reveals market price
information and transaction processing to participants. The Internet allows for the publication of
information on a single purchase or transaction, making the information readily accessible and
available to all members of the e-market. Increased price transparency has the effect of pulling
down price differentials in the market. In this context, buyers are provided much more time to
compare prices and make better buying decisions. Moreover, B2B e-markets expand borders for
dynamic and negotiated pricing wherein multiple buyers and sellers collectively participate in
price-setting and two-way auctions. In such environments, prices can be set through automatic
matching of bids and offers. In the e-marketplace, the requirements of both buyers and sellers are
thus aggregated to reach competitive prices, which are lower than those resulting from individual
actions.

Economies of scale and network effects. The rapid growth of B2B e-markets creates traditional
supply-side cost-based economies of scale. Furthermore, the bringing together of a significant
number of buyers and sellers provides the demand-side economies of scale or network effects.
Each additional incremental participant in the e-market creates value for all participants in the
demand side. More participants form a critical mass, which is key in attracting more users to an
e-market.

3.5. SUMMARY

The concept of Ecommerce first came about in the early 1970s with the development of
ECommerce applications such as the innovation of Electronic Funds Transfer (EFT). Electronic
Funds Transfer allowed funds to be sent electronically from one organisation to another.
However, this was limited to large, corporate businesses and financial institutions. Next in line
came Electronic Data Interchange (EDI) which allowed not only large, corporate businesses and
financial institutions to send funds electronically, but also allowed manufacturers, retailers,
services and many other types of businesses to electronically transfer routine documents. Many
other ECommerce applications such as stock trading and travel reservation systems evolved out
of Electronic Data Interchange until finally the commercialisation of the Internet brought about
the introduction of ECommerce (Turban, 2004, p.8).
Beginning life in 1969, the Internet was primarily used by a largely technical audience of U.S
government agencies, academic researchers and scientists. However, in the early 1990s, when
the Internet began to commercialise and users began to participate in the WWW, a large number
of 'dot-coms' or 'Internet start-ups' appeared. The main reason for this rapid expansion was the
development of new networks, protocols and ECommerce software. The other main reason for
the birth of Ecommerce was the increase in competition and other business pressures (Turban,
2004, pp.8-9).
Schneider (2003, p.4) defines ECommerce as "business activities conducted using electronic
data transmission technologies, such as those used on the Internet and the WWW". It involves
buying, selling, transferring or exchanging products, services and/or information via computer
networks and is a major distribution channel for goods, services and managerial and professional
jobs.
E-Commerce is often confused with E-business, with many people believing the two terms are
interchangeable, when in fact this is incorrect. As opposed to E-Commerce, E-businesses create
strategic opportunities and competitive advantage by adding value for customers and improving
efficiency through the use of Internet and information technologies. E-Business deals with the
models and strategies of the business itself. E-Commerce is a result of E-business, and deals with
the technology-mediated physical transactions and exchanges between parties as well as
electronically based intra- or inter-organisational activites that facilitate such exchanges. (See e-
commerce characteristics following perspectives.)
According to Turban (2004, p.3), ECommerce can be defined from many perspectives. These
perspectives are:

Communications - ECommerce is the delivery of goods, services, information, or payments

over computer networks or by any other electronic means.

Commercial (trading) - ECommerce provides the capability of buying and selling products,
services and information on the Internet and via other online services.

Business Process - ECommerce is doing business electronically by completing business

processes over electronic networks.

Service - ECommerce is a tool that addresses the desire of governments, firms, consumers, and
management to cut service costs while improving the quality of customer service and increasing
the speed of service delivery.

Learning - ECommerce is an enabler of online teaching and education in schools, universities,

and other organisations, including businesses.

Collaboration - ECommerce is the framework for inter-organisational and intra-organisational

collaboration.

Community - ECommerce provides a gathering place for community members to learn, transact
and collaborate.

In addition to these perspectives, E-Commerce can be characterised by several attributes, as

detailed further in the QUT School of International Business, McGrawHill/QUT Custom
published “Introduction to e-business� (2004) textbook:

• It is about the exchange of digitized information between parties. Between individuals or
organisations, this information exchange can be represented by “communications between two
parties, coordination of the flow of goods and services, or transmission of electronic
orders.� (p. xiii) • It is technology-enabled. The crux of e-commerce, “e� being
anything electronic, not only the Internet/computers. Essentially this means transactions can be
managed using technology, as opposed to strictly human interaction. • It is technology-
mediated. This refers to the change from the “marketplace� to the “marketspace� and
the fact that computers and machines initially manage customers and their expectations, rather
than being done through human-to-human contact. • It includes intra- and interorganisational
activities that support the exchange. This means that e-commerce relates not only to relations
with external parties – customers, suppliers, partners, competitors and markets – but also
how they “operate internally in managing activities, processes and systems.� (p. xiii)

ECommerce is constantly changing economies, markets and industry structure, products and
services and their flow. This includes changing consumer segmentation, consumer values and
consumer behaviour. However, ECommerce has always had a major impact on society and
politics and in particular the way we view the world and ourselves in it (Turban, 2004, p.3).
During the last few years, ECommerce has brought about successful virtual companies such
as ebay.com. EBAy is the world's number one online auction site in which people can buy and
sell almost anything they want, within reason. EBay allows shoppers to browse items from the
comfort of their homes or offices, at any time of the day or night (School of Advertising,
Marketing and Public Relations, 2003, p.6).

3.6: GLOSSARY

The Global Information Infrastructure (GII), still in the early stages of its development, is
already transforming our world. Over the next decade, advances on the GII will affect almost
every aspect of daily life -- education, health care, work and leisure activities. Disparate
populations, once separated by distance and time, will experience these changes as part of a
global community.

No single force embodies our electronic transformation more than the evolving medium known
as the Internet.1 Once a tool reserved for scientific and academic exchange, the Internet has
emerged as an appliance of everyday life, accessible from almost every point on the planet.
Students across the world are discovering vast treasure troves of data via the World Wide Web.
Doctors are utilizing tele-medicine to administer off-site diagnoses to patients in need. Citizens
of many nations are finding additional outlets for personal and political expression. The Internet
is being used to reinvent government and reshape our lives and our communities in the process.2
As the Internet empowers citizens and democratizes societies, it is also changing classic business
and economic paradigms. New models of commercial interaction are developing as businesses
and consumers participate in the electronic marketplace and reap the resultant benefits.
Entrepreneurs are able to start new businesses more easily, with smaller up-front investment
requirements, by accessing the Internet's worldwide network of customers.

Internet technology is having a profound effect on the global trade in services. World trade
involving computer software, entertainment products (motion pictures, videos, games, sound
recordings), information services (databases, online newspapers), technical information, product
licenses, financial services, and professional services (businesses and technical consulting,
accounting, architectural design, legal advice, travel services, etc.) has grown rapidly in the past
decade, now accounting for well over $40 billion of U.S. exports alone.3

An increasing share of these transactions occurs online. The GII has the potential to
revolutionize commerce in these and other areas by dramatically lowering transaction costs and
facilitating new types of commercial transactions.

The Internet will also revolutionize retail and direct marketing. Consumers will be able to shop
in their homes for a wide variety of products from manufacturers and retailers all over the world.
They will be able to view these products on their computers or televisions, access information
about the products, visualize the way the products may fit together (constructing a room of
furniture on their screen, for example), and order and pay for their choice, all from their living
rooms.

Commerce on the Internet could total tens of billions of dollars by the turn of the century.4 For
this potential to be realized fully, governments must adopt a non-regulatory, market-oriented
approach to electronic commerce, one that facilitates the emergence of a transparent and
predictable legal environment to support global business and commerce. Official decision
makers must respect the unique nature of the medium and recognize that widespread competition
and increased consumer choice should be the defining features of the new digital marketplace.

Many businesses and consumers are still wary of conducting extensive business over the Internet
because of the lack of a predictable legal environment governing transactions. This is particularly
true for international commercial activity where concerns about enforcement of contracts,
liability, intellectual property protection, privacy, security and other matters have caused
businesses and consumers to be cautious.
As use of the Internet expands, many companies and Internet users are concerned that some
governments will impose extensive regulations on the Internet and electronic commerce.
Potential areas of problematic regulation include taxes and duties, restrictions on the type of
information transmitted, control over standards development, licensing requirements and rate
regulation of service providers. Indeed, signs of these types of commerce-inhibiting actions
already are appearing in many nations. Preempting these harmful actions before they take root is
a strong motivation for the strategy outlined in this paper.
Governments can have a profound effect on the growth of commerce on the Internet. By their
actions, they can facilitate electronic trade or inhibit it. Knowing when to act and -- at least as
important -- when not to act, will be crucial to the development of electronic commerce.5 This
report articulates the Administration's vision for the emergence of the GII as a vibrant global
marketplace by suggesting a set of principles, presenting a series of policies, and establishing a
road map for international discussions and agreements to facilitate the growth of commerce on
the Internet.

3.7. CHECK YOUR PROGRESS

1: What is Anatomy of E-Commerce application?

2: What is B2C?
3: What is MMK?

3.8. REFERENCE

• E commerce and E Business

• Chaudhury, Abijit; Jean-Pierre Kuilboer (2002). e-Business and e-Commerce
Infrastructure. McGraw-Hill.
• Frieden, Jonathan D.; Roche, Sean Patrick (2006-12-19). "E-Commerce: Legal Issues of
the Online Retailer in Virginia" (PDF). Richmond Journal of Law & Technology 13 (2)
• Graham, Mark (2008). "Warped Geographies of Development: The Internet and Theories
of Economic Development" (PDF). Geography Compass 2 (3): 771.
• Kessler, M. (2003). More shoppers proceed to checkout online. Retrieved January 13,
2004
• Nissanoff, Daniel (2006). FutureShop: How the New Auction Culture Will Revolutionize
the Way We Buy, Sell and Get the Things We Really Want (Hardcover ed.). The Penguin
Press. pp. 246 pages.
• Seybold, Pat (2001). Customers.com. Crown Business Books (Random House).
• Miller, Roger (2002). The Legal and E-Commerce Environment Today (Hardcover ed.).
Thomson Learning. pp. 741 pages.
• Kotler, Philip (2009). Marketing Management. Pearson:Prentice-Hall.

3.9: ANSWER TO CHECK YOUR PROGRESS

1: Read 3.2.
2: Read 3.3.
3: Read 3.2
 Unit 4
Content:

4.1: Credit cards, debit cards, smart cards, e-credit accounts

4.2: e-money security concerns in E-commerce, authenticity, privacy, integrity, non-
repudiation, encryption, secret key cryptography, public key cryptography, SET,
SSL, digital signatures, firewalls
4.4. Summary
4.5: Glossary
4.4. Check Your Progress
4.5. References
4.6. Answer to Check Your Progress
4.1: Credit cards, debit cards, smart cards, e-credit accounts

CREDIT CARDS:
A credit card is a small plastic card issued to users as a system of payment. It allows its
holder to buy goods and services based on the holder's promise to pay for these goods and
services.[1] The issuer of the card creates a revolving account and grants a line of credit to
the consumer (or the user) from which the user can borrow money for payment to a merchant or
as a cash advance to the user.
A credit card is different from a charge card: a charge card
requires the balance to be paid in full each month. In contrast,
credit cards allow the consumers a continuing balance of
debt, subject to interest being charged. A credit card also
differs from a cash card, which can be used like currency by
the owner of the card. Most credit cards are issued
by banks or credit unions, and are the shape and size
specified by the ISO/IEC 7810 standard as ID-1. This is
defined as 85.60 × 53.98 mm

How Credit Cards Works

Credit cards are issued by a credit card issuer, such as a bank or credit union, after an account
has been approved by the credit provider, after which cardholders can use it to make purchases at
merchants accepting that card. Merchants often advertise which cards they accept by
displaying acceptance marks – generally derived from logos – or may communicate this orally,
as in "Credit cards are fine" (implicitly meaning "major brands"), "We take (brands X, Y, and
Z)", or "We don't take credit cards".

When a purchase is made, the credit card user agrees to pay the card issuer. The cardholder
indicates consent to pay by signing a receipt with a record of the card details and indicating the
amount to be paid or by entering a personal identification number (PIN). Also, many merchants
now accept verbal authorizations via telephone and electronic authorization using the Internet,
known as a card not present transaction (CNP).
Electronic verification systems allow merchants to verify in a few seconds that the card is valid
and the credit card customer has sufficient credit to cover the purchase, allowing the verification
to happen at time of purchase. The verification is performed using a credit card payment
terminal or point-of-sale (POS) system with a communications link to the merchant's acquiring
bank. Data from the card is obtained from a magnetic stripe or chip on the card; the latter system
is called Chip and PIN in the United Kingdom and Ireland, and is implemented as an EMV card.

For card not present transactions where the card is not shown (e.g., e-commerce, mail order, and
telephone sales), merchants additionally verify that the customer is in physical possession of the
card and is the authorized user by asking for additional information such as the security
code printed on the back of the card, date of expiry, and billing address.

Each month, the credit card user is sent a statement indicating the purchases undertaken with the
card, any outstanding fees, and the total amount owed. After receiving the statement, the
cardholder may dispute any charges that he or she thinks are incorrect (see 15 U.S.C. § 1643,
which limits cardholder liability for unauthorized use of a credit card to $50, and the Fair Credit
Billing Act for details of the US regulations). Otherwise, the cardholder must pay a defined
minimum proportion of the bill by a due date, or may choose to pay a higher amount up to the
entire amount owed. The credit issuer charges interest on the amount owed if the balance is not
paid in full (typically at a much higher rate than most other forms of debt). In addition, if the
credit card user fails to make at least the minimum payment by the due date, the issuer may
impose a "late fee" and/or other penalties on the user. To help mitigate this, some financial
institutions can arrange for automatic payments to be deducted from the user's bank accounts,
thus avoiding such penalties altogether as long as the cardholder has sufficient funds.

CREDIT CARDS TYPES

There are so many different types of charge and credit cards, how you find the card that is right
for you? Begin by thinking about how you are likely to use credit and then comparing the types
of charge cards and credit cards available. Some of them offer excellent value, while others may
cost more to use but provide special services you may find helpful. The best approach is to
carefully research card rates, fees and benefits—perhaps even creating a chart for easy
comparison.

Charge cards provide you with the convenience of purchasing power based on your agreement
to pay the full amount of the charges due each month, so there is no finance charge. The
American Express Card for Students (the green Card) is an example of a charge card.

Credit cards provide you with a revolving loan—or credit limit—based on your agreement to
pay at least the minimum amount due on the amount of credit you use by the payment
date. A finance charge is applied to the outstanding balance—the amount you do not pay
by the due date. For example, if you purchase $200 in one month and you pay the
minimum amount due of $15, you will pay a finance charge on the outstanding balance
the next month. The American Express Credit Card for Students (the blue Card) is an
example of a credit card.
You can avoid paying finance charges by paying your balance in full—that is, paying off the
outstanding revolving loan balance. However, revolving credit cards give you the flexibility of
making minimum payments when that is most convenient for you. The cost of this convenience
is the finance charge.
Typically, credit cards have a revolving credit limit. That means that as soon as you pay for
credit you have used, it becomes available again. For example, if you had a credit limit of $500,
then spent $100, your available credit would be $400 until you repaid the outstanding $100,
when your available credit would be $500 again.

General-purpose credit cards are credit cards that can be used to pay for just about anything,
anywhere from clothes at department stores to meals at restaurantsas well as to get cash
advances. American Express, Visa, MasterCard and Discover cards are examples. Many
people prefer a general-purpose card because they can use it in many different
establishments. Another advantage of using this type of card is that it combines many
different types of expenses in a single bill, making payment easier.

Single or limited-purpose credit cards are credit cards that can be used only in a specific store
or group of stores, or for a specific purpose. The JCPenney Regular Charge Card and the
Radio Shack Answer Plus are examples. Some people prefer to have separate credit
accounts, such as a gasoline credit card, a credit card at a chain or specialty store, plus
other cards.

Premium cards such as Platinum or Gold Cards are charge or credit cards that offer additional
benefits such as travel upgrades, special insurance or exclusive seating for concerts.
Generally, premium cards require a substantial income and an excellent credit history,
offer a higher credit limit, and may charge higher fees. To find out if you qualify for one
of these cards, call the company's toll-free number to learn about application
requirements and costs. Apply only if you fulfill the application requirements, and if the
card provides you with benefits and services you believe to be worthwhile.

Affinity credit cards are associated with specific organizations and offered to people affiliated
with those organizations. Generally, an affinity credit card is co-sponsored by the
organization it is associated with, and the organization receives a percentage of the sales
or profits generated by the card. The Penn State MBNA Visa Card is an example. Rates,
fees and benefits of affinity cards vary widely, and may make these cards more expensive
to use than similar, non-affiliated cards. People who use them generally do so to help
support an organization or cause they care about.

Co-branded credit cards are co-sponsored by two companies and have benefits and rewards
designed specifically for their joint customers. For example, the American Express Delta
SkyMiles Card is a co-branded credit card for people who travel frequently on Delta
Airlines that offers Cardmembers exclusive travel discounts and other benefits. Other
popular co-branded cards are available to owners or prospective owners of automobiles,
investors in mutual funds and credit union members.
Secured cards are credit cards
rds gu
guaranteed by a bank account or deposit madeade by
b the applicant.
The credit limit is based
sed on the amount of deposit and may be the sameme amount
am or larger.
Secured credit cardss are uuseful to establish or improve a credit record,
ecord, particularly if
someone has never had cre credit or has a poor credit history. The APR
R on a secured credit
card is usually higherr than on an unsecured credit card. Applicationn and processing fees
may also be required.. Inter
Interest may or may not be paid on your deposit.

Stored-value or "smart" cardsards look like credit cards but are actually prepaid
paid cards.
c A stored-
value card has a set value which decreases as the card is used. For examp
xample, a $10 phone
card is programmed to proprovide $10 worth of service. When the card ard value
va is depleted,
you buy another card.

Smart cards are moree flex

flexible because they contain an integrated micros
icroship that can be
programmed to provide ide in
information codes as well as financial informatio
rmation. The prepaid
value of a smart cardd decr
decreases as you use the card but can be increased
reased by paying for
additional value. Manyany ccolleges issue smart cards that give students
dents access to food
services, vending, photoc
hotocopying, laundry, telephone and other purchaurchases as well as
access to the library, labora
laboratories and other secured areas on campus.

Debit cards look like creditt cards and can be used in many places where a credit
cred card is used.
The difference betweeneen a credit card and a debit card is that a debit
bit card
ca accesses the
money in your bank or inv investment account to pay for purchases. Thee payment
pay amount is
transferred from yourr acco
account to the merchant's account the same day—yo you do not have a
"float" of a few days betwe
between the time of purchase and payment collection
lection. An advantage
of a debit card is that
at you can't spend money you don't have—you u don't
don create debt—
because you aren't buyin
buying on credit; you are paying with funds ds in your bank or
investment account. A dis disadvantage is that debit cards are not subject
bject to many of the
consumer legal rightsts that apply to credit cards regarding returns,, resolution
resol of errors,
fraud or other issues.

ATM cards are used to get cash aand complete other transactions at a bank machine
machi or automatic
teller machine (ATM). Manyy AT
ATM cards can be used in selected computer ter networks,
net such as
Cirrus, HONOR, NYCE and S STAR. For example, your ATM may work in any bank,
supermarket or other st
store that is part of the Cirrus
Cir network.

ATM cards are increasingly being used as debit cards as well. Like all debitt cards,
cards the money for
these purchases is transferredd out of your account within that day's business
ss cycle.
cyc If you aren't
sure if your ATM card is alsolso a debit card, you can call the Customer Service
ervice number on the
back of your card and ask thee repr
representative.

VISA CARDS
Visa Inc. (pronunciation: / vi zəə/; NYSE: V) is a global payments techno echnology company
he
headquartered in 595 Market Street in San Francisco,
Franci California.
It facilitates electronic funds transfers througho
roughout the world,
m
most commonly through Visa-branded credit card and debit
ca
cards. Visa does not issue cards, extend credit
redit or
o set rates and
fees for consumers; rather, Visa provides financial institutions with Visa-branded payment
products that they then use to offer credit, debit, prepaid and cash-access programs to their
customers. In 2008, according to The Nilson Report, Visa held a 38.3% market share of the
credit card marketplace and 60.7% of the debit card marketplace in the United States. In 2009,
Visa’s global network (known as VisaNet) processed 62 billion transactions with a total volume
of $4.4 trillion.

Visa has operations across Asia-Pacific, North America, Central and South
America, Caribbean, Central and Eastern Europe, Africa and Middle East.Visa Europe is a
separate membership entity that is an exclusive licensee of Visa Inc.'s trademarks and technology
in the European region, issuing cards such as Visa Debit.

MASTER CARDS

MasterCard Worldwide (NYSE: MA) is an

American multinational corporation with its
headquarters in the MasterCard International
Global Headquarters in Purchase, New York.
Throughout the world, its principal business is to
process payments between the banks of merchants
and the card issuing banks or credit unions of the
purchasers who use the "MasterCard"
brand debit and credit cards to make purchases.
MasterCard Worldwide has been a publicly traded
company since 2006. Prior to its initial public offering, MasterCard Worldwide was
a membership organization owned by the 25,000+ financial institutions that issue its card.

MasterCard, originally known as MasterCharge, was created by several California banks as a

competitor to the BankAmericard issued by Bank of America, which later became the Visa credit
card issued by Visa Inc. The original banks behind MasterCharge were United California Bank
(later First Interstate Bank and subsequently merged into Wells Fargo Bank), Wells
Fargo, Crocker National Bank (also subsequently merged into Wells Fargo), and the Bank of
California (subsequently merged into the Union Bank of California).

Difference between Visa and MasterCard

Visa vs. MasterCard

In an economy which relies most

mostly on a credit system, it pays to be a wise se consumer
con and deal
with a credit card company that w
will give you the best set of benefits. This iss precisely
prec the reason
why you need to make a comparis
mparison of the different credit card companies available
avail – two of
which are Visa and MasterCard.

To start right off, here’s a quic

quick background of how these two credit card
rd companies
com started.
MasterCard was founded inn 19661966, and they are a multinational corporation
tion dealing
d with the
processing of payments between
ween banks and merchants. Besides from credit it cards,
car MasterCard
debit cards can also be used to ma
make purchases.

Visa, on the other hand, is a Cali

California-based company, founded in 1970, and the t name stands
for Visa International Service
ce Ass
Association. They are considered as the world’ €™s largest retail
electronic payment network  “which processes payments between merchan erchants, businesses,
consumers and even government
ment eentities. They also offer debit cards in addition
ition to credit cards.

You should understand that both V Visa and MasterCard are not themselves the
he ones
one issuing credit
cards to consumers. Instead,, they negotiate the setting up of the payment system
ystem between banks,
merchants and other businesss estab
establishments from around the world.

There was a time when Visa isa w

was accepted in more stores around the worldworl compared to
MasterCard, but this is no longer
onger tthe case. Today, MasterCards are acceptedd wherever
whe Visa card
payments are processed. In terms of security for shopping online, Visa offers
ffers the
th ‘Verified by
Visa’ scheme, while MasterCard
Card uuses the ‘SecureCode’ system. Both Visa and MasterCard
M also
offer reward schemes which you ccan take advantage of when making purchases.

The interest rate, however, is som

something that will be determined by your bank – so always
make a comparison of the Visa
isa and MasterCard rates offered by the differentt banks.
bank

Summary:
1. MasterCard was founded in 1961966, while Visa was founded in 1970.
2. MasterCard’s headquarters
arters is based in New York, while Visa has its main location in San
Francisco, California.
3. MasterCard offers rewardss sche
schemes, and is a universally accepted card, while Visa
V also offers
points for making purchases,, and iis a globally-recognized form of payment.

MAESTRO CARDS

Maestro is
Maes a multi-national debit card service
ser owned
by MasterCard, and was founded in 1990.. MaestroMae cards are
obta
obtained from associate banks and can bee linkedlink to the card
hold
holder's current account, or they can be prepaid
prepa cards. The
card
cardholder presents the card at the point of sale (POS)
(P and this is
swip
swiped through the terminal by the assistantt or the th customer or
inserted into a chip and PIN devic
device. The payment is authorised by the card issuer
issue to ensure that
the cardholder has sufficient funds in their account to make the purchase and the cardholder
confirms the payment by either signing the sales receipt or entering their 4 to 6-digit PIN.

Within the EU and certain other countries, Maestro is MasterCard's main debit brand and is the
equivalent of signature debit card which does not require electronic authorisation, similar to
the Visa Debit card. In most other countries, Maestro is equivalent to a Visa Electron and is
MasterCard's tertiary card. It requires electronic authorisation much like a Solo debit card, i.e.
not only must the information stored in either the chip or the magnetic stripe be read, this has to
be sent from the Merchant to the issuing bank, the issuing bank then has to respond with an
affirmative authorization. If the information is not read, the issuer will decline the transaction,
regardless of any disposable amount on the connected account. This is different from other debit
and credit cards, where the information can be entered manually into the terminal (i.e. by
punching the 13 to 19 digits and the expiry date on the terminal) and still be approved by
the issuer or stand-in processor.

Maestro is accepted at around 11 million points of sale outlets

Difference between Visa and Maestro

Visa vs Maestro
Visa and Maestro are cards that have been widely accepted througout the world. Visa and
Maestro can be termed as paperless money, which helps in moving around without having
money in pocket.

When comparing the two cards, Visa is the more widely accepted card than Maestro. Visa has a
more foreign reach than Maestro. Visa is accepted more by the websites and also by shops and
other establishments than the Maestro.

When talking of protection, Visa cards give a better protection than Maestro. The Visa cards
come with a charge back a right that gives a better protection to the customers who use it. If a
service or goods that one buys through Visa fails, the customers can claim for better service or
goods. Moreover, there are no limits for any claims.
Maestro cards have been designed as a replacement for cheques. As such these cards do not
come with charge back rights, which mean that the customers have no protection if a service or
goods fail.

Visa cards originated in 1958 as a BankAmerica. The Visa cards were part of Bank of America
till 1970. Later, Visa became an independent company and the name Visa was adopted in 1976.
MasterCard, which was originally called as Master Charge, was developed by a group of
California banks as an entrant to the BankAmerica. United California Bank, Wells Fargo,
Crocker National Bank, and the Bank of California were the banks that came together and
brought out Maestro. The Maestro cards, which can be obtained from associate banks can be
linked with a card holder’s current account. Visa has evolved into a transaction and a
technology-processing firm allowing other financial services and banks to issue cards with its
brand logo.

Summary
1. Visa is the more widely accepted card than Maestro. Visa has a more foreign reach than
Maestro.
2. The Visa cards come with a charge back a right that gives a better protection to the customers
who use it. Maestro cards do not come with charge back rights, which mean that the customers
have no protection if a service or goods purchased fail.
3. Visa cards originated in 1958 as a BankAmerica. MasterCard. It was originally called as
Master Charge which was developed by a group of California banks as an entrant to the
BankAmericard.
4. The Maestro cards, which can be obtained from associate banks can be linked with a card
holder’s current account. Visa has evolved into a transaction and a technology-processing firm
allowing other financial services and banks to issue cards with its brand logo.

AMERICAN EXPRESS CARDS

American Express Company (NYSE: AXP), sometimes known as AmEx, is

a diversified global financial services company headquartered in New York City. Founded in
1850, it is one of the 30 components of the Dow Jones Industrial Average. The company is best
known for its credit card, charge card, and traveler's cheque businesses. Amex cards account for
approximately 24% of the total dollar volume of credit card transactions in the US, the highest of
any card issuer.
Business Week and Interbrand ranked American Express as the 22nd most valuable brand in the
world, estimating the brand to be worth US$14.97 billion. Fortune listed Amex as one of the top
20 Most Admired Companies in the World.

The company's mascot, adopted in 1958, is a Roman gladiator whose image appears on the
company's travelers' cheques and charge cards.

Difference between Visa and American Express

Visa vs American Express

Visa and American Express are two of the best known companies in the credit card issuance
business worldwide. The two companies offer numerous benefits as part of their total package,
and not just the issuing of cards. Often, we get caught with indecision in trying to determine
which the better credit card is and this is not helped by the flood of advertisements and unending
email solicitations from either company.

The companies Visa initially started as BankAmerica in 1958. The card was being issued by
Bank of America as a revolving balance credit card. Starting in 1970 however, the company
went through several changes including being incorporated as National BankAmericard where it
was no longer tied to a single bank. The company was renamed to Visa in 1976 and remained a
private limited company until it went public in 2008.

As for American Express, its history dates further back in 1850 when it started out as a delivery
service for valuable items, time-critical deliveries as well as mail that was considered too
sensitive to be delivered through the US postal service. In subsequent years, the company
introduced financial services while slowly phasing out the delivery services. American Express
introduced its first credit card in 1958.

The business While both companies issue credit cards, Visa does more of payment processing
than issuing while American Express is mainly into card issuing. It is a matter of preference and
needs when it comes to users deciding on which card to use. However, common things to look
for are fees and any benefits programs that may come with certain cards. For instance,
there’s some sort of annual fee typical with certain American Express cards, not all of them
though. There are some waivers for the fee that may be offered in case a client agrees to spend a
minimum set amount in a year.

American Express cards have cash back offers on purchases that may go up to 5% while Visa
rarely offers straight cash backs, instead offers rewards in other forms like merchandize. On the
contrary, visa card offers generally come with no annual fees but sometimes, an issuer may
charge some kind of fee so it’s important to look at the offer available from an issuer or
a bank in case you choose Visa. Another key difference is that American Express is not as
widely accepted as Visa internationally. This makes it wise to have a Visa Card on international
travels, just in case.

Summary
American Express started in 1850s while Visa started in 1950s.
American Express is more of a card issuer while Visa is generally a payment processing
company.
American Express offers cash backs as rewards while Visa mainly offers non cash rewards like
merchandize.

ADVANTAGE AND DISADVANTAGE OF CREDIT CARDS

A credit card allows you to borrow money to pay for things. There will be a limit to how much
you can borrow called your credit limit. At the end of each month you can either pay off the full
amount you owe or pay defined minimum proportion of the bill by a due date. The future credit
card user should carefully study every credit card deal and revise his or her payment possibilities
to suit. There are a lot of advantages.

Advantages of credit cards:

Credit card reduces need to carry cash or checks. A credit card means you don't need to carry
huge amounts of cash around and risk losing it.

If you make an unforeseen, large purchase, credit allows you to buy it at once and settle up later.
Besides it gives you the opportunity to spread the cost of a large payment over several months.

As well as convenient, accessible credit, credit companies offer consumers flexible rewards
schemes in which points earned by purchasing goods with the card can be redeemed for further
goods and services.

A credit card means you can make purchases abroad without having to worry about local
currency. They have now spread worldwide.

Using credit cards can help you build a positive credit history. Having a good credit history is
also very important, when the credit card owner is applying for loans, rental or even jobs.

Many credit cards offer some type of insurance if your purchase is stolen. Some credit
companies provide extended warrantees on certain types of purchases.
In general, credit cards enhance our personal responsibility and independence.

Many of these advantages are found in the fine print of your statement that came with the credit
card. Make sure you understand how everything works because the benefits differ from card to
card.

Of course this only works because many people do not pay their balance at the end of the month.
If nobody carried a balance, the banks would be out of money and they unquestionably would
not offer any of those reward schemes that give you free miles or hotel rewards.

Disadvantages of credit cards:

The biggest disadvantage is that they are inviting cardholders to spend more money that they
don’t yet have. It is far too easy to spend more than you can afford using a credit card. Most
credit cards do not ask you to pay off your balance each month. While this may feel like “free
money" at the time, you will absolutely must to pay it off. The longer you wait, the more money
you will lose with interest which accrues every day until you pay the balance.

Credit cards can be stolen, as can cash. They may be physically stolen or someone may steal
your credit card number from a website, over the phone etc. The good news is that, unlike cash,
if you find your card has been stolen and you inform your credit company instantly, you will not
pay for purchases that somebody else has made.

Credit cards issue a monthly spending limit. While they are mostly high, if you exceed it, you
may face even bigger charges.

So if a credit card is not used wisely, people can get into debt or even bankruptcy.

Think carefully before applying for a credit card. There are many benefits you can obtain by
using a credit card-all for free as long as you pay off your balance at the end of each month.
Other people aren't going to pay off the balance and they are paying for you to get free service.

DEBIT CARDS:
A debit card (also known as a bank card or check card) is a plastic card that provides an
alternative payment method to cash when making purchases. Functionally, it can be called
an electronic check or giro, as the funds are withdrawn directly from either the bank account, or
from the remaining balance on the card. In some cases, the cards are designed exclusively for use
on the Internet, and so there is no physical card.

In many countries the use of debit cards has

become so widespread that their volume of use has
overtaken or entirely replaced the check and, in some
instances, cash transactions. Like credit cards, debit
cards are used widely for telephone and Internet
purchases.
 However, unlike credit cards, the funds paid using a debit card are transferred
immediately from the bearer's bank account, instead of having the bearer pay back the money at
a later date.
Debit cards usually also allow for instant withdrawal of cash, acting as the ATM card for
withdrawing cash and as a check guarantee card. Merchants may also offer cash back facilities to
customers, where a customer can withdraw cash along with their purchase.

Types of Debit Card Systems

There are currently three ways that debit card transactions are processed: online debit (also
known as PIN debit), offline debit (also known as signature debit) and the Electronic Purse
Card System.[3] One physical card can include the functions of an online debit card, an offline
debit card and an electronic purse card.
Although many debit cards are of the Visa or MasterCard brand, there are many other
types of debit card, each accepted only within a particular country or region, for
example Switch (now: Maestro) and Solo in the United Kingdom, Interac in Canada, Carte
Bleue in France, Laser in Ireland, "EC electronic cash" (formerly Eurocheque)
in Germany and EFTPOS cards in Australia and New Zealand. The need for cross-border
compatibility and the advent of the euro recently led to many of these card networks (such
as Switzerland's "EC direct", Austria's "Bankomatkasse" and Switch in the United Kingdom)
being re-branded with the internationally recognized Maestro logo, which is part of
the MasterCard brand. Some debit cards are dual branded with the logo of the (former) national
card as well as Maestro (e.g. EC cards in Germany, Laser cards in Ireland, Switch and Solo in
the UK, Pinpas cards in the Netherlands, Bancontact cards in Belgium, etc.). The use of a debit
card system allows operators to package their product more effectively while monitoring
customer spending. An example of one of these systems is ECS by Embed International.

The Difference between credit card and debit cards

Debit cards and credit cards have some things in common. Both are used to access money for
purchases; and both are used instead of cash as a method of convenience. The biggest difference
between a debit card and a credit card is who owns the money which is being used. The next
biggest difference is the limits placed on these types of cards. Here are a few more differences.

Financial
• Debit and credit cards are linked to financial accounts which are handled differently.
Debit cards are tied directly to an account at a bank; while credit cards are tied to a line of
credit which has been made available to you. Debit cards are funded directly from an
account you own. Credit cards are funded by an account owned by the financial
institution. Debit cards use money you already have. Credit cards use money on loan to
you which must be repaid later.

Limitations
• Debit cards cannot help build a credit history; there is no record made outside of your
financial institution that you used funds drawn on from the card. Debit cards also cannot
be used at most Internet shopping sites because you need a PIN number to access the
 funds. Debit cards also re
require a PIN (Personal Identification Number)
mber) to access any
funds while a credit card requires only a signature. Credit cards charge
harge interest for the
privilege of using them
em wh
while debit cards do not. Credit cards are limited
ited by
b the amount a
financial company is will
willing to lend you, while debit cards are more limited by the
available funds you have aat a given moment in an account you own.
Fees
• Debit cards don't have
ve dire
direct fees, but can cause overdraft charges on n your
you account since
they act like a check.
k. Cre
Credit cards charge interest like a loan. Users
ers of debit cards are
charged fees at ATM macmachines which are drawn directly from the account;
accou credit cards
do not have this charge.
rge. Is
Issuers of credit cards can charge a fee for the privilege
pr of using
the card; debit cards do not have this charge.

Legal
• Credit cards have many any co
consumer protection guidelines and regulations ations in place which
debit cards cannot bee held to. If a credit card is lost or stolen, the chance
ance of identity theft
is much higher than if a ddebit card is lost or stolen. Return policiess and protections are
almost non-existent for deb
debit cards where they are common for credit it card purchases.

Promotional
• The one thing debit cards ddon't do is promote themselves. Unlike debitbit cards,
car credit cards
try to get you to use them with gimmicks like cash back and rewards. CreditCr cards, like
loans, need to be shopped
hopped for the best rates and offers; unlike debit
ebit cards
c which are
basically all just the same type of access to your money. You don'tt get numerous
n offers
asking you to sign up for a debit card like you do with credit cards.

SMART CARDS
A smart card, chip card, or intintegrated circuit card (ICC), is any pocket--sized card with
embedded integrated circuits.
ts. Th
There are two broad categories of ICCs. Memor emory cards contain
only non-volatile memory ry sstorage components, and perhaps dedicated dedic security
logic. Microprocessor cards contai
contain volatile memory and microprocessor compoomponents. The card
is made of plastic, generally
erally polyvinyl chloride, but sometimes acryloni
rylonitrile butadiene
styrene or polycarbonate. Smart
art ccards may also provide strong security authentic
thentication for single
sign-on (SSO) within large organiz
rganizations.

Smart card is a pocket-sized card w

with integrated circuits in
it which can process information.
ation. It is also called as chip
card or integrated circuit card(IC
ard(ICC).This card is made of
plastic generally PVC, but somet
sometimes ABS (Acrylonitrile
butadiene styrene which is a comm
common thermoplastic).Smart
cards typically hold 2,000 to 8, 8,000 electronic bytes of
data—roughly several pages of inf
information.
Benefits of Smart Cards:

Smart cards are used for single sign-on to computers, laptops, data with ith encryption
en etc.It
provides with a means of effectiv
ffective business transactions in a flexible, secure
re and standard way.
Smart cards are widely usedd to pprotect digital television streams. The Malaysi
alaysian government
uses smart card technology in ide
identity cards carried by all Malaysian citizens
ens and
an resident non-
citizens.

Smart Card Technology:

Smart cards are secure, compact
mpact and intelligent data carriers. Though they
hey lack
la screens and
keyboards, smart cards shoulduld bbe regarded as specialized computers capable
pable of processing,
storing and safeguarding thousand
ousands of bytes of data. Smart cards operate with
ith special
sp read/write
devices, some of which mayy be aattached to computers and point-of-sale (POS)
POS) terminals using
standard cables and interfaces.

Why use Smart Cards:

Migrating to smart cards willll impa
impact toll agency operations in at least four ways:
ays:
1. It will separate payment from
rom mmanagement functions.
2. Toll agencies will benefit from technological innovations and cost savingss arising
arisi from
marketplace competition among ong sm
smart card and POS terminal vendors.
3. It will push the vendor commun
mmunity toward standardized ETC based on smart art cards.
ca
4. It will reduce or eliminate theft and fraud.

The most common smart cardrd appl

applications are:
• Credit cards
• Electronic cash
• Computer security systems
ystems
• Wireless communication
• Loyalty systems (likee frequ
frequent flyer points)
• Banking
• Satellite TV
• Government identification
cation
Smart cards can be used with a smart-card reader attachment to a persona
ersonal computer to
authenticate a user. Web browse
rowsers also can use smart card technology to
o supplement
supp Secure
Sockets Layer (SSL) for improved
proved security of Internet transactions.

Problems with Smart Cards:

The plastic card in which the chip is fixed is fairly
flexible and the larger chipp has higher probability of
breaking. Smart cards are often carried in wallets or
pockets which is a fairly harsh
rsh en
environment for a chip.
In addition to technical hurdles
dles is the lack of standards
for smart card functionalityy and security. To address
this problem, the ERIDANE E Pro
Project was launched by
The Berlin Group to developp a pro
proposal for “a new functional and security framework
frame for smart-
card based Point of Interaction (POI) equipment”, equipment that would be used, for instance, in
retail environments.

Signals
VCC - Power supply.
RST -Reset signal, used to reset the card's communications.
CLK -Provides the card with a clock signal, from which data communications timing is derived.
GND - Ground (reference voltage).
VPP - Programming voltage input - originally an input for a higher voltage to program persistent
memory (e.g., EEPROM), but now deprecated.
I/O - Serial input and output (half-duplex).
C4, C8 - The two remaining contacts are AUX1 and AUX2 respectively, and used
for USB interfaces and other uses

E- Credit Accounts
TERMS AND CONDITIONS COVERING THE ISSUANCE AND USE OF
E-CREDIT ACCOUNT
1. BPI E-CREDIT ACCOUNT- The BPI E-Credit Account is a form of credit card account
that has no physical presence. It is a payment mechanism for making transactions in virtual
payment environments such as the Internet and mobile telephony (WAP). The BPI E-Credit
Account is essentially a BPI MasterCard account number issued to a BPI MasterCard
Cardholder solely for use in remote payment environments. The BPI E-Credit Account will
be issued through a Reference Device. The device will carry information similar to a physical
card. However, the Reference Device can not be used for purchasing in the physical
environment or over the counter transactions that will require presentation of a physical
credit card.
This new account is linked to the BPI MasterCard credit card's Regular Limit. A pre-assigned
sub-limit linked to the BPI MasterCard's Regular Limit will be issued. Whenever the sub-
limit is used, the corresponding amount is also reduced in the BPI MasterCard's Regular
Limit. The Cardholder has the option to increase or decrease the pre-assigned sub-limit with
a maximum cap equivalent to his/her existing Regular Credit Limit. However, the Cardholder
hereby holds BPI Card free and harmless from any liability in such events where the credit
limit of the BPI E-Credit Account has been hacked or copied fraudulently after the
Cardholder initiates any credit limit adjustments.
2. CARDHOLDER RESPONSIBILITY - The Cardholder agrees to be bound to the terms
and conditions of the BPI E-Credit Account upon enrollment and/or receipt and/or use of the
BPI E-Credit Account. The BPI E-Credit Account number is strictly confidential and the
Cardholder agrees not to disclose this to any person. Any and all transactions done using the
BPI E-Credit account number shall be conclusively presumed to be made or authorized by
the Cardholder.
3. CARDHOLDER LIABILITY - The Cardholder's liability to BPI Card is absolute. The
existence of any claim or dispute between the Cardholder and any accredited establishment
shall not affect the Cardholder's obligation to pay the purchases, availments and cash
advances together with all interest, penalties, fees and other charges incurred thereon, if any,
arising from the use of the BPI E-Credit Account.
4. LOSS OF BPI E-CREDIT IT AACCOUNT NUMBER - The Cardholder agrees to immediately
report to BPI Card in writing the loss or theft of the BPI E-Credit AccountAccou number, it's
Reference Device or anyy dev device from which the BPI E-Credit Account unt number
nu has been
printed. Only transactionss mad
made after the receipt of the said written report
rt shall
shal be covered by
BPI Card's Lost Card Insuranc
surance.
5. SINGLE PURCHASE LIM LIMIT FOR INTERNET PURCHASES - The Single S Purchase
Limit for Internet Purchases
ases is the maximum cap that a Cardholder may y spend
spen using his/her
BPI E-Credit Account. The S Single Purchase Limit is/will be set by BPI PI Card.
Car In the event
that the Internet transaction
tion ha
has been disapproved because of the Singlee Purchase
Purc Limit, the
Cardholder hereby holdss BPI Card free and harmless from any liability ity arising
ari from such
transaction.
6. ACCREDITED INTERNET NET ESTABLISHMENT - Upon execution of the agreement that
BPI Card has entered intoto with MasterCard, the BPI E-Credit Account will be accepted at all
MasterCard accredited Intern
Internet establishments worldwide. However, r, BPI
BP Card is not
responsible/liable to the Card
Cardholder, if for any reason(s), the BPI E-Creditredit Account is not
honored or accepted.
7. CHARGE SLIPS AND D SASALES SLIPS FOR INTERNET TRANSAC NSACTIONS - For
transactions using the BPIPI E
E-Credit Account, the Cardholder will not require BPI Card and
the accredited Internet mercha
erchants of MasterCard to issue a charge/saless slip for any and all
type of Internet transactions.
tions. Hence, the Cardholder acknowledges that at the presentation of
the charge/sales slips to prove the transactions/availments in the Statementent of Account is not
required.
8. ERRORS OR DISPUTES TES ON STATEMENT OF ACCOUNT - The entries in the
Statement of Account aree pres
presumed true and correct unless the Cardholderder notifies
no BPI Card
in writing of any error thereon
hereon fifteen (15) days from Statement Date. If no errore is reported
within said period, the entries
ntries in the Statement of Account are conclusively
ively presumed to be
true and correct.

4.2: e-money security co concerns in E-commerce, authenticit enticity, privacy,

integrity, non-repudia
epudiation, encryption, secret key cryptogr
ptography, public
key cryptography,
y, SET
SET, SSL, digital signatures, firewalls

E-commerce securities

1. What is e-commerce secur security and why is it

important?
2. How to identify threats to e--commerce?
3. How to determine ways ys to protect e-commerce
from those threats?
4. What are electronic payment
ment systems?
5. What are the security require
requirements for electronic
payment systems?
6. What security measuress are uused to meet these requirements?
WHAT IS E-COMMERCE SECURITY
E-commerce security is the protection of e-commerce assets from unauthorized access, use,
alteration, or destruction. 6 dimensions of e-commerce security (Table 5.1)

1. Integrity: prevention against unauthorized data modification

2. No repudiation: prevention against any one party from reneging on an agreement after the
fact
3. Authenticity: authentication of data source
4. Confidentiality: protection against unauthorized data disclosure
5. Privacy: provision of data control and disclosure
6. Availability: prevention against data delays or removal

E-COMMERCE THREATS (Figure 5.4)

Threats: anyone with the capability, technology, opportunity, and intent to do harm. Potential
threats can be foreign or domestic, internal or external, state-sponsored or a single rogue
element. Terrorists, insiders, disgruntled employees, and hackers are included in this profile
(President's Commission on Critical Infrastructure Protection)

Concern 2001 2000

Loss of Privacy/confidentiality, data misuse/abuse 28% 25%
Cracking, eavesdropping, spoofing, rootkits 25% 20%
Viruses, Trojans, worms, hostile ActiveX and Java 21% 26%
System unavailability, denial of service, natural disasters, power interruptions 18% 20%
2001 Information Security Industry Survey

1. Intellectual property threats -- use existing materials found

on the Internet without the owner's permission, e.g., music
downloading, domain name (cyber squatting), software
pirating
2. Client computer threats
– Trojan horse
– Active contents
– Viruses
3. Communication channel threats
– Sniffer program
– Backdoor
– Spoofing
– Denial-of-service
4. Server threats
– Privilege setting
– Server Side Include (SSI), Common Gateway Interface (CGI)
– File transfer
– Spamming

COUNTERMEASURE (Figure 5.5)

A procedure that recognizes, reduces, or eliminates a threat

1. Intellectual property protection

– Legislature
– Authentication
2. Client computer protection
– Privacy -- Cookie blockers; Anonymizer
– Digital certificate (Figure 5.9)
– Browser protection
– Antivirus software
– Computer forensics expert

3. Communication channel protection

– Encryption
* Public-key encryption (asymmetric) vs Private-key encryption (symmetric) (Figure
5-6)
* Encryption standard: Data Encryption Standard (DES), Advanced Encryption
Standard (AES)
– Protocol
* Secure Sockets Layer (SSL) (Figure 5.10)
* Secure HyperText Transfer Protocol (S-HTTP)
– Digital signature (Figure 5-7)
Bind the message originator with the exact contents of the message
–A hash function is used to transform messages into a 128-bit digest (message digest).
–The sender’s private key is used to encrypt the message digest (digital signature)
–The message + signature are sent to the receiver
–The recipient uses the hash function to recalculate the message digest
–The sender’s public key is used to decrypt the message digest
–Check to see if the recalculated message digest = decrypted message digest

4. Server protection
– Access control and authentication
* Digital signature from user
* Username and password
* Access control list
– Firewalls (Figure 5.11)
International Computer Security Association's classification:
· Packet filter firewall: A check IP address of incoming packet and rejects
anything that does not match the list of trusted addresses (prone to IP spoofing)
· Application level proxy server: examines the application used for each
individual IP packet (e.g., HTTP, FTP) to verify its authenticity.
· Stateful packet inspection: examines all parts of the IP packet to determine
whether or not to accept or reject the requested communication.

HOW TO MINIMIZE SECURITY THREATS (Figure 5.12)

1. Perform a risk assessment à a list of information assets and their value to the firm
2. Develop a security policy à a written statement on:
* what assets to protect from whom?
* why these assets are being protected?
* who is responsible for what protection?
* which behaviors are acceptable and unacceptable?
3. Develop an implementation plan à a set of action steps to achieve security goals
4. Create a security organization à a unit to administer the security policy
5. Perform a security audit à a routine review of access logs and evaluation of security
procedures

ELECTRONIC PAYMENT SYSTEMS

A medium of payment between remote buyers and sellers in cyberspace: electronic cash,
software wallets, smart cards, credit/debit cards.

Offline payment methods

Number of transactions: cash (42%), check (32%), credit card (18%) (Figure 6.1)
Dollar amount: check(52%), credit card (21%), cash (17%) (Figure 6.2)

Payment Costs Advantages Disadvantages

Properties
systems
Electronic – 31% – Internet cash – Efficient – Money
cash of US populatio transfer: no – Less costly laundering
e.g., PayPal n do not have fixed cost of
credit cards hardware
– Forgery
– micropayments – No distance – Low
(< $10) costs acceptance
– Independent – Small – Multiple
– Portable processing fee standards
– Divisible to banks
Electronic – Stores shipping – Lengthy – Enter – Client-side
wallets & billing download for information wallets are not
e.g., Passport information client-side into checkout portable
– Encrypted wallets forms
digital automatically
– Privacy issue
for server-side
certificate
wallets
Smart cards – Embedded – Time value of – Convenience – Need a card
e.g., Blue microchip money reader
storing
encrypted
– Card theft
personal – Low
information acceptance
Credit cards – Line of credit – Unpaid – Most popular – Cost
e.g., VeriSign – Purchase balance charge – Worldwide
dispute – $50 limit on acceptance
 protection frauds
– Secure – Processing fee
Electronic
Transaction
(SET) Protocol

SECURITY REQUIREMENTS
1. Authentication of merchant and consumer
2. Confidentiality of data
3. Integrity of data
4. Non-repudiation

SECURITY MEASURES
1. Secure Electronic Transaction (SET) protocol: developed
jointly by MasterCard and Visa with the goal of providing a secure payment environment for
the transmission of credit card data.

Features SSL SET

Encryption of data during transmission Yes Yes
Confirmation of message integrity Yes Yes
Authentication of merchant Yes Yes
Authentication of consumer No Yes
Transmission of specific data only on a "need know" basis No Yes
Inclusion of bank or trusted third party in transaction No Yes
No need for merchant to secure credit card data internally No Yes

SET payment transaction:

∗ A shopper makes a purchase and transmits encrypted billing information with his/her digital
certificate to the merchant.
∗ The merchant transfers the SET-coded transaction to a payment card-processing center.
∗ The processing center decrypts the transaction.
∗ A certification authority certifies the digital certificate as belonging to the shopper.
∗ The processing center routes the transaction to the shopper's bank for approval.
∗ The merchant receives notification from the shopper's bank that the transaction is approved.
∗ The shopper's payment card account is charged for the transaction amount.
∗ The merchant ships the merchandize and transmits the transaction amount to the merchant's
bank for deposit.

2. Disposable credit numbers: one-time-use credit card numbers (private payment number) are
transmitted to the merchant
– Register with American Express or Discover
– Download software (a Private Payment icon tray will be displayed on the screen)
– Shop online
– Click on the Private Payment icon
– Log-in
– Select the credit card to be used
– View unique, one-time-use credit card number and expiration date
– Enter the one-time-used credit card number and expiration date into merchant's standard form

E-commerce Security Encryption Methods for secure e-commerce websites

A. Public Key Infrastructure
An effective tool for ensuring the safety of e-commerce
transactions, public key infrastructures (PKI) combines a digital
signature and certificate authority (CA), which can be public or
private—a business acting as its own CA is private while a public
one offers its services to businesses and provides secure key
management. The role of a CA is built on the concept of trust,
since web entities do not have sufficient trust established between
them to perform business transactions. PKI is based on public key
(asymmetric key) encryption, where a receiver generates an asymmetric key pair (private and
public). The public key is shared with other participants who wish to encrypt data with the
receiver while the private key is used to decrypt the data, addressing key management problems
since no shared keys are required. Major US vendors in this field comprise VeriSign Inc and
Global Sign. As the foundation of PKI, public key cryptography refers to the generation,
distribution, organization, and the control of cryptographic keys. RSA, the commonly used
algorithm in public key cryptography, implements keys based on the product of two large prime
numbers.

This method attributes to its cryptographic strength since factoring large composite numbers is
highly challenging, given a sufficiently large key length. Using the public and private key
mentioned previously, it enables encryption of cleartext data with the public key and decryption
with the private one. The RSA algorithm generates public and private key pair by the following
method. Two sufficiently large prime numbers are selected and multiplied together with its
product stored, or n = pq, where n is also known as the modulus. Another number e less than n is
chosen, with the characteristics of being relatively prime to (p-1)(q-1); in other words, e and (p-
1)(q-1) only have 1 as the common factor. An additional number d is selected such that (ed-1) is
divisible by (p-1)(q-1) where ed = 1 mod (p-1)(q-1). In this case, e and d correspond to the public
and private exponents respectively while the public key is the pair (n, e) and the private key is
(d).

Additionally, public key cryptography (or asymmetric encryption) is implemented with a hashing
algorithm such as Secure Hash Algorithm (SHA-1) or Message Digest 5 (MD-5) to provide an
efficient integrity mechanism in e-commerce websites. SHA-1 has emerged as the preferred
method when weaknesses were found on MD-5 algorithm, Applied to e-commerce. PKI secures
the integrity of posted prices, identification and authentication for a large customer base,
confidentiality of customer and transaction information, and non-repudiation to minimize
disputes.

Although PKI attempts to solve the man-in-the-middle problem and other cybercriminal acts, the
system is not without its flaws. As public key cryptography requires expensive computation
particularly for larger data transmissions, RSA is preferred only for exchange keys while a
conventional algorithm such as DES is used for the bulk of the content. Additionally, critics
argue that PKI is not essential or does not solve e-commerce security. It has been argued that
although a CA handle key management well, consumers cannot necessarily trust a certificate
from the particular CA for a particular purpose such as making a micropayment, questioning the
essence of trust and authority of CA vendors.

B. Digital Signatures
Based on the public-key encryption method
combined with data hashing functions such
as MD-5 and SHA-1, digital signatures are
implemented to verify the origin and
contents of the online transaction, translating
to consumers proving their identity to
vendors in the transaction and providing
non-repudiation features. They address the
inherent problem in public key encryption in
which all recipients have the public key.
Setting the foundation for digital certificates, digital signatures enable the transaction source to
be traced and reinforced data integrity during transmission, invalidating the signature if data is
tampered before it reaches the destination.

Digital signatures are implemented based on the RSA algorithm, and works inversely from
encryption. They are generated by encrypting cleartext using the sender’s own private key, and
decrypted at the recipient side using the sender’s public key. Signing data with a hash algorithm
shows the signing process incorporating the digital signature into a certificate to produce a
digitally-signed file. A one-way hash function, SHA-1 provides a mechanism that simplifies the
hash computation from some data but difficult to determine any data from a computed hash
value, eliminating the need for a secret key. Signing a hash instead of the whole document results
in efficiency as the signature is much smaller in size speed up the hashing process. It also leads
to compatibility of the hash function to be converted into the proper format, and integrity of the
text since it does not have to be separated in blocks.
Despite its hashing strength,, digit
digital signatures are still vulnerable against attacks.
attack If the private
key is compromised by a thirdhird pa
party, the message can be intercepted and signed
signe with another
private key, enabling the third
ird pa
party to pose as the original sender. Other known
know attack model
includes known message attacks
acks aand adaptive chosen message attacks resulting
ting in unreliability of
digital signatures. The vulnerabilit
rabilities can be prevented by using the key exchange
change method of the
public key system. A senderr can eencrypt the message again with the receiver’s public
pu key before
sending it, while the receiver
ver de
decrypts the message with his or her own n private
priv key before
encrypting it again with the sender
sender’s public key.

C. Digital Certificates

Similar to the concept of a digital passport, digital certificates are files that distinctively
distin identify
users and websites to enablee conf
confidential and secure communications using g digital
digit signatures to
associate a public key with the wewebsite identity. Typically, the signature is issued and created by
a CA A public-key certificate te issu
issued by a CA such as that shown in Figure 2. Digital
Di certificate
issued by a CA verifying Amazo
Amazon.com specifies a validity period and an expired exp certificate
should not be trusted, and always includes the name of the e-commerce website, websit name of the
issuing CA, a serial number, er, an
and most importantly, the digital signaturee of the t CA. Before
issuing the certificate, the CAA wo
would request contact information of the websiteebsite from a public
domain name registrar and verify that the published address matches the email mail address
a supplied
in the certificate request. A com
common standard used for defining digital certificates
certifi is X.509,
which regulates the contents of the certificate before it is signed by a CA
 Although digital certificates
are widely adopted by major
businesses, certificate practices
may not be completely secure.
Although digital certificates
guarantees the uniqueness of
the website that users are
interacting with, the
relationship between the
certificate owner, the website
operator, and the website
content owner may be vague
and therefore not guaranteed.
Research has shown that
authentication and
authorization should also be
separated as much as possible
even though digital certificates
accommodate authorization
information within their fields.

D. Secure Socket Layer (SSL)

Secure Socket Layer protocol is the web standard for
authenticating web sites and encrypting the communication
channel between users and web servers. Based on the
implementation of PKI and digital signatures via web server
certificates that enable SSL encryption and authentication, SSL
certificates establishes e-commerce trust by performing SSL
server authentication and SSL encryption. It uses a private key
to encrypt data transferred over the connection, encrypting via
40-bit or 128-bit encryption methods, which is reinforced by SSL certificates (128-bit) for
unique website identification.
When a user enters a secured site, the URL changes to “https://” instead of the regular “http://”,
which is simply http over an encrypted SSL connection. At SSL server authentication, server
certificates verify a web server’s identity, while the web browser checks that the server
certificate and public ID are valid and have been issued by a CA. This step is essential during
credit card transactions when the user needs to verify the vendor server’s identity. At the SSL
encryption stage, a secure channel is established and enables data transmission between the web
browser and server to be encrypted by sender and decrypted by receiver. The transmission is
Protected and maintains data integrity of private data such as credit card information.
E. Secured e-commerce transaction flow
Combining the various aspects of PKI technology and
applying it to an e-commerce website like
Amazon.com, consumers are first redirected to an
SSL-based checkout page containing product
information and any session-based information
associated with the purchase. After entering payment
information such as credit card information, SSL
encrypts the web session to prevent data interception.
The user’s web browser requests the digital certificate
from Amazon.com to verify its authenticity by examining the digital signature on the certificate
against a list of CA. After the web server successfully authenticates, the user’s web browser
generates a unique session key to encrypt data transmission using asymmetric encryption, after
which it encrypts the session key with the public key such that only Amazon.com can read the
session key, and finally sends it to the server which then decrypts the session key using its own
private key.

The web browser then sends a message to Amazon.com server informing that future
transmissions will be encrypted with the session key. Responding to this step, the server informs
the user’s browser that future messages from the server will be encrypted with the session key,
after which an SSL-secured session is established. Applying symmetric encryption to encrypt
and decrypt transmissions within the secured channel, the transaction is rendered successful. The
session key is then eliminated after the established session is ended. When Amazon.com
presented its digital certificate to a user’s web browser, which is equipped with a list of
certificate authorities and other information for validation purposes, the web browser examines
the certificate and acknowledges that it claimed to be for Amazon.com. At this point, if the URL
entered by the user does not match the name on the certificate, the browser returns an alert.
Consequently, the web browser checks that the certificate was signed by a CA called VeriSign,
and having found it on the list of pre-installed CA, will verify the signature from VeriSign, or
otherwise issue an alert that the certificate or signature is invalid.

External factors affecting e-commerce security

A trust infrastructure sets the foundation of e-commerce
transaction activities, but users of these websites have to remain
vigilant for red flags. Digital certificate warnings have been
shown to be ineffectual as a high majority of users surveyed
ignore expiration notices prompted by the browser, with tech-
savvy users more likely to ignore it. Expired certificates could
indicate a man-in-the-middle attack and compromise users’
information. Additionally, a domain mismatch warning may
signal a phishing attack but could sometimes be ignored by
users.Web browsers, the only application known to connect users and e-commerce websites, may
expose users to potential risks. Even secure websites are vulnerable to forged security certificates
by sophisticated cyber criminals to bypass built-in verification methods found in web browsers
without the user warned about the problem. Exploiting SSL technology, the vulnerability
enables a forged authentication certificate to display the padlock icon common to a secure
website, and is attributed to a weakness in the MD5 algorithm, which is a standard cryptographic
function used to verify SSL certificates.

4.3. SUMMARY

MasterCard
MasterCard is a product of MasterCard International and along with VISA are distributed by
financial institutions around the world. Cardholders borrow money against a line of credit and
pay it back with interest if the balance is carried over from month to month. Its products are
issued by 23,000 financial institutions in 220 countries and territories. In 1998, it had almost 700
million cards in circulation, whose users spent $650 billion in more than 16.2 million locations.

VISA Card VISA cards is a product of VISA USA and along with MasterCard is distributed by
financial institutions around the world. A VISA cardholder borrows money against a credit line
and repays the money with interest if the balance is carried over from month to month in a
revolving line of credit. Nearly 600 million cards carry one of the VISA brands and more than 14
million locations accept VISA cards

American Express The world's favorite card is American Express Credit Card. More than 57
million cards are in circulation and growing and it is still growing further. Around US $ 123
billion was spent last year through American Express Cards and it is poised to be the world's No.
1 card in the near future. In a regressive US economy last year, the total amount spent on
American Express cards rose by 4 percent. American Express cards are very popular in the U.S.,
Canada, Europe and Asia and are used widely in the retail and everyday expenses segment.

Diners Club InternationalDiners Club is the world's No. 1 Charge Card. Diners Club
cardholders reside all over the world and the Diners Card is a alltime favourite for corporates.
There are more than 8 million Diners Club cardholders. They are affluent and are frequent
travelers in premier businesses and institutions, including Fortune 500 companies and leading
global corporations

JCB Cards -The JCB Card has a merchant network of 10.93 million in approximately 189
countries. It is supported by over 320 financial institutions worldwide and serves more than 48
million cardholders in eighteen countries world wide. The JCB philosophy of "identify the
customer's needs and please the customer with Service from the Heart" is paying rich dividends
as their customers spend US$43 billion annually on their JCB cards.

Grace / Interest Free Period The number of days you have on a card before a card issuer starts
charging you interest is called grace period. Usually this period is the number of days between
the statement date and the due date of payment. Grace periods on credit cards are usually 2-3
weeks. However, there is likely to be no grace for balances carried forward from previous month
and fresh purchases thereafter if any.
Standard segregation of credit cards

• Standard Card - It is the most basic card (sans all frills) offered by issuers.

• Classic Card - Brand name for the standard card issued by VISA.

• Gold Card/Executive Card - A credit card that offers a higher line of credit than a
standard card. Income eligibility is also higher. In addition, issuers provide extra perks or
incentives to cardholders.

• Platinum Card - A credit card with a higher limit and additional perks than a gold card.

• Titanium Card - A card with an even higher limit than a platinum card.

The following are some of the plus features of credit card in India

• Hotel discounts
• Travel fare discounts
• Free global calling card
• Lost baggage insurance
• Accident insurance
• Insurance on goods purchased
• Waiver of payment in case of accidental death
• Household insurance

Some facts of credit cards

• The first card was issued in India by Visa in 1981.

• The country's first Gold Card was also issued from Visa in 1986.

• The first international credit card was issued to a restricted number of customers by
Andhra Bank in 1987 through the Visa program, after getting special permission from the
Reserve Bank of India.

• The credit cards are shape and size, as specified by the ISO 7810 standard. It is generally
of plastic quality. It is also sometimes known as Plastic Money.

4.4: Glossary

As the internet experiences progress and innovation, small and big companies alike are moving
their goods and services online as a channel to increase revenues. Internet commerce, or e-
commerce, is claimed to have generated $30 billion in 2005 Increasing financial aid .commercial
transactions online have led a rise in cybercrimes which take advantage of security flaws in
online payment systems to steal sensitive data for financial thefts. Consumer confidence has been
adversely affected, with 37% of e-shoppers stopped buying goods online because of identity theft
concerns, resulting in a $40 billion loss in online sales Most consumers consider security features
as critical factors influencing their decisions to conduct financial transactions online

As businesses turn electronic, digital credentials has become a requirement and information
security an inevitable necessity to guard the online businesses. E-commerce relies on encryption
to secure data transmission by controlling data access and protect information on the internet and
ultimately boost consumer confidence. Encryption is the encoding of data using an algorithm
such that it is incomprehensible to anyone in the event that the data transmission is intercepted,
unless the key is known to enable file decryption. By implementing encryption, integrity is
maintained while digital authentication is enforced, thus allowing both customers and merchants
to verify the identity of the other party, a concept fundamental to secure online credit card
transactions. The credibility of an e-commerce website may be negatively impacted if theft of
customer information occurs, especially risky since 90% of all online payments are dealt by
credit cards.

This part will explore public key encryption methods and its impact on e-Commerce, discussing
the application and implementation on this field along with its strengths and weaknesses,
followed by an analysis of established trends such as Public Key Infrastructure in eCommerce to
enhance security.

Conclusion
E-commerce has become heavily reliant on PKI technology to boost consumer’s confidence and
safeguard their most fundamental assets—business data and customer’s personal information.
Public key encryption emerged as superior over private key encryption for online transactions as
it eliminates the need for secret key exchange. Combined with the strengths of digital
signatures/certificates and the SSL protocol, a consumer’s online experience becomes more
secure through key establishment and server authentication, reducing the risks associated with
online data theft.

Nevertheless, flaws present in these technologies should not make vendors and consumers
complacent. Vendors can devise a data security plan to maintain the privacy, integrity,
authentication, and non-repudiation of their e-commerce strategies, which may include the
implementation of firewalls to protect servers and networks or setting up the Kerberos protocol
to minimize insider’s threats, among other pertinent policies. Consequently, online consumers
should remain aware of their online shopping habits and be alert of anything that may be amiss
before completing a purchase.

4.5. CHECK YOUR PROGRESS

1: What are the differences between Credit Card & Debit Cards?
2: What is Smart Card?
3: What is mean by digital certificate?
4.6. REFERENCE

• John Palfrey, “Security and the basics of encryption in e-commerce

• VeriSign, “Building an e-commerce trust infrastructure”, 2000
• Forrester Research, “The checkout tools that boost eBusiness”, 2007
• Gartner, Inc., “Banks need to strengthen user authentication while appeasing consumers”,
2008
• Mark Norman et al, “Are personal digital certificates really usable and scalable?”, 2006

4.7. ANSWER TO CHECK YOUR PROGRESS

1: Read 4.1.
2: Read 4.1
3: Read 4.2
 Unit 5:
Content
5.1: Marketing strategies.
5.2: Creating web presence, advertising, customer service and support.
5.3: Web branding strategies, web selling models
5.4: Summary
5.5: Glossary
5.6: Check Your Progress
5.7: Reference
5.8: Answer to Check Your Progress

5.1: Marketing Strategies

Five Key Marketing Strategies for Web Business Growth

If you expect to achieve sustained growth for your
eCommerce business then you will need an Internet marketing
plan to get there. Growing a profitable Web Business is a
strategic process that requires long range commitment, careful
planning, and on-going execution and patience. It's vital that
you know exactly what you want to accomplish and that you
have done your research to understand what it will take to get
there. Of course you need to have a website that is optimized and tested to convert traffic, and
then you need to devote time to developing and executing short-term and long-term promotional
strategies. These strategies must stand on their own as well as work together to get you the best
results.
Here are five key strategies you can use to advance your business and improve your profit
margin:

#1. Always Look For Opportunities to Increase Sales

Let's face it, sales drive business and sales come from customers; therefore, the hunts for
new customers should be phase one of an ongoing three-phase marketing approach that
every online business owner should embrace.
Phase two is to follow up with these new customers from time to time, and introduce
them to additional offers. The objective of this second phase is to get them to buy from
you more often.
The final phase of this three-pronged strategy is to offer expensive items, or bundle
multiple items into higher-priced packages. This will give your customers more
opportunities to make larger purchases.

#2. Find the Best Use for Your Marketing Budget

After you have identified your market demographic, fixed your goals and decided on a
promotional strategy for reaching potential customers, the next step is to figure out how
 to maximize your budget
udget and get the job done without over spending. ing. Even
E though the
exact process will vary
ry from business to business, the principle remains
ins the same.
You want to expose your pproduct or service, as often as possible, to consumers
cons who will
derive the most benefitefit ffrom it. Studies show that the average consumer
consu will see a
promotion about five to sev
seven times before taking action on the offer.
So instead of blowingg your budget on a single opportunity to reach your
our select
se group, it is
much wiser to get everyon
veryone's attention with repeated promotions. Use se as many different
forms of advertising as yyou can afford and squeeze the most outt of your y marketing
dollars.
* Use Earth Traffic Webs
Website Analytics to track your website visitors rs and search engine
traffic and sales in real--time. Watch each visitor as they arrive at your yo website and
navigate your site and lea learn ways to improve your online business. Using both your
general website statistics
istics aand Earth Traffic will be the key to understan
erstanding how your
online business workss and ways you can increase traffic.

#3. Invest in a Virtual Assistant

istant
This is an opportunityity to outsource various redundant
tasks to someone who is capable, reliable and
trustworthy. The bigg adva
advantage to you is you'll have
more time to devotee to ac activities that generate income
and help you grow yourour bu
business.
A virtual assistant works
orks from his or her office as an
independent contractortor an
and is responsible for whatever
administrative or operation
erational responsibilities you assign.
Compensation can bee agre
agreed upon at an hourly rate, per
assignment or by retainer.
ainer.
If you are not yet att the sstage where you can afford to pay a virtualual assistant,
ass you can
consider a suitable barter
arter aarrangement with a subscriber or a customer.
er. You
Y can also ask
a family member or a frien
friend for help. You can't do it all yourself and
d you shouldn't even
consider that option forr the long-term.
* Earth Skater provides
vides expert service to off load your work burden.burden Whether it's
updating website products
oducts and content, managing and/or providing your marketing and
advertising campaigns,ns, or just providing consultation to your business
siness; Earth Skater
provides service secondnd to none in both expertise and affordability.

#4. Use the Power of Emaill to Co

Convert Visitors Into Customers

Email marketing is one of the mo most economical and reliable ways to build
ld a relationship
re with
visitors and eventually convert
vert th
them into buyers. It is an effective
tool for staying in touch andd dev
developing the level of comfort and
trust that is necessary beforee they will agree to do business with
you.
You can use email to con convince your subscribers of your
expertise in your niche.
che. TThe more they come to accept
you as an authority, y, the greater your credibility will
become and the easierer it w
will be for you to make sales.
 Plus, email is a very handy tool for keeping customers abreast of new products, special
promotions and the latest announcements about your business.
* Earth Skater recommends iContact, read more about Earth Skater Email newsletter
marketing here.

#5. Develop a System for Everything You Do

Make sure to design methods and procedures that simplify and expedite important aspects
of your business operation. Very often these systems will evolve from trial and error, but
when they have been perfected they should become standard procedure.
The most efficient systems are those that get you to your objective as quickly as possible,
for as little money as possible and with the least possible effort.

Advantages of E-commerce
E-commerce has many advantages for most organizations that choose to use this means of
operation. One of the biggest advantages is it allows reduced warehousing and inventory cost
due automation. Ecommerce is also independent of size, for the most part; any organization can
operate over the Internet. The Internet also reduces the advantage of large companies over small
companies, because it somewhat levels the playing field (Wilder, 1998). Organizations can
reach global areas that would have been otherwise difficult. This is good because it allows
global communication and products to people who can’t purchase your product in their home
region. E-commerce companies will also increase their accessibility, it creates a twenty- four
hour operation, and this allows people to shop when it’s convenient to them (Pallab, 1996). E-
commerce also increases advertising and it allows a broader scope of segments. It also is self-
selective, me aning people who are on your site are interested; they want to learn about your
organization or product (Wehling, 1996). Maybe the biggest advantage of e-commerce is its one
to one marketing (Wehling, 1996). E-commerce also allows organizations to gather information
on its customers or potential customers. It’s also a unique form of marketing research that is
fairly inexpensive (Pa llab, 1996).

Problems of E-commerce
With such rapid growth of the Internet, distribution has become a difficult task for companies to
manage. With such an increase in demand, many companies are not able to handle the number
of orders efficiently. The demand is putting a burden on the inventory handling process,
packaging, and residential delivery functions.

Some of the distribution problems are not the fault of e-commerce companies, but the delivery
service they choose. The delivery companies are not handling the increase in demand efficiently,
but their customers blame the e-commerce company. This problem is vital for an organization to
overcome; customers will evaluate the total experience of the online purchasing as a whole. For
example, if a product is purchased, and the e-commerce company does everything correctly but
the shipper doesn’t perform their task properly, it will affect the technical outcome of the
satisfaction level. Customers will rate the transaction as a whole, so choosing the correct shipper
is vital.

Many transactions are done via the Internet, which can take an especially long time. Customers
will at some point forget the transaction if they are required to wait extended periods, especially
if the product is accessible at local retail vendors. Managing the time required for a customer to
complete a transaction affects potential sales (Harvard Business Review, 2000). Many times
why customers don’t finish the transaction is due to extended wait of finalizing the transaction
(Harvard Business Review, 2000).

The lack automated inventory and shipping systems are

problems for e-commerce companies. This lack of technology
really stresses the ability of a firm to meet the demands of
customers in a concise time period. According to a Federal
Express executive, many companies will crash before they
upgrade to automation logistic systems (Wilson, 1999). Many
of the early e-commerce companies outsource their order
checking and distribution functions (Haywood, 1989). This is
proved to be a problem for some companies because of shipping
cost has proved to be a big deterrent of customers buying online
and ware house and distribution systems were not set up to
handle e-commerce business.

Internet sites can also be hard to find for some patrons, which can deter potential custo mers
from buying online. Even if the potential customer knows what they want, finding the web site
that offers the best price can be a lengthy task. Using search engines such as Yahoo or Excite
can help, but they search in a very broad manner, sometimes it takes too long to find the web
site. This may cause buyers to buy the product at local retail vendor (Mardesich, 1999).
According to Resource Marketing, their research co nfirms this problem. In their recent study of
45 search sites, only one third proved to generate relevant sites (Mardesich, 1999).

When a customer does find a product that they want, it is difficult to get a phys ical grasp of the
product(Mardesich, 1999). There is a lot of intangibility when purchasing online, such as buying
items that are sold in sizes. Not being able to try on products is a barrier that e-commerce must
overcome to increase sales to compete with local retail outlets.

Although e-commerce separates itself from the traditional retail outlet, it still must compete with
them. For example, when purchasing an item online, the price of the actual good offered is often
cheaper online, but the high cost of shipping decreases the advantage for buying online. If a
compact disk cost five dollars on line and then cost six dollars to ship, it ends up costing about
the same amount as priced in local retail outlets (Wilson, 1999).

Customer service online is a current drawback of e-commerce. Many companies have poor
online service. According to Resource Marketing, their results show that only 10 out of 45 sites
offered fair warranty and return services (Mardesich, 1999).

E-commerce companies also must deal with seasonal changes; their inability to handle high
demand p eriods, such as Christmas is an important challenge. Not handling the demand
increase effectively reduces the confidence of online buyers or potential online buyers.
Some e-commerce companies have been involved in unethical marketing tactics. E-commerce
Company, Buy.com has been under fire for false advertising (Foster, 1999). With Buy.com
using tactics such as, bait-and-switch, it reduces the image of e-commerce as a whole. Buy.com
is also known to post really low prices to lure customers into the site, and then tell the customers
that the promotion has expired (Foster, 1999). Some companies are also selling their customer
list, creating dissatisfaction among current online buyers. External factors are something that
affects the entire industry.

Applying the Marketing Mix

Product
One of the main issues of concern is the intangibility of
purchasing online. The intangibility is caused by not being
able to focus on tangible aspects when purchasing online.
The customer can’t actually touch or feel a product, which
increases the risk of the purchase. The key to reducing
intangibility is creating tangible cues that the customer
recognizes. Creating a positive brand image will reduce
the risk (Kurtz, 1998). For example, buying a product that
has a quality image will reduce the risk for customers.
Companies need to focus on creating a positive and
reliable brand name.

Stressing the actual or perceived benefits received from the product can also reduce intangibility.
Relaying to the customer that they will be very satisfied with the benefits of the product is
important. For example if a company sales golf clubs online, they want to stress concept tha t
they will hit the ball farther and straighter, which will allow the person to increase their
enjoyment when playing golf. Also, focusing on the actual components of the product is
important. Explaining the benefits of the clubs grip and haft in the product will also redirect the
attention away from the intangible aspects.

Focusing on advantages of buying on line is also important for companies to achieve increased
sales. On the web site it is important to convey the convenience of buying your product online.
Conveying the message that your product is conveniently accessible, lets the customer
understand that they don’t need to stand in lines or deal with other customers. Long lines and
other customers can keep customers New Marketing Strategy for E-Commerce from buying or
decrease the amount they are willing to purchase. Explaining the convenience of buying on line
is a good way to reduce the problem of intangibility.

There are some instances where the convenience of online buying can be diminished. When the
customer finally decides to purchase a good it’s important for this transaction to be quick and
concise (Foster, 1999). The quicker this action can be done accurately the better. If it takes a
long time for this action, customers may defect and buy the product through a local retail outlet.
Companies need to be aware of this and implement the proper technology to assure that this
barrier is minimized.
Since products can’t be seen in person, it creates a barrier between the company and the buyer.
A possible way to overcome this factor is through technology. By providing actual pictures of
the product, it will allow the customer to get a better understanding of the products. If the web
site has high quality pictures, it will reduce the perceive risk, which can increase the sales for a
company.

Products that are produced in different sizes, such as clothing, create a problem for companies.
Custo mers that want to buy the product may not because they are not sure how the product will
fit. This creates a problem for the company, it is important to have a lenient return policy, but
even more importantly, they should purchase software that helps in sizing (Mardesich, 1999).
This software will allow customers to input their measurements and the web site will recommend
which size is best for them (Mardesich, 1999). This type of technology will reduce the risk
involved, which will increase the number of products sold.

The service involved is also a barrier that must be understood and managed correctly
(Mardesich, 1999). Having a lenient or fair return system will lower the perceived risk involved.
The customer is more likely to purchase the product if they know that returning the product will
be of minimal hassle and at no expense. Providing the high service is directly related to
increasing sales. Companies should also pay the postage to have the product returned. Paying
the postage will again, lower the perceived risk, will most likely help in stimulating sales. Of
course, this can only prove to be beneficial if the product doesn’t have a high defective rate.

Place

Some of the distribution problems are uncontrollable

at this point in the life cycle of the Internet. In some
instances the problem of delivering the product to the
customers isn’t the fault of the online company.
Nearly every online company does choose to
outsource the delivery function, which at this point is
the most efficient. Online customers are having a
difficult time satisfying their customers, because of
something that isn’t their fault. The company that the
y select to ship their product isn’t handling the
demand. For high volume comp anies this can be
easier to solve.

There is a definite need for companies to manage the

relationship with the shipping companies. The bigger the company the more power it posses in
the supply chain. They have the ability to hurt the shipping company by choosing to change
shippers. Even though there are few shipping companies, the online company can claim they
will switch, if their quality of service doesn’t increase. By threatening a switch, it will hopefully
create better service for a large company.

One of the biggest problems with online buying is the lack of automated inventory and
warehousing systems (Wilson, 1999). The lack of automation really hinders in the efficiency
and speed of meeting the customer needs. For small companies, it is a good idea to outsource the
warehouse and distribution functions, because they aren’t efficient enough to meet customers’
needs. Outsourcing will reduce the actual profit, because it is expensive (Wilson, 1999). Over
time it will prove to be beneficial, because it will help in building loyalty. The most important
thing to understand is choo sing the correct outsourcer. Companies want to pick an outsourcer
that isn’t overbooked with clients so they can efficiently handle demand requirements

Large online companies really need to consider automating the inventory and warehousing
functions. This may be the best way to stay competitive in the future. The use of logistics
consultants is a good strategy to assist in choosing an automated system that matches company
needs.

Large companies that use outsourcers should look into instituting their own logistics system.
Even though it is working for the company, it may be reducing profit (Wilson, 1999). Each part
of the supply chain makes a small profit in the online commerce. The actual sale of the product
makes a small profit, the warehousing makes a small profit, and the packager makes a small
profit. Add up these areas and that means there is a larger profit to be made by taking over these
functions (Wilson, 1999). If a company can do these functions themselves they will increase
their profits, because they can do it cheaper than an outsourcer.

For companies that don’t outsource, automation is important in staying competitive. For
example, in an article from Transportation and Distribution, Nortel Networks found they couldn't
reduce their total cost by implementing their own procurement system (Transportation &
Distribution, 1999). The new systems resulted in increased accuracy in packaging and inventory
functions, and increase speed in the distribution system. Nortel Networks was able to process
package weight information, compute package and shipping cost, and create a carrier complaint
label in less than four seconds (Transportation & Distribution, 1999). The old system ran
continuously just to keep up with demand, but the new system, can do the same job in sixteen
hours, with 99.8% accuracy (Transportation & Distribution, 1999).

Managing warehouse systems can be improved through the use of software. Warehouse-
management software systems are now available for online companies to purchase (Gilber,
1999). Companies such as EXE Technologies and Yantra are offering e-commerce order
fulfillment packages (Gilber, 1999). These software packages can increase the efficiency by
handling orders and tracking the delivery function. These are possible solutions that a company
can do to implement automation in the company.

Price
Price is very important when dealing with e-commerce problems. Price can be a key issue when
trying to increase demand or when decreasing demand. Price is definitely a weapon of choice by
many companies (Holden, 1998). The two typical pricing methods are skimming and
penetration. Skim pricing is charging a high price when the product is relatively new, in hope of
making more profit. Penetration pricing is deployed to capture a large market share. The theory
is based on creating a large market share, by being lower than competitors (Holden, 1998).
To increase demand, e-commerce companies need to focus on penetrating the market. This will
work best for products that are in the introduction and growth stage (Holden, 1998). If the
product is near the maturity stage, lowering the price won’t increase profits very much. For
relatively new products, offe ring the product below competitors will increase demand.

Pricing of a product can reduce demand without reducing profit. If an online company is doing
very well, but isn’t able to keep up with the current demand, it may be smart to actually raise the
price of the product. This will do two things; it will keep profits at the same level, but allows the
logistics department to handle the orders more efficiently. If companies c a n’t keep up with
demand, it will reduce the satisfaction of the customer, which will reduce the loyalty of the
customer. A solution to keep customers happy is by reducing the demand through increasing the
price, which will lower the number of purchases. Reducing the purchases will allow the
company to match demand; in return it will be easier to keep current customers. It is believed
that keeping current customers is five times cheaper than finding new ones (Haywood, 1989).

When raising the price, it must be by a marginal amount, enough not to because switching of
loyal customers. Doing this will allow a company to keep the same profit and man-age demand
more efficiently. This solution may want to be done until the company can acquire an automated
system.

Price bundling, which is packaging products together for one price (Kurtz, 1998)? Using this
tactic can be beneficial when doing business online. This can increase sales for a company,
because customers feel the y are getting more value for their money. Increasing the value will
reduce the risk for customers. Reducing the price by say 10%, it can allow a company to
increase sales. Sometimes this can be done with a product that is trying to be liquidated. This is
a chance for the company to accomplish two things: increase sales and reduce unwanted
inventory.

Promotion
Promotion is an important part when selling the
product; it is a necessary function for e-commerce
companies. This is one of the key facets in acquiring
and keeping customers. Keeping and acquiring
customers is important, but more attention and money needs to be spent on the place factors,
such as warehousing and distribution functions (Foster, 1999). Some of the budget promotion
money should be spent on developing better relations with distributors.

Creating a strong bond with the delivery carriers will enhance the value of the company. This
can be done through personal dealings with vendors. Doing such things as taking their
representatives to events or to dinner can build a loyal relationship. These activities are
inexpensive means that can really give an advantage to an e-commerce company.

Some troubles for e-commerce companies are the inability of customers to find the web page. If
they can’t find the web page, it creates a barrier in achieving increased sales. The current
technology of search engines, such as Yahoo and Excite, are very broad in nature (Mardesich,
1999). When looking for a specific company it will bring up a vast variety of topics. It takes a
while to narrow down the possible entries to find the intended company (Mardesich, 1999).
Reducing the time spent looking for a web site can increase the satisfaction of the customers. If
they must spend twenty minutes looking for a particular site, they may stop before they find it.
A company can use promotion to combat these problems.

The best way to combat the problem is using promotions that give the web site address. If the
product is high involvement, using advertising that is in magazines and newspapers should b e
efficient. For high involvement goods, people actively search for possible solutions to their
problem. If the product is low involvement, people will not be actively searching for the
product, so promotional activities must be intense. This can be accomplished by getting a large
number of advertisements into television and radio vehicles.

Another possible promotional vehicle is using hyperlinks (Wehling, 1996). Hyperlinks allow a
direct passage from another web site. This makes it very easy to find a particular web site.
Hyperlinks are usually most efficient when implemented on a web site of similar material.

In addition, there is no need to alienate customers or potential customers through promotional

tactics. False or unethical marketing as become an issue in recent years, it isn’t uncommon to
find many of these web sites. This can be just puffery or it can be full blown bait-and-switch
tactics.

Buy.com has built a reputation in participating in false advertising on their web site (Foster,
1999). This is definitely something e-commerce companies need to get away form. With
growing popularity of ecommerce, the more this is done the more it will create havoc in the
future. With increase volume in online buying, there will be more restrictions and patrolling of
false and unethical promotions. With increase in online buyers, it will increase the importance of
word-o f-mouth communications, which can cause problems. Doing this type of promotion will
decrease the confidence and loyalty of customers, which will reduce sales in the future. A
company’s profit is directly related to customer loyalty, and these types of promotions will
decrease loyalty. The question is clear, do they want to make a profit in the short run or be able
to make a profit in the long run?

Conclusion

It is obvious there is a huge market in

e-commerce, and there is a definite
need for effective management. The
only way for a company online to be
successful in the long run is dealing
with problems and making
corrections. With many barriers
involved in e-commerce, companies
must be able to effectively and
efficiently manage each phase of the
marketing mix. Companies can’t
afford to just focus on two or three
areas. This is not enough. Focusing on just product and place, will not accomplish goals in the
long run. Each component must be evaluated periodically and managed effectively. The reason
why evaluating each phase periodically, is that with such a diverse and technology driven area,
elements are constantly changing. Scanning the environment is a must to stay competitive and
efficient. In conclusion, the company can only be as good as its weakest link, each area is as
important as the other is, integration among the four areas is vital.

5.2: Creating web presence, advertising, customer service and support.

5.2.1: WEB SITE

A website (also written Web site or simply site is a collection
of related webpage’s containing images, videos or other digital
assets. A website is hosted on at least one web server, accessible
via a network such as the Internet or a private local area
network through an Internet address also called URL.

A web page is a document, typically written in plain

text interspersed with formatting instructions of Hypertext
Markup Language (HTML, XHTML). A web page may
incorporate elements from other websites with suitable markup
anchors.

Web pages are accessed and transported with the Hypertext

Transfer Protocol (HTTP), which may optionally employ
encryption (HTTP Secure, HTTPS) to provide security and
privacy for the user of the web page content. The user's
application, often a web browser, renders the page content
according to its HTML markup instructions onto a display
terminal.

All publicly accessible websites collectively constitute the World Wide Web.

The pages of a website can usually be accessed from a simple Uniform Resource Locator (URL)
called the homepage. The URLs of the pages organize them into a hierarchy, although hyper
linking between them conveys the reader's perceived site structure and guides the reader's
navigation of the site.

Some websites require a subscription to access some or all of their content. Examples of
subscription websites include many business sites, parts of news websites, academic
journal websites, gaming websites, message boards, web-based e-mail, social
networking websites, websites providing real-time stock market data, and websites providing
various other services (e.g. websites offering storing and/or sharing of images, files and so forth)
A website may be

a personal website

a commercial website

a government website

a non-profit organization website
It could be the work of an individual, a business or other organization, and is typically dedicated
to some particular topic or purpose. Any website can contain a hyperlink to any other website, so
the distinction between individual sites, as perceived by the user, may sometimes be blurred.

Websites are written in, or dynamically converted to, HTML (Hyper Text Markup
Language) and are accessed using a software interface classified as a user agent.
Web pages can be viewed or otherwise accessed from a range of
computer-based and Internet-enabled devices of various sizes,
including desktop computers, laptops, PDAs and cell phones.

A website is hosted on a computer system known as a web

server, also called an HTTP server, and these terms can
also refer to the software that runs on these systems and
that retrieves and delivers the web pages in response to
requests from the website users. Apache is the most commonly used web server software
(according to Net craft statistics) and Microsoft's Internet Information Server (IIS) is also
commonly used.

Types of Websites

Websites can be divided into two broad categories - static and interactive. Interactive
sites are part of the Web 2.0 community of sites, and allow for interactivity between the site
owner and site visitors. Static sites serve or capture information but do not allow engagement
with the audience directly.
There are many varieties of websites, each specializing in a particular type of content or
use, and they may be arbitrarily classified in any number of ways. A few such classifications
might include

Type of
Description Examples
Website
A site, typically few in pages, whose purpose is to sell a
Affiliate third party's product. The seller receives a commission for
facilitating the sale.
(e.g., Commission
Enabled portal that renders not only its custom CMS but
Junction), Advertisers
Affiliate also syndicated content from other content providers for an
(e.g., eBay) and
Agency agreed fee. There are usually three relationship
consumer
tiers. Affiliate Agencies
(e.g., Yahoo!).
Used to preserve valuable electronic content threatened
Internet
with extinction. Two examples are: Internet Archive, which
Archive site Archive, Google
since 1996 has preserved billions of old (and new) web
Groups
pages; and Google Groups, which in early 2005 was
 archiving over 845,000,000 messages posted to Usenet
news/discussion groups.
Yahoo!
Answers, Stack
Answer site is a site where people can ask questions & get
Answer Site Exchange network
answers.
(including Stack
Overflow)
A site created specifically to attack visitors computers on
their first visit to a website by downloading a file (usually
Attack site
a trojan horse). These websites rely on unsuspecting users
with poor anti-virus protection in their computers.
Sites generally used to post online diaries which may
include discussion forums (e.g., blogger, Xanga). Many
bloggers use blogs like an editorial section of a newspaper
Blog (web to express their ideas on anything ranging from politics to
log) religion to video games to parenting, along with anything in
between. Some bloggers are professional bloggers and they
are paid to blog about a certain subject, and they are usually
found on news sites.
A site with the purpose of creating an experience of a brand
online. These sites usually do not sell anything, but focus
Brand
on building the brand. Brand building sites are most
building site
common for low-value, high-volume fast moving consumer
goods (FMCG).
A website whose information revolves around a celebrity.
Celebrity This sites can be official (endorsed by the celebrity) or fan
jimcarrey.com
website made (run by his/her fan, fans, without implicit
endorsement).
A website that allows the visitor to donate to charity simply
Click to
by clicking on a button or answering a question correctly.
donate
An advertiser usually donates to the charity for each correct
website
answer generated.
Community A site where persons with similar interests communicate MySpace, Facebook,
site with each other, usually by chat or message boards. orkut
Sites whose business is the creation and distribution of (e.g., Slate, About.co
Content site
original content m).
Corporate Used to provide background information about a business,
website organization, or service.
Many of them are pay
Dating A site where users can find other single people looking for per services such
website long range relationships, dating, or just friends. as EHarmony andMat
ch.com, but there are
 many free or partially
free dating sites. Most
dating sites today
have the functionality
of social networking
websites.
Electronic
commerce(e A site offering goods and services for online sale and
-commerce) enabling online transactions for such sales.
site
Forum
A site where people discuss various topics.
website
A website made by the local, state, department or national For example,
Governmen government of a country. Usually these sites also operate Richmond.com is
t Site websites that are intended to inform tourists or support the geodomain for Ric
tourism. hmond, Virginia.
A site devoted to the criticism of a person, place,
Gripe site
corporation, government, or institution.
Gaming
website A site that lets users play online games. Some enable
Gambling people to gamble online.
website
Humor site Satirizes parodies or otherwise exists solely to amuse.
RateMyProfessors.co
m, Free Internet
Lexicon and
Most websites could fit in this type of website to some Encyclopedia. Most
Information
extent many of them are not necessarily for commercial government,
site
purposes educational and non-
profit institutions
have an informational
site.
Flickr, YouTube, Pure
Media A site that enables users to upload and view media such
volume and Google
sharing site as pictures, music, and videos
Video
A website that is the replication of another website. This
type of websites are used as a response to spikes in user
visitors. Mirror sites are most commonly used to provide
Mirror site
multiple sources of the same information, and are of
particular value as a way of providing reliable access to
large downloads.
Micro blog A short and simple form of blogging. Micro blogs are Twitter
site limited to certain amounts of characters and works similar
to a status update on Face book
Similar to information site, but dedicated to dispensing
News site cnn.com
news, politics, and commentary.
Websites about an individual or a small group (such as a
family) that contains information or any content that the
individual wishes to include. Many personal homepages are
Personal rare, thanks to the modern era of social networking sites
website such as MySpace, but some are still used for at home
businesses. This website is different from a Celebrity
website, which can be very expensive and run by a publicist
or agency.
A website created to fraudulently acquire sensitive
information, such as passwords and credit card details, by
Phishing
masquerading as a trustworthy person or business (such
site
as Social Security Administration, PayPal) in an electronic
communication (see Phishing).
Websites that index torrent files. This type of website is
p2p/Torrent
different from a Bit torrent client which is usually Mininova, TPB
s website
standalone software.
A site on which people may voice political views, show
Political site political humor, campaigning for elections, or show
information about a certain political party or ideology.
A site that shows sexually explicit content for enjoyment
and relaxation. They can be similar to a personal website
Porn site when it's a website of a porn actor/actress or a media pornotube
sharing website where user can upload from their own
sexually explicit material to movies made by adult studios.
A site on which people can praise or disparage what is
Rating site
featured.
A site in which people may advertise a place of worship, or
Religious
provide inspiration or seek to encourage the faith of a
site
follower of that religion.
A site on which people can post reviews for products or
Review site
services.
a site on which teachers, students, or administrators can
post information about current events at or involving their
School site
school. U.S. elementary-high school websites generally use
k12 in the URL
a site which largely duplicates without permission the
Scraper site content of another site, without actually pretending to be
that site, in order to capture some of that site's traffic
 (especially from search engines) and profit from advertising
revenue or in other ways.
A website that indexes material on the internet or an
Search intranet (and lately on traditional media such as books and
Google search, Bing
engine site newspapers) and provides links to information as a
response to a query.
Includes images or other material that is intended to be
Shock site Goatse.cx, rotten.com
offensive to most viewers
Book Stumble
A site where users share other content from the Internet and
marking Upon and Digg are
rate and comment on the content.
site examples.
A site where users could communicate with one another
Social
and share media, such as pictures, videos, music, blogs, etc.
networking Face book, Orkut
with other users. These may include games and web
site
applications.
A site designed to host or link to materials such as music,
Warez
movies and software for the user to download.
Webmail A site that provides a webmail service . Hotmail, Gmail
A site that provides a starting point or a gateway to other
Web portal msnbc.com, yahoo
resources on the Internet or an intranet.
A site which users collaboratively (and sometimes
Wiki site Wikipedia, wikihow
destructively) edit its content.

5.2.2: E-Commerce Advertising and Customer Service

As a customer, we are involved in buying lot of products and services (and information)
in our day to day life. Once we identify a need for something, whether it is physical product a
services (or information) we look for information about that product or service and find places
that sell it. For this we make use of different kinds of advertisements, TV shoes, Talk shows,
Catalogs, Handouts, Conversations with sales people etc. Then we compare the options (prices,
service, reputation and so on) before we actually purchase that product. Making the sale might
also involve negotiating the price, quantity, terms of delivery and may be some legal issues.

On the other hand, to meet market needs businesses design and manufacture new
products (or upgrade the existing ones), market these products, distribute them and provide
customer support generating revenue for themselves along the way.

Banks and other financial institutions handle the transfer and funds between buyers and
sellers.
 In the process of buying
something, we as a
customer, are satisfied if we
can get a quality product (or
service) which exactly
matches our expectations
and if that product is
available as quickly as
possible at the affordable
price with reasonable
amount of before and after
sales support.

In the process of selling

something, businesses try to
stay competitive, improve
productivity and deliver
quality service so as to
maximize customer
satisfaction and to generate
as much revenue as
possible.

Involvement of banks and other financial institutions reduce the risk of handling monetary
transactions.

In order to maximize the customer satisfaction and also to maximize the profit, businesses are
constantly adopting new technologies and methods to improve various business processes. For
example, automating the entire production line can improve and increase the production or
exchanging the business information electronically can reduce paper handling cost and errors,
which in turn will reduce the cost of the product.

E-commerce is another step in this evolution, which if applied properly, can benefit both
businesses and customers to achieve what they want.

E-commerce can be primarily seen as a system that includes those transactions that center on
buying and selling goods and services to directly generate revenue. But it also includes the
transactions such as generating demand for those goods and services, offering sales support and
customer service or facilitating communication between business partners.

E-commerce makes communication, information gathering and trade between the companies and
between companies and consumers easier and faster.
Formally e-commerce is a modern business methodology that addresses the needs of
organizations, merchants and consumers to cut costs while improving the quality of goods and
increasing the speed of services.
In traditional way of doing business, a typical sales cycle, from acquiring the product
information, requesting the product to paying for the product requires multiple media to be used
such as magazines, flyers, online catalogs, printed forms, letters, mails etc. This makes the co-
ordination more difficult and increases the time required to process the order.
Whereas using e-commerce, everything remains digital and only one medium is employed.
Everything right from product advertising, marketing to acceptance of payment and customer
support can be done electronically.
Despite getting the advantages like reduction in cost, improvement in the quality of goods and
increase in the speed of services, there are other factors that are forcing companies to adopt
e-commerce as a business methodology:
o Most companies have already made enormous information technology
investments to automate their key internal processes such as purchasing, invoicing
and other similar functions. So some aspects of the technical infrastructure for
electronic commerce are already in place.
o Prices of computer hardware and networking equipment continue to fall, making
IT investment appealing for many businesses.
o Internet technology has become more appealing to consumers. For example use of
WWW has allowed more consumers to confidently use the Internet.
2. Benefits of e-commerce
Though using e-commerce methodology to automate the business processes fully requires the re-
design of a company’s business processes, e-commerce offers following benefits to the
companies:

• Reduction in cost due to

1. Cheaper Internet prices.

2. Less paper work involved due to digitization of information.
3. Reusing the digitized information in many different ways. E.g. catalog data stored
in database can be presented electronically via web and also it can be printed in
customized catalogs targeted at specific market niches.
4. Reduction in support staff. E.g. compiling and publishing Frequently Ask
Questions (FAQ) can help user to get the answer to these questions at their finger
tips 24 hrs a day, 7 days a week.
5. Outsourcing of products and services globally.

• Improving the quality of goods

Direct contact with customers can help tracking customer satisfaction,
requesting more customer feedback and presenting custom solutions.
• Increase in the speed of services
Because all the information is available right at fingertips, and because
only one medium is involved, everything right form advertising,
marketing, purchasing to customer support can be done at the fastest rate.
 • Increase in the market share
It opens avenues for new markets and new customers. E.g. by expanding
the business globally.
Online Advertising
Online advertising is a form of promotion that
uses the Internet and World Wide Web for the
expressed purpose of
delivering marketing messages to attract
customers. Examples of online advertising
include contextual ads on search engine results
pages, banner ads, Rich Media Ads, Social
network advertising, interstitial, online classified
advertising, advertising networks and e-mail
marketing, including e-mail spam.

One major benefit of online advertising is the

immediate publishing of information and content
that is not limited by geography or time. To that
end, the emerging area of interactive
advertising presents fresh challenges for
advertisers who have hitherto adopted an
interruptive strategy.

Another benefit is the efficiency of advertiser's investment. Online advertising allows for the
customization of advertisements, including content and posted websites. For example, Ad
Words, Yahoo! Search Marketing and Google Ad Sense enable ads to be shown on relevant web
pages or alongside search result

Challenges of ecommerce in Customer Service

While the most common form of ecommerce is selling goods over the Internet, it also includes
any sales by electronic means. Many company use ecommerce techniques and methods to sell
goods to consumers in various economic markets. Internet and other electronic sales
allow businesses to increase revenue by selling goods on a national or international level. For all
the benefits electronic sales bring to companies, customer service challenges exist in ecommerce.
Impersonal
• Companies engaging in ecommerce sales often use electronic methods for customer
service. Websites and email are perhaps the most common forms of customer service in
ecommerce. Consumers may perceive these methods as impersonal and uncaring.
Companies must overcome these problems when working in the ecommerce world.
Merchants must also develop check out procedures for selling goods to consumers via
websites. Websites that is difficult to navigate, have tedious checkout procedures and
require customers to set up an account present customer service challenges in
ecommerce.
Misunderstood
• Electronic customer service communication can be easily misunderstood by consumers.
It can be difficult to accurately respond to questions, comments or other feedback which
 may not accurately present an answer to customers. Ecommerce often uses electronic
communication to issue customer responses because companies may not have a physical
location. Overcoming this lack of presence usually takes more work in an ecommerce
environment. Ambiguous communication or inaccurate answers can drive customers to
competitors and ultimately lose companies loyal customers and sales.
Counterproductive
• Ecommerce usually allows owners to save on business costs because electronic sales
methods do not require the same amount of capital investment. However, customer
service issues can quickly become counterproductive. For example, sending multiple
responses to customers who did not receive the original information or inadequate
ecommerce websites that make it difficult for customers to purchase goods are not
effective ecommerce practices. Tracking shipments and providing follow-up information
on customers can also create counterproductive situations in ecommerce customer
service. Hiring more workers to complete customer service functions can also increase a
company's operating costs. Customer service is often a function that is more
administrative and does not directly increase the company's sales revenue.

5.3: Web branding strategies, web selling models

First of all, what is a brand? A brand is a
symbol. Symbols are designs which represent
something else, and a brand is meant to package
all of the associations, experiences and
characteristics into an abstract construct.

This construct can be evoked using consistent

imagery, sounds, phrases and logos with which
people come into contact.

Brands are very important as they help you win

customers and they also help you to keep them.

They do this by awakening the associations and experiences you previously had with the brand,
or have seen through advertising, when you come into contact with the brand at key stages.

For example, when deciding what product to purchase out of a selection of similar items.

• Brands set expectations, and when faced with uncertainty people tend to pick the
safer option. People know what to expect from a brand they know.

• Branding is a complex process that is performed across all types of media, from product
packaging, TV commercials and magazine ads to interior store decoration and logotype
design. Of course branding also applies to web design.
 • It doesn’t matter if you’re building a website for a multi-million dollar brand or a
personal blog, branding still matters for the reasons outlined above. In the case of a
personal blog, branding will help set you apart and make your site memorable.

Here are 9 tips to help you to build a brand with web design.

1. Color
2. Character
3. Emotion
4. Consistency
5. Reusing code and visuals
6. Size and position of the logo
7. Value proposition
8. Tone of Voice
9. Uniqueness
10. Conclusion

1. Color
The choice of a good color palette is very important in branding. Color isn’t just aesthetics — it
stimulates various emotions and carries with it subconscious associations to various things
and characteristics.

For example, the color red may actually increase blood pressure, pulse and respiration. It’s a
color that symbolizes passion, energy, power and excitement. Because of this, it’s usually a good
color choice for brands in the entertainment industry.

Other colors carry different associations and effects. Green symbolizes nature, environment,
profit, money and health. It’s also a calming color, which is why hospitals usually paint their
walls pale green.

When picking a color for your brand, research its effects and associations to see if it is an
appropriate fit for the type of things
your brand represents. Also note
that different cultures may
associate the same colors with
different things, so it’s a good idea
to check that your colors mean
what you think they do in the
markets you operate in.

Logitech use teal as the brand’s main color. Various shades of teal are used around their website,
from background colors to headings and links:

2. Character
Does your brand have character? Infusing your brand with a little personality can help you define
what it stands for.
Is the brand all about stability and safety so that your customers can be sure to rely on you? Is the
brand fun and down to earth?
Many people in commercialized societies use products and brands to define themselves, soshape
your brand’s character towards something which your audience will like to associate
themselves with.
Anthropomorphism is the attribution of human
qualities and characteristics to other things, like
animals or objects. Infusing your brand with
anthropomorphic elements is a good way to
give it character.
Think about the icon for the “Finder” application
on Mac OS X. It’s a blue square with a distinctive
smiling face drawn with a few black lines.
The program it represents is a file browser, but by
giving it human characteristics the designers give
it a soul.
Another great example is the Outlaw Design blog which sticks to a strong Wild West theme
throughout the design with a unique mix of wooden textures and flat illustrations, branding itself
very effectively:

Twitter’s little blue bird mascot has proven very effective; all of the custom media and
websites that Twitter fans create usually feature their own variation of it. They may all look a
little different, but are still instantly recognizable:

3. Emotion
Emotion is another factor to consider when building your brand. What feelings and emotions do
you want people to experience when they visit your site? What sort of things do you want
them to associate with your brand?
Crafting the aesthetics of your site
shouldn’t be about following the latest
design trends, it should be about deciding
on the emotions and ideas that you want
your brand to project, and then working on
a design that will do just that.

Studio 7 Designs uses vibrant colors and

beautiful imagery to create a rich and
exciting brand, which is very important for a design agency:
4. Consistency

To build a successful brand you need to make it memorable. What do you do to make people
remember things? You repeat them.
Consistency throughout your web
design will build on the choices
you’ve made earlier regarding
selecting the right personality for the
brand and evoking the appropriate
emotions. Keep consistent colors,
visuals and typography throughout
to ensure your website projects a
uniform image.

Skype consistently integrate several branding elements throughout all of their marketing media,
which include the color palette with a dominant blue, white 2D clouds with illustrations sitting
on top of them and multicolored rainbows:

5. Reusing code and visuals

Consistent visuals and layout allows you to reuse more of your content, be it stylesheets or
images. This means that your site will load faster as the user’s browser doesn’t need to
download as many things — old images and CSS are already stored in its cache.

Apple.com integrates their logo with the navigation bar, infusing their brand into the page
design:

6. Size and position of the logo

The accepted norm when positioning your site’s logo is to put it in the upper left area of the
page.
That’s the area where most people will look
at to see what site they’re on. Additionally,
it’s best practice to link the logo image to
the site’s home page. But position is only
one element — size is also important.
Ensure your logo is big enough to be the
second or third thing that people will notice
when they arrive on your site.
UX Booth has a nice, large logo in the top left area of the page, which is one of the first things
that you notice when you arrive at the site:
7. Value proposition

When a visitor arrives on your site for the first time they take the first few seconds to orient
themselves. Is this the right site? Does this look interesting? What is this all about? To answer
these questions you should provide a clear and concise value proposition to your visitor.
This value proposition should be a short statement in a prominent location on your page. It
should preferably be located next to the site’s logo so that when a new visitor reads the title of
the site or business they’ll follow on to the value proposition.
In a few words explain
exactly what benefit your site
provides to the visitor, so that
they’ll know not only what
your site is about, but why
they should keep using it.
Rob Sartain’s Prime Cut
Design has a great value
proposition in the header of
their site. It’s highly visible, concise, and clear; and it covers both, the ‘what’ and the ‘why’:

The Report Box website features a clear value proposition underneath the logo and navigation.
The large font size ensures that it’s one of the first things that you’ll read:

8. Tone of voice

The language you use on your website needs to reinforce your brand’s character and personality.
If your brand is a friendly and down to earth, and your audience are young, tech savvy people,
then informal and fun tone of voice may work well for you.

On the other hand, if you’re making a website for an investment bank, the tone of voice should
reflect that by being much more formal.

It’s not just about what you say — it’s about how you say it. You can say the same thing in
different voices and get the same meaning across, but the personality that this voice emanates
will be different; so choose a tone of voice that suits your brand’s character and audience.
Matt, a simple web app that helps you use multiple Twitter accounts, features hand drawn
illustrations and a friendly tone of voice, ideal for the young, tech savvy audience:

37signal’s Base camp website takes a more formal, yet simple and concise tone, focusing on
their business audience:

9. Uniqueness

Getting all of the above elements will only get you so far though, because there is another very
important thing to consider when building your brand: uniqueness.

If your website looks just like the competition, then is it really memorable? How would potential
customers differentiate between the two? By putting in that extra effort to create a unique image
you’ll not only stand out from your competitors, you’ll be more memorable, and that means
a better chance that your visitors will come back for more.
Carbonica’s website features many recycled paper textures, hand drawn fonts and cut-out style
illustrations. This earthy imagery helps promote the sustainable image that Carbonica strives for
and is different enough to be memorable:

Conclusion
Building a strong brand is important not only for big corporations, but also for small companies
and even personal websites and blogs. Branding helps people differentiate between
competition and quickly judge quality.

The web is an excellent platform to build your brand, so it’s important not to ignore branding
when working on your website. Make sure to utilize all the various techniques to make it
powerful and effective.

Web selling models

1. Considered to be the easiest means to start an net business. This can be called Affiliate
Marketing which does not require you to possess a product of your own. All you need to
try and do is to refer your customers to a list of obtainable affiliate products in the
market. These are proven products sometimes sold by available net promoting business
typically known as as merchants. These merchants can pay you a portion of the sale as
commission. It may seem little at initial however these merchants offer a lot of products
within the market thus it won’t take long before you'll see larger dividends in your
affiliate program. To search out success in this sort of marketing strategy though, you
need to create certain that your chosen merchant sells superior quality product and that he
is trustworthy and reliable so as to make a certain level of trust along with your customer
base whether or not you're selling alternative individual’s merchandise.

2. Another net selling model you need to consider is called Google Ad sense. With this
methodology, you wish to possess your own web site or maybe simply a blog and post
fascinating information on it therefore as to attract a ton of visitors. Next, you wish to
sign up with Google to have one in every of their advertising panel in one in every of the
sides of your web site or blog. Payment can be received whenever guests click through
the ads that you simply posted for Google.
 3. Info Product is yet another net selling method commonly utilized by successful
entrepreneurs in the web. This can be one among the most effective methods out there if
your goal is for a long run business. One advantage for this one is that you wont have any
inventory cost since you'll be selling data and information products. The idea is to form
your own information product that you think about yourself to be knowledgeable in like
basketball or writing articles. You can write the data yourself or rent a writer to form an
eBook for you.

5.4: SUMMARY

Internet marketing is associated with several business models. The model is typically defined by
the goal. These include e-commerce, where goods are sold directly to consumers or businesses;
publishing, or the sale of advertising; and lead-based sites, where an organization generates value
by getting sales leads from their site. There are many other models based on the specific needs of
each person or business that launches an internet marketing campaign. Internet marketing refers
to the placement of media along different stages of the Customer engagement Cycle,
through Search Engine Marketing, Search Engine Optimization, Banner Ads on specific sites,
email marketing and Web 2.0 strategies.

One of the benefits associated with Internet marketing is the availability of great amounts of
information. Consumers can access the Internet and research products, as well as purchase them
at any hour of any day. Companies that use Internet marketing can also save money because of a
reduced need for a sales force. Overall, Internet marketing can help expand from a local market
to national and international market places. Compared to traditional media, such as print, radio
and TV, Internet marketing can have a relatively low cost of entry . It should be mentioned that,
although it may seem a relatively simple task to enter the world of online marketing, sound
business strategies still apply. There is still an emphasis on business goals, namely CVP
analysis when determining strategy and the overall effectiveness of marketing campaigns. There
are important characteristics that differentiate internet marketing from "offline marketing": -
One-to-one vs. one-to-many approach: the targeted user, is typically browsing the internet on
their own, and the marketing messages reach them personally. This can be very clearly seen in
search marketing, where the users find advertisements targeted to specific keywords that the
users asked for. - Demographics targeting vs. behavioral targeting: offline marketers typically
segment their markets according to age group, sex, geography, and other general factors. Online
marketers have the luxury of targeting by activity. This is a deeper form of targeting since the
advertiser knows that the target audience are people who do a certain activity (upload pictures,
have blogs, etc.) instead of just expecting that a certain group of people will like their new
product or service. - Measurability: Almost all aspects of an online campaign can be traced,
measured, and tested. The advertisers either pays per banner impression (CPM), pays per click
(PPC), or pays per action accomplished. Therefore, it is easy to understand which messages or
offering are more appealing to the audience. - Response and immediate results: Since the online
marketing initiatives usually require users to click on the message, go to a website, and perform a
targeted action, the results of campaigns are immediately measured and tracked. On the other
hand, someone driving a car who sees a billboard, will at best be interested and might decide to
get more information at some time.
Since exposure, response and overall efficiency of Internet media is easy to track compared to
traditional "offline" media, through the use of web analytics for instance, Internet marketing can
offer a greater sense of accountability for advertisers. Marketers and their clients are becoming
aware of the need to measure the collaborative effects of marketing, ie. how the internet affects
in-store sales, etc. instead of relying on the siloed approach to marketing. Internet marketing, as
of 2007 is growing faster than other types of media.
Limitations
Because Internet marketing requires customers to use newer technologies than traditional media,
not all people may get the message. Low speed Internet connections are one barrier. If
companies build overly large or complicated web pages, some Internet users struggle to
download the information on dial up connections or mobile devices. From the buyer's
perspective, another limitation is the inability of shoppers to touch, smell, taste or try-on tangible
goods before making an online purchase. However, it is an industry standard for e-commerce
vendors to have liberal return policies and in store pick up services to reassure customers.
Security concerns
For both companies and consumers that participate in online business, security concerns are very
important. Many consumers are hesitant to buy items over the Internet because they do not trust
that their personal information will remain private. Recently, some companies that do business
online have been caught giving away or selling information about their customers. Several of
these companies have guarantees on their websites, claiming customer information will be
private. Some companies that buy customer information offer the option for individuals to have
their information removed from the database (known as opting out). However, many customers
are unaware that their information is being shared and are unable to stop the transfer of their
information between companies. Security concerns are of great importance and online companies
have been working hard to create solutions. Encryption is one of the main methods for dealing
with privacy and security concerns on the Internet. Encryption is defined as the conversion of
data into a form called a cipher. This cipher cannot be easily intercepted unless an individual is
authorized by the program or company that completed the encryption. In general, the stronger the
cipher, the better protected the data is. However, the stronger the cipher, the more expensive
encryption becomes.
Effects on industries
Internet marketing has had a large impact on several industries including music, banking, and
flea markets, as well as the advertising industry itself. As Advertisers increase and shift more of
their budgets online, it is now overtaking radio in terms of market share. In the music industry,
many consumers have begun buying and downloading music files (e.g. MP3s) over the Internet
in addition to buying CDs. More and more banks are offering the ability to perform banking
tasks online. Online banking is believed to appeal to customers because it is more convenient
than visiting bank branches. Currently, over 150 million U.S. adults now bank online, with a
high growth rate. The increasing speed of Internet connections is the main reason for the fast
growth. Of those individuals who use the Internet, 44% now perform banking activities over the
Internet. Internet auctions have gained popularity. Unique items that could previously be found
at flea markets are being sold on eBay instead. eBay has also affected the prices in the industry.
Buyers and sellers often look at prices on the website before going to flea markets and the eBay
price often becomes what the item is sold for. More and more flea market sellers are putting their
items up for sale online and running their business out of their homes. The effect on the ad
industry itself has been profound. In just a few years, online advertising has grown to be worth
tens of billions of dollars annually. PricewaterhouseCoopers reported US Internet marketing
spend totaled $16.9 billion in 2006

5.5: Glossary

Internet marketing, also known as digital marketing, web marketing, online

marketing, search marketing or e-marketing, is the marketing (generally promotion) of
products or services over the Internet.

Internet marketing is considered to be broad in scope because it not only refers to marketing on
the Internet, but also includes marketing done via e-mail and wireless media. Digital customer
data and electronic customer relationship management (ECRM) systems are also often grouped
together under internet marketing.

Internet marketing ties together the creative and technical aspects of the Internet, including
design, development, advertising, and sales. Internet marketing also refers to the placement of
media along many different stages of the customer engagement cycle through search engine
marketing (SEM), search engine optimization (SEO),banner ads on specific websites, email
marketing, and Web 2.0 strategies.

In 2008, The New York Times, working with com Score, published an initial estimate to quantify
the user data collected by large Internet-based companies. Counting four types of interactions
with company websites in addition to the hits from advertisements served from advertising
networks, the authors found that the potential for collecting data was up to 2,500 times per user
per month.
Internet marketing is associated with several business models:

E-commerce: a model whereby goods are sold directly to consumers (B2C), businesses
(B2B), or from consumer to consumer (C2C).

Lead-based websites: a strategy whereby an organization generates value by acquiring sales
leads from its website. Similar to walk-in customers in retail world. These prospects are often
referred to as organic leads.

Affiliate Marketing: a process wherein a product or service developed by one entity is sold
by other active sellers for a share of profits.The entity that owns the product may provide
some marketing material (e.g., sales letters, affiliate links, tracking facilities, etc.); however,
the vast majority of affiliate marketing relationships come from e-commerce businesses that
offer affiliate programs.

Local Internet marketing: a strategy through which a small company utilizes the Internet to
find and to nurture relationships that can be used for real-world advantages. Local Internet
marketing uses tools such as social media marketing, local directory listing,[6] and targeted
online sales promotions.

5.5: CHECK YOUR PROGRESS

1. What is Marketing Mix?

2. What are types of websites?
3. What are 9 tips to help you to build a brand with web design
5.6: References
• Automated shipping streamlines the supply chain. (1999, October). Transportation &
Distribution, pp.16-19.
• Ayers, A. F. (1999, September). What logistics managers need to know about today’s
complex information. Transportation
• & Distribution, pp. 33-36.
• Checking out. (2000, March-April). Harvard Business Review, p.22.
• Foster, T. (1999, October). Dot -com retailers give 3PLs their big chance. Logistics
Management & Distribution, p. 38.
• Foster, T. (1999, May 3). Dubious marketing ploys at buy.com expose the seamy side of
e-commerce. Infoworld, p. 99.
• Gilber, A. (1999, October 25). Fulfilling expectations. InformationWeek, pp. 22-23.
• Haywood, K. M. (1989, Spring). Managing word of mouth communications. Journal of
Services Marketing, p. 57.
• Holden, R. K. & Nagle, T. T. (1998, Summe r). Kamikaze pricing. Marketing
Management, pp.31-34.
• Jedd, M. (2000, February). Sizing up home delivery. Logistics Management &
Distribution Report, p.51.
• Kurtz, D.L. & Clow K.E. (1998). Services marketing. New York, John Wiley & Sons,
Inc. pp.11, 251.
• Mardesich, J. (1999, November 8). The web is no shopper’s paradise. Fortune, pp.188-
190.
• Pallab, P. (1996, Fall). Marketing on the internet. Journal of Consumer Marketing,
pp.27-28.
• Wehling, B. (1996, January 1). The future of marketing: What every marketer should
know about being online. Vital
• Speeches of the Day, pp.170-173.
• Wilder, C. (1998, December 7). E-commerce myths & realities. Informationweek ,
pp.52-53.
• Wilson, T. (1999, October 25). Shippers repackaged as e-provides. Informationweek, p
p . 63-85.
• E Commerce team at Fands Infotrainers.

5.7: ANSWER TO CHECK YOUR PROGRESS

1. Read 5.1
2. Read 5.2
3. Read 5.3
 Unit 6:
Content:
6.1: Digitization of documents & Document library
6.2: Types of digital documents, warehouses.
6.3. Summary
6.4: Glossary
6.5: Check Your Progress
6.6: Reference
6.7: Answer to check your progress

6.1: Digitization of documents & Document library

6.1.1: Digitizing or digitization

Is the representation of an object, image, sound, document or a signal (usually an analog signal)
by a discrete set of its points or samples? The result is called digital representation or,
more specifically, a digital image, for the object, and digital form, for the signal. Strictly
speaking, digitizing means simply capturing an analog signal in digital form. For a
document the term means to trace the document image or capture the "corners" where the
lines end or change direction.

McQuail identifies the process of digitization having immense significance to the computing
ideals as it "allows information of all kinds in all formats to be carried with the same
efficiency and also intermingled" (2000:28)

Process

The term digitization is often used when diverse forms of information,

such as text, sound, image or voice, are converted into a single binary
code. Digital information exists as one of two digits, either 0 or 1.
These are known as bits (a contraction of binary digits) and the
sequences of 0s and 1s that constitute information are called bytes.

Analog signals are continuously variable, both in the number of possible values of the signal at a
given time, as well as in the number of points in the signal in a given period of time. However,
digital signals are discrete in both of those respects – generally a finite sequence of integers –
therefore a digitization can, in practical terms, only ever be an approximation of the signal it
represents.

Digitization occurs in two parts:

Discretization
The reading of an analog signal A, and, at regular time intervals (frequency), sampling
sam the value
of the signal at the point. Each
ach susuch reading is called a sample and may bee considered
con to have
infinite precision at this stage;
Quantization
Samples are rounded to a fix fixed set of numbers (such as integers), ), a process
p known
as quantization.
In general, these can occur att the ssame time, though they are conceptually distinct
istinct.
A series of digital integers can be transformed into an analog output that hat approximates
ap the
original analog signal. Such a trantransformation is called a DA conversion. The sampling
sam rate and
the number of bits used to repre represent the integers combine to determinee how close such an
approximation to the analog signal a digitization will be.

Analog signals to digital

Analog signals are continuous

uous eelectrical signals.
Digital signals are non-continuous
inuous.
Nearly all recorded musicc has been digitized.
About 12 percent of the 500,000+
,000+ movies listed on
the Internet Movie Database are di
digitized on DVD.
Digitization of personal multimed
ltimedia such as home
movies, slides, and photographs
graphs is a popular
method of preserving and sharing older
repositories. Slides and photo
photographs may be
scanned using an image scanner
canner, but videos are
more difficult. Many companiepanies offer personal
video digitization services

Analog texts to digital

About 5 percent of texts havee been digitized as of 2006.

Older print books are beingg scan

scanned and optical character recognition technolog
hnologies applied by
academic and public libraries,
s, foun
foundations, and private companies like Google.
Unpublished text documents on paper which have some enduring historical or research value are
being digitized by libraries and archives, though frequently at a much slower rate than for books
(see digital libraries). In many cases, archives have replaced microfilming with digitization as a
means of preserving and providing access to unique documents.

Implications of digitization

This shift to digitization in the contemporary media world has

created implications for traditional mass media products,
however these "limitations are still very unclear" (McQuail,
2000:28). The more technology advances, the more converged
the realm of mass media will become with less need for
traditional communication technologies. For example, the
Internet has transformed many communication norms, creating
more efficiency for not only individuals, but also for
businesses. However, McQuail suggests traditional media have
also benefited greatly from new media, allowing more effective
and efficient resources available (2000:28).

Collaborative digitization projects

There are many collaborative digitization projects throughout the United States.
Two of the earliest projects were the Collaborative Digitization Project in Colorado
and NC ECHO - North Carolina Exploring Cultural Heritage Online, based at the
State Library of North Carolina.

These projects establish and publish best practices for digitization and work with regional
partners to digitize cultural heritage materials. Additional criteria for best practice have more
recently been established in the UK, Australia and the European Union. Wisconsin Heritage
Online is a collaborative digitization project modeled after the Colorado Collaborative
Digitization Project. Wisconsin uses a wiki to build and distribute collaborative documentation.
Georgia's collaborative digitization program, the Digital Library of Georgia, presents a seamless
virtual library on the state's history and life, including more than a hundred digital collections
from 60 institutions and 100 agencies of government. The Digital Library of Georgia is
a GALILEO initiative based at the University of Georgia Libraries.

In South-Asia Nanakshahi trust is digitizing manuscripts of Gurumukhi Script.

Library Preservation

Digital preservation in its most basic form is a series of activities maintaining access to digital
materials over time. Digitization in this sense is a means of creating digital surrogates of analog
materials such as books, newspapers, microfilm and videotapes. Digitization can provide a
means of preserving the content of the materials by creating an accessible facsimile of the object
in order to put less strain on already fragile originals. For sounds, digitisation of legacy analogue
recordings is essential insurance against technological obsolescence.

The prevalent Brittle Books issue facing libraries across the world is being addressed with a
digital solution for long term book preservation. For centuries, books were printed on wood-pulp
paper, which turns acidic as it decays. Deterioration may advance to a point where a book is
completely unusable. In theory, if these widely circulated titles are not treated with de-

acidification processes, the materials upon those acid pages will be lost forever. As digital
technology evolves, it is increasingly preferred as a method of preserving these materials, mainly
because it can provide easier access points and significantly reduce the need for physical storage
space.
Google, Inc. has taken steps towards attempting to digitize every title with "Google Book
Search". While some academic libraries have been contracted by the service, issues of copyright
law violations threaten to derail the project. However, it does provide - at the very least - an
online consortium for libraries to exchange information and for researchers to search for titles as
well as review the materials.

Lean philosophy

The broad use of internet and the

increasing popularity of Lean
philosophy have also increased the use
and meaning of "digitizing" to describe improvements in the efficiency of organizational
processes. This will often involve some kind of Lean process in order to simplify process
activities, with the aim of implementing new "lean and mean" processes by digitizing data and
activities.

Fiction

Works of science-fiction often include the

term digitize as the act of transforming people into
digital signals and sending them into a computer.
When that happens, the people disappear from the real
world and appear in a computer world (as featured in
the cult film Tron, the animated series Code: Lyoko,
or the late 1980s live-action series Captain Power and
the Soldiers of the Future). In the video game Beyond
Good and Evil the protagonist's holographic friend
digitizes the player's inventory items.

6.1.2: Digital Document library

A digital library is a library in which collections are stored in digital formats (as opposed to
print, microform, or other media) and accessible by computers. The digital content may
be stored locally, or accessed remotely via computer networks. A digital library is a type
of information retrieval system.

The DELOS Digital Library Reference Model defines a

digital library as:

An organization, which might be virtual, that

comprehensively collects, manages and preserves for the long term rich digital content, and
offers to its user communities specialized functionality on that content, of measurable quality and
according to codified policies.

The first use of the term digital library in print may have been in a 1988 report to
the Corporation for National Research Initiatives. The term digital libraries were first
popularized by the NSF/DARPA/NASA Digital Libraries Initiative in 1994. These draw heavily
on As We May Think by Vannevar Bush in 1945, which set out a vision not in terms of
technology, but user experience. The term virtual library was initially used interchangeably
with digital library, but is now primarily used for libraries that are virtual in other senses (such
as libraries which aggregate distributed content).

A distinction is often made between content that was created in a digital format, known as born-
digital, and information that has been converted from a physical medium, e.g., paper,
by digitizing. The term hybrid library is sometimes used for libraries that have both physical
collections and digital collections. For example, American Memory is a digital library within
the Library of Congress. Some important digital libraries also serve as long term archives, for
example, the Eprint arXiv, and the Internet Archive.

Academic repositories

Many academic libraries are actively involved in

building institutional repositories of the institution's books,
papers, theses, and other works which can be digitized or were
'born digital'. Many of these repositories are made available to
the general public with few restrictions, in accordance with
the goals of open access, in contrast to the publication of
research in commercial journals, where the publishers often
limit access rights. Institutional, truly free, and corporate
repositories are sometimes referred to as digital libraries.

Digital archives

Physical archives differ from physical libraries in

several ways. Traditionally, archives were defined as:
1. Containing primary sources of information
(typically letters and papers directly produced
by an individual or organization) rather than
the secondary sources found in a library
(books, periodicals, etc);
2. Having their contents organized in groups
rather than individual items.
3. Having unique contents.
The technology used to create digital libraries has
been even more revolutionary for archives since it breaks down the second and third of these
general rules. In other words, "digital archives" or "online archives" will still generally contain
primary sources, but they are likely to be described individually rather than (or in addition to) in
groups or collections, and because they are digital their contents are easily reproducible and may
indeed have been reproduced from elsewhere. The Oxford Text Archive is generally considered
to be the oldest digital archive of academic physical primary source materials.

The future

Large scale digitization projects are underway at Google, the Million Book Project, and Internet
Archive. With continued improvements in book handling and presentation technologies such
as optical character recognition and eBooks, and development of alternative depositories and
business models, digital libraries are rapidly growing in popularity as demonstrated by Google,
Yahoo!, and MSN's efforts. Just as libraries have ventured into audio and video collections, so
have digital libraries such as the Internet Archive.

According to Larry Lannom, Director of Information

Management Technology at the nonprofit Corporation
for National Research Initiatives, “all the problems
associated with digital libraries are wrapped up in
archiving.” He goes on to state, “If in 100 years people
can still read your article, we’ll have solved the
problem.” Daniel Akst, author of The Webster
Chronicle, proposes that “the future of libraries—and of
information—is digital.” Peter Lyman and Hal Varian,
information scientists at the University of California,
Berkeley, estimate that “the world’s total yearly
production of print, film, optical, and magnetic content
would require roughly 1.5 billion gigabytes of storage.”
Therefore, they believe that “soon it will be technologically possible for an average person to
access virtually all recorded information.”

Searching
Most digital libraries provide a search interface which allows
resources to be found. These resources are typically deep
web (or invisible web) resources since they frequently cannot
be located by search engine crawlers. Some digital libraries
create special pages or sitemaps to allow search engines to
find all their resources. Digital libraries frequently use
the Open Archives Initiative Protocol for Metadata
Harvesting (OAI-PMH) to expose their metadata to other
digital libraries, and search engines like Google Scholar, Yahoo! and Scirus can also use OAI-
PMH to find these deep web resources.

There are two general strategies for searching a federation of digital libraries:
1. distributed searching, and
2. Searching previously harvested metadata.

Distributed searching typically involves a client sending multiple search requests in parallel to a
number of servers in the federation. The results are gathered, duplicates are eliminated or
clustered, and the remaining items are sorted and presented back to the client. Protocols
like Z39.50 are frequently used in distributed searching. A benefit to this approach is that the
resource-intensive tasks of indexing and storage are left to the respective servers in the
federation. A drawback to this approach is that the search mechanism is limited by the different
indexing and ranking capabilities of each database, making it difficult to assemble a combined
result consisting of the most relevant found items.
Searching over previously harvested metadata involves searching a locally stored index of
information that has previously been collected from the libraries in the federation. When a search
is performed, the search mechanism does not need to make connections with the digital libraries
it is searching - it already has a local representation of the information. This approach requires
the creation of an indexing and harvesting mechanism which operates regularly, connecting to all
the digital libraries and querying the whole collection in order to discover new and updated
resources. OAI-PMH is frequently used by digital libraries for allowing metadata to be
harvested. A benefit to this approach is that the search mechanism has full control over indexing
and ranking algorithms, possibly allowing more consistent results. A drawback is that harvesting
and indexing systems are more resource-intensive and therefore expensive.

Frameworks

The formal reference models include the DELOS Digital Library Reference Model (Agosti, et
al., 2006) and the Streams, Structures, Spaces, Scenarios; Societies (5S) formal framework The
Reference Model for an Open Archival Information System (OAIS) provides a framework to
address digital preservation.

Construction and organization

Software
There are a number of software packages for use in general digital libraries, for notable ones
see Digital library software. Institutional repository software, which focuses primarily on ingest,
preservation and access of locally produced documents, particularly locally produced academic
outputs, can be found in Institutional repository software.

Digitization
In the past few years, procedures for digitizing books at high speed and comparatively low cost
have improved considerably with the result that it is now possible to plan the digitization of
millions of books per year for creating digital libraries.

Advantages

The advantages of digital libraries as a means of easily and rapidly accessing books, archives and
images of various types are now widely recognized by commercial interests and public bodies
alike.

Traditional libraries are limited by storage space; digital libraries have the potential to store
much more information, simply because digital information requires very little physical space to
contain it. As such, the cost of maintaining a digital library is much lower than that of a
traditional library.

A traditional library must spend large sums of money paying for staff, book maintenance, rent,
and additional books. Digital libraries may reduce or, in some instances, do away with these fees.
Both types of library require cataloguing input to allow users to locate and retrieve material.
Digital libraries may be more willing to adopt innovations in technology providing users with
improvements in electronic and audio book technology as well as presenting new forms of
communication such as wikis and blogs; conventional libraries may consider that providing
online access to their OPAC catalogue is sufficient. An important advantage to digital conversion
is increased accessibility to users. They also increase availability to individuals who may not be
traditional patrons of a library, due to geographic location or organizational affiliation.

No physical boundary. The user of a digital library need not to go to the library physically;
people from all over the world can gain access to the same information, as long as an Internet
connection is available.

Round the clock availability A major advantage of digital libraries is that people can gain
access 24/7 to the information.

Multiple access. The same resources can be used simultaneously by a number of institutions
and patrons. This may not be the case for copyrighted material: a library may have a license
for "lending out" only one copy at a time; this is achieved with a system of digital rights
management where a resource can become inaccessible after expiration of the lending period
or after the lender chooses to make it inaccessible (equivalent to returning the resource).

Information retrieval. The user is able to use any search term (word, phrase, title, name,
subject) to search the entire collection. Digital libraries can provide very user-friendly
interfaces, giving clickable access to its resources.

Preservation and conservation. Digitization is not a long-term preservation solution for
physical collections, but does succeed in providing access copies for materials that would
otherwise fall to degradation from repeated use. Digitized collections and born-digital objects
pose many preservation and conservation concerns that analog materials do not. Please see
the following "Problems" section of this page for examples.

Space. Whereas traditional libraries are limited by storage space, digital libraries have the
potential to store much more information, simply because digital information requires very
little physical space to contain them and media storage technologies are more affordable than
ever before.

Added value. Certain characteristics of objects, primarily the quality of images, may be
improved. Digitization can enhance legibility and remove visible flaws such as stains and
discoloration.

Easily accessible.

6.2: Types of digital documents, warehouses

When we refer to a paper document, a papyrus document, or a microfilmed document, the
meaning is clear. However, the idea of a "digital document" is more difficult. We can recognize
e-mail and a technical report generated by a word processor as digital documents, but beyond
these simple examples the concept of a "document" becomes less clear. Is a software program a
document? It has lines of language-like text. Is an operating system a document? One can
enumerate different types of digital documents and this is necessary because of the need to
specify standards in order to achieve efficiency and interoperability. But if one seeks
completeness, the process becomes arbitrary and intellectually unsatisfying because it is not clear
where the frontier between documents and non-documents should be.
A paper document is distinguished, in part, by the fact that it is on paper. But that aspect, the
technological medium, is less helpful with digital documents. An e-mail message and a technical
report exist physically in a digital environment as a string of bits, but so does everything else in a
physical environment. "Multimedia," which used to denote multiple, physically-different media,
is now of renewed interest, because, ironically, the multiple media can be reduced to the mono-
medium of electronically stored bits.

For practical purposes, people develop pragmatic

definitions, such as "anything that can be given a file
name and stored on electronic media" or "a
collection of data plus properties of that data that a
user chooses to refer to as a logical unit." And, as so
often in discussions of information, one finds
definitions of "document" that focus on one aspect
and are often highly metaphorical, such as
"`captured' knowledge," "data in context," and "an
organized view of information."

Digital systems have been concerned primarily with text and text-like records (e.g. names,
numbers, and alphanumeric codes), but the present interest in icons and graphics reminds us that
we may need to deal with any phenomena that someone may wish to observe: events, processes,
images, and objects as well as texts.

From document to "documentation"

Digital documents are relatively new, but discussion of the broader question "What is a
document?" is not new. In the late 19th century there was increasing concern with the rapid
increase in the number of publications, especially of scientific and technical literature and of
social "facts." Continued effectiveness in the creation, dissemination, utilization of recorded
knowledge was seen as a needing new techniques for managing the rising flood of documents.

The "managing" that was needed had several aspects. Efficient and reliable techniques were
needed for collecting, preserving, organizing (arranging), representing (describing), selecting
(retrieving), reproducing (copying), and disseminating documents. The traditional term for this
activity was "bibliography". However, "bibliography" was not entirely satisfactory. It was felt
that something more than traditional "bibliography" was needed, e.g. techniques for reproducing
documents and "bibliography" also had other well-established meanings in related to traditional
techniques of book-production.

Early in the 20th century the word "documentation" was increasingly adopted in Europe instead
of "bibliography" to denote the set of techniques needed to manage this explosion of documents.
From about 1920 "documentation" (and related words in English, French and German) was
increasingly accepted as a general term to encompass bibliography, scholarly information
services, records management, and archival work. After about 1950 more elaborate terminology,
such as "information science", "information storage and retrieval", and "information
management", increasing replaced the word "documentation".
From documentation back to "document"

The problems created by the increase in printed documents did lead to the development of
techniques developed to manage significant (or potentially significant) documents, meaning, in
practice, printed texts. But there was (and is) no theoretical reason why documentation should be
limited to texts, let alone printed texts. There are many other kinds of signifying objects in
addition to printed texts. And if documentation can deal with texts that are not printed, could it
not also deal with documents that are not texts at all? How extensively could documentation be
applied? Stated differently, if the term "document" were used in a specialized meaning as the
technical term to denote the objects to which the techniques of documentation could be applied,
how far could the scope of documentation be extended. What could (or could not) be a
document? However, the question was not often formulated in these terms.

An early development was to extend the notion of document beyond written texts, a usage to be
found in major English and French dictionaries. "Any expression of human thought" was a
frequently used definition of "document" among document lists. In the USA, the phrases "the
graphic record" and "the generic book" were widely used. This was convenient for extending the
scope of the field to include pictures and other graphic and audio-visual materials. The Belgian
Paul Otlet (1868-1944) is known for his observation that documents could be three dimensional,
thereby including sculpture. From 1928, museum objects were likely to be included by document
lists within definitions of "document" (e.g. DUP 33). The overwhelming practical concern of
document lists was with printed documents, so the question of how far the definition of
"document" could be extended received little direct attention. Occasionally a thoughtful writer
would discuss the topic, perhaps because interested in some novel form of signifying object, such
as educational toys, or because of a desire to theorize.

Data warehousing

Data warehouse (DW) is a repository of an organization's electronically stored data. Data

warehouses are designed to manage and store
the data whereas the Business Intelligence (BI)
focuses on the usage of data to facilitate
reporting and analysis.[18]
The purpose of a data warehouse is to house
standardized, structured, consistent, integrated,
correct, cleansed and timely data, extracted from
various operational systems in an organization.
The extracted data is integrated in the data
warehouse environment in order to provide an
enterprise wide perspective, one version of the
truth. Data is structured in a way to specifically
address the reporting and analytic requirements.
An essential component of a data
warehouse/business intelligence system is the
metadata and tools to manage and retrieve metadata. Ralph Kimball describes metadata as the
DNA of the data warehouse as metadata defines the elements of the data warehouse and how
they work together.
Kimball et al. refers to three main categories of metadata: Technical metadata, business
metadata and process metadata. Technical metadata is primarily definitional while business
metadata and process metadata are primarily descriptive. Keep in mind that the categories
sometimes overlap.

Technical metadata defines the objects and processes in a DW/BI system, as seen from a
technical point of view. The technical metadata includes the system metadata which defines
the data structures such as: Tables, fields, data types, indexes and partitions in the relational
engine, and databases, dimensions, measures, and data mining models. Technical metadata
defines the data model and the way it is displayed for the users, with the reports, schedules,
distribution lists and user security rights.

Business metadata is content from the data warehouse described in more user friendly
terms. The business metadata tells you what data you have, where it comes from, what it
means and what its relationship is to other data in the data warehouse. Business metadata
may also serves as documentation for the DW/BI system. Users who browse the data
warehouse are primarily viewing the business metadata.

Process metadata is used to describe the results of various operations in the data warehouse.
Within the ETL process all key data from tasks are logged on execution. This includes start
time, end time, CPU seconds used, disk reads, disk writes and rows processed. When
troubleshooting the ETL or query process, this sort of data becomes valuable. Process
metadata is the fact measurement when building and using a DW/BI system. Some
organizations make a living out of collecting and selling this sort of data to companies - in
that case the process metadata becomes the business metadata for the fact and dimension
tables. Process metadata is in interest of business people who can use the data to identify the
users of their products, which products they are using and what level of service they are
receiving.

A data warehouse is a place where data is stored for archival, analysis and security purposes.
Usually a data warehouse is either a single computer or many computers (servers) tied together
to create one giant computer system.

Data can consist of raw data or formatted data. It can be on various types of topics including
organization's sales, salaries, operational data, summaries of data including reports, copies of
data, human resource data, inventory data, external data to provide simulations and analysis, etc.

Besides being a store house for large amount of data, they must possess systems in place that
make it easy to access the data and use it in day to day operations. A data warehouse is
sometimes said to be a major role player in a decision support system (DSS). DSS is a technique
used by organizations to come up with facts, trends or relationships that can help them make
effective decisions or create effective strategies to accomplish their organizational goals.

Data Warehousing Models

Here are many different models of data warehouses. Online Transaction Processing, which is a
data warehouse model, is built for speed and ease of use. Another type of data warehouse model
is called Online Analytical processing, which is more difficult to use and adds an extra step of
analysis within the data. Usually it requires more steps which slows the process down and
requires much more data in order to analyze certain queries.

In addition to this model, one of the more common data warehouse models include a data
warehouse that is subject oriented, time variant, non volatile and integrated. Subject oriented
means that data is linked together and is organized by relationships. Time variant means that any
data that is changed in the data warehouse can be tracked. Usually all changes to data are
stamped with a time-date and with a before and after value, so that you can show the changes
throughout a period of time. Non volatile means that the data is never deleted or erased. This is a
great way to protect your most crucial data. Because this data is retained, you can continue to use
it in a later analysis. Finally, the data is integrated, which means that a data warehouse uses data
that is organizational wide instead of from just one department.

Besides the term data warehouse, a term that is frequently used is a data mart. Data marts are
smaller and less integrated data housings. They might be just a database on human resources
records or sales data on just one division.

Types of Data Warehouses

With improvements in technology, as well
as innovations in using data warehousing
techniques, data warehouses have changed
from Offline Operational Databases to
include an Online Integrated data
warehouse.

Offline Operational Data Warehouses are data warehouses where data is usually copied and
pasted from real time data networks into an offline system where it can be used. It is usually the
simplest and less technical type of data warehouse.

Offline Data Warehouses are data warehouses that are updated frequently, daily, weekly or
monthly and that data is then stored in an integrated structure, where others can access it and
perform reporting.

Real Time Data Warehouses are data warehouses where it is updated each moment with the
influx of new data. For instance, a Real Time Data Warehouse might incorporate data from a
Point of Sales system and is updated with each sale that is made.

Integrated Data Warehouses are data warehouses that can be used for other systems to access
them for operational systems. Some Integrated Data Warehouses are used by other data
warehouses, allowing them to access them to process reports, as well as look up current data.

Advantages & Disadvantages

The number one reason why you should implement a data warehouse is so that employees or end
users can access the data warehouse and use the data for reports, analysis and decision making.
Using the data in a warehouse can help you locate trends, focus on relationships and help you
understand more about the environment that your business operates in.

Data warehouses also increase the consistency of the data and allow it to be checked over and
over to determine how relevant it is. Because most data warehouses are integrated, you can pull
data from many different areas of your business, for instance human resources, finance, IT,
accounting, etc.

While there are plenty of reasons why you should have a data warehouse, it should be noted that
there are a few negatives of having a data warehouse including the fact that it is time consuming
to create and to keep operating.

You might also have a problem with current systems being incompatible with your data. It is also
important to consider future equipment and software upgrades; these may also need to be
compatible with you data.

Finally, security might be a huge concern, especially if your data is accessible over an open
network such as the internet. You do not want your data to be viewed by your competitor or
worse hacked and destroyed.

Normalized versus dimensional approach for storage of data

There are two leading approaches to storing data in a data warehouse — the dimensional
approach and the normalized approach. The dimensional approach, whose supporters are referred
to as “Kimballites”, believe in Ralph Kimball’s approach in which it is stated that the data
warehouse should be modeled using a Dimensional Model/star schema. The normalized
approach, also called the 3NF model, whose supporters are referred to as “Inmonites”, believe in
Bill Inmon's approach in which it is stated that the data warehouse should be modeled using an
E-R model/normalized model.

In a dimensional approach, transaction data are partitioned into either "facts", which are
generally numeric transaction data, or "dimensions", which are the reference information that
gives context to the facts. For example, a sales transaction can be broken up into facts such as the
number of products ordered and the price paid for the products, and into dimensions such as
order date, customer name, product number, order ship-to and bill-to locations, and salesperson
responsible for receiving the order.

A key advantage of a dimensional approach is that the data warehouse is easier for the user to
understand and to use. Also, the retrieval of data from the data warehouse tends to operate very
quickly. Dimensional structures are easy to understand for business users, because the structure
is divided into measurements/facts and context/dimensions. Facts are related to the
organization’s business processes and operational system whereas the dimensions surrounding
them contain context about the measurement (Kimball, Ralph 2008).

The main disadvantages of the dimensional approach are:

1. In order to maintain the integrity of facts and dimensions, loading the data warehouse
with data from different operational systems is complicated, and
 2. It is difficult to modify the data warehouse structure if the organization adopting the
dimensional approach changes the way in which it does business.

In the normalized approach, the data in the data warehouse are stored following, to a
degree, database normalization rules. Tables are grouped together by subject areas that reflect
general data categories (e.g., data on customers, products, finance, etc.). The normalized
structure divides data into entities, which creates several tables in a relational database. When
applied in large enterprises the result is dozens of tables that are linked together by a web of
joints. Furthermore, each of the created entities is converted into separate physical tables when
the database is implemented (Kimball, Ralph 2008). The main advantage of this approach is that
it is straightforward to add information into the database. A disadvantage of this approach is that,
because of the number of tables involved, it can be difficult for users both to:

1. join data from different sources into meaningful information and then
2. Access the information without a precise understanding of the sources of data and of
the data structure of the data warehouse.

It should be noted that both normalized – and dimensional models can be represented in entity-
relationship diagrams as both contain jointed relational tables. The difference between the two
models is the degree of normalization.

These approaches are not mutually exclusive, and there are other approaches. Dimensional
approaches can involve normalizing data to a degree (Kimball, Ralph 2008).

Data warehouses versus operational systems

Operational systems are optimized for preservation of data integrity and speed of recording of
business transactions through use of database normalization and an entity-relationship model.
Operational system designers generally follow the Codd rules of database normalization in order
to ensure data integrity. Codd defined five increasingly stringent rules of normalization. Fully
normalized database designs (that is, those satisfying all five Codd rules) often result in
information from a business transaction being stored in dozens to hundreds of tables. Relational
databases are efficient at managing the relationships between these tables. The databases have
very fast insert/update performance because only a small amount of data in those tables is
affected each time a transaction is processed. Finally, in order to improve performance, older
data are usually periodically purged from operational systems.

Data warehouses are optimized for speed of data analysis. Frequently data in data warehouses
are demoralized via a dimension-based model. Also, to speed data retrieval, data warehouse data
are often stored multiple times—in their most granular form and in summarized forms called
aggregates. Data warehouse data are gathered from the operational systems and held in the data
warehouse even after the data has been purged from the operational systems.
Benefits
Some of the benefits that a data
warehouse provides are as follows:

A data warehouse provides a

common data model for all data
of interest regardless of the
data's source. This makes it
easier to report and analyze
information than it would be if
multiple data models were used
to retrieve information such as
sales invoices, order receipts,
general ledger charges, etc.

Prior to loading data into the data warehouse, inconsistencies are identified and resolved.
This greatly simplifies reporting and analysis.

Information in the data warehouse is under the control of data warehouse users so that, even
if the source system data are purged over time, the information in the warehouse can be
stored safely for extended periods of time.

Because they are separate from operational systems, data warehouses provide retrieval of
data without slowing down operational systems.

Data warehouses can work in conjunction with and, hence, enhance the value of operational
business applications, notably customer relationship management (CRM) systems.

Data warehouses facilitate decision support system applications such as trend reports (e.g.,
the items with the most sales in a particular area within the last two years), exception reports,
and reports that show actual performance versus goals.

Data warehouses can record historical information for data source tables that are not set up to
save an update history.

What is Data Management?

Data Management is a broad field of study, but essentially is the
process of managing data as a resource that is valuable to an
organization or business. One of the largest organizations that
deal with data management, DAMA (Data Management
Association), states that data management is the process of
developing data architectures, practices and procedures dealing
with data and then executing these aspects on a regular basis.
There are many topics within data management, some of the
more popular topics include data modeling, data warehousing, data movement, database
administration and data mining.
Data Modeling
Data modeling is first creating a structure for the data that you collect and use and then
organizing this data in a way that is easily accessible and efficient to store and pull the data for
reports and analysis. In order to create a structure for data, it must be named appropriately and
show a relationship with other data. It also must fit appropriately in a class. For instance, if you
have a database of media, you might have a hierarchal structure of objects that include photos,
videos, and audio files. Within each category, you can classify objects accordingly.

Data Warehousing
Data warehousing is storing data effectively so that it can be accessed and used efficiently.
Different organizations collect different types of data, but many organizations use their data the
same way, in order to create reports and analyze their data to make quality business decisions.
Data warehousing is usually an organizational wide repository of data, however for very large
corporations in can encompass just one office or one department.

Data Movement
Data movement is the ability to move data from one place to another. For instance, data needs to
be moved from where it is collected to a database and then to an end user, but this process takes
quite a bit of logistic insight. Not only do all hardware, applications and data collected need to be
compatible with one another, they must also be able to be classified, stored and accessed with
ease within an organization. Moving data can be very expensive and can require lots of resources
to make sure that data is moved efficiently, that data is secure in transit and that once it reaches
the end user it can be used effectively either to be printed out as a report, saved on a computer or
sent as an email attachment.

6.3: SUMMARY
In all spheres of business, including higher education, increasing emphasis is being placed on the
role of Information Technology in becoming more competitive. More effort is being placed on
aligning the goals of IT with the corporate strategic plan. Attention is being focused on the value
of the investment in information resources and its potential, through improved decision support,
to gain a competitive advantage.
Corporate data processing has traditionally had an operational focus, rather than a decision and
analysis support focus. More and more information was available to executives via standard
management reports, but there was no unified approach to placing analysis tools and supporting
data in the hands of these decision makers. Data Warehousing is seen as the technology which
attempts to address this problem.
Data Warehousing began to be a popular term in the mid 90’s, even though the concepts had
been practiced in some places for many years. The emergence of Data Warehousing as a so-
called new technology came about for a variety of reasons.
• executive decision-making was becoming increasingly dependent on accurate up-to-date
information, in order to remain competitive
• executives and their staffs were being drowned in a flood of detailed information from
which it was difficult to plot strategies and analyse trends
 • requests for ad hoc analysis and queries had to be programmed by computer
professionals, already laboring with a lengthy backlog
• a multitude of factors prevented executives from performing their own analyses and
creating their own enquiries on the data
This report documents a study into Data Warehousing and its application to providing
management assistance at Avondale College, a small independent University in New South
Wales, Australia. The report describes a pilot project at Avondale College which set out to build
a data warehouse, develop decision support models and implement business intelligence desktop
tools.
Broad Objectives
• provide a system that assists in clarifying goals and determining strategies
• provide an information system that is aligned with business goals
• integrate existing diverse data sources
• support decision making with enquiry, reporting, analysis and data mining tools
• support users with training, documentation and on-going support
After analysing a broad spectrum of management needs, two factors were chosen from the
academic administration area that were considered to be of paramount importance, that were not
available from the current system, but that could be delivered via a data warehouse with
appropriate business intelligence tools. The two factors were:
1. cohort retention rates
2. student performance

6.4: Glossary

One of the best forms of document protection against fire, earthquakes, flooding, hurricanes, and
any other form of disaster is through the use of document imaging. Do you have a disaster
recovery plan?

Thousands of organizations around the world use document-imaging everyday instead of paper
filing systems for safe archiving purposes, and at the same time are able to offer a faster
document response time to their
customers. The benefits of document
imaging over paper or microfilm systems,
aside from lower costs and increased
customer service, include allowing a
single computer to store millions of pages
onto a desktop, accessible at the click of a
button, with very little storage space
required. For example, a single CD can
hold up to 15,000 pages which is
equivalent to four drawers in a standard
filing cabinet

Until recently, document imaging was a

complex technology involving expensive
specialized databases, optical storage
devices, and various document scanners. Today businesses can now utilize this technology
through the use of imaging conversion specialists, such as Offsite Data
Depot.
Document imaging is the conversion of paper documents into electronic images on your
computer. All the documents that a company has stored and filed are run through a high-speed
scanner that photographs the material and then indexes it into a file. The files are electronically
converted and a high-resolution photocopy is stored on the hard drive or optical disk. Once
recorded onto the desired media (CD-ROM, DVD ROM, secured server), these documents can
be retrieved effortlessly in seconds. Files can still be stored, shared, viewed, and even emailed.
When paper documents are received in an office, they must be organized in order to be
useful. They are usually labeled, sorted, stapled, placed in folders, and filed in a
cabinet. Without these steps nothing could be found in a busy workplace. Despite the many
efforts to move away from paper-based transactions, document imaging remains the technology
of choice for tackling mission-critical transactional challenges such as expediting account or loan
applications, fulfilling orders, processing claims, reconciling accounts payables, and supporting
customer service.
Electronic documents are no different. A document imaging system should provide
several different methods of organizing information for future use. This is why we use industry
specific software which is indeed the "state of the art" in electronic document
management. Each file can be accessed within seconds by typing in any key word or phrase that
a company would already use to manually look up a file, thus making your workforce more time
efficient and productive.
Document imaging will:
• Enable you to manage millions of paper files and retrieve the one you need in a matter of
seconds.
• Be a pleasure to use, whether you are the individual that uses the files, the records manager, or
the IT manager.
• Let you share documents with other employees while protecting confidential information.
• Allow you to email, fax, or look online with the click of a mouse.
• Provide an easier way to share documents with other offices or take them on the road when
necessary.
• Conform to the manner in which you work rather than force you to change your current tasks

New feature: secure online retrieval

Offsite's web repository allows organizations to better manage their paper documents by
enabling them to store and access them electronically. This approach has significant advantages
over filing in a traditional metal file cabinet, such as: maximized office space, cost savings as a
result of a reduction in paper copies made, and disaster recovery benefits since files are backed
up electronically and hosted on Offsite Data Depot's secure server.

How does it work?

Paper documents are scanned using very sophisticated imaging software and then they are
converted into ".tiff" files, an industry recognized file format. The newly created digital images
are then uploaded to Offsite's secure online repository. Once the documents are put into a
cabinet, an individual can log in and start viewing the information online. This process takes no
more than a few minutes to complete which makes it very useful for businesses that need
information in a hurry.

Benefits of Web Based Repositories:

• Data is accessible at any time and by anyone globally with browser capability
and log in information.
• Huge benefits for geographically dispersed clientele.
• Access over 128-bit encrypted SSL connection.
• Digital certificate guarantees trusted source.
• Secure online backup means virtually no chance of data loss in the event of
hardware failure.
• Ability to create notes for a particular document to share with coworkers or
clients.
• Online search capabilities allow you to find text embedded in documents with
OCR.
Email, print, or download the documents with ease

6.5: CHECK YOUR PROGRESS

1: What are Analog signals & Digital signals?

2: What is Technical Metadata?
3: What is Real Time Data Warehouses?

6.6: REFERENCE

1. Hüner, K.; Otto, B.; Österle, H.: Collaborative management of business metadata, in:
International Journal of Information Management, 2011
2. METADATA STANDARDS AND METADATA REGISTRIES: AN OVERVIEW
3. National Archives of Australia (2002). "AGLS Metadata Element Set - Part 2: Usage
Guide - A non-technical guide to using AGLS metadata for describing resources".
Retrieved 17 March 2010.
4. Bagley, Philip (Nov 1968), Extension of programming language concepts, Philadelphia:
University City Science Center
5. "The notion of "metadata" introduced by Bagley". Solntseff, N+1; Yezerski, A (1974), A
survey of extensible programming languages, Annual Review in Automatic
Programming, 7, Elsevier Science Ltd, pp. 267–307,

6.7: ANSWER TO CHECK YOUR PROGRESS

1: Read 6.1.1.
2: Read 6.2.
3: Read 6.2.
 Unit 7

Content

7.1: M-commerce Introduction, meaning,

applications
7.2: Importance of M-commerce in the present
world of business
7.3: Summary
7.4: Glossary
7.5: Check Your Progress
7.6: Reference
7.7: Answer to Check Your Progress

7.1: M- Commerce Introduction, Meaning & Applications

Mobile Commerce, also known as M-Commerce or mCommerce, is the ability to conduct

commerce using a mobile device, such as a mobile phone, a Personal digital assistant PDA, a
Smartphone, or other emerging mobile equipment such as dashpot mobile devices. Mobile
Commerce has been defined as follows:

"Mobile Commerce is any transaction, involving the transfer of ownership or rights to

use goods and services, which is initiated and/or completed by using mobile access to computer-
mediated networks with the help of an
electronic device.

Mobile Commerce refers to wireless

electronic commerce used for conducting
commerce or business through a handy
device like cellular phone or Personal Digital Assistant (PDAs). It is also said that it is the next
generation wireless e-commerce that needs no wire and plug-in devices. Mobile commerce is
usually called as 'm-Commerce' in which user can do any sort of transaction including buying
and selling of the goods, asking any services, transferring the ownership or rights, transacting
and transferring the money by accessing wireless internet service on the mobile handset itself.

The next generation of commerce would most probably be mobile commerce or m-commerce.
Presuming its wide potential reach all major mobile handset manufacturing companies are
making WAP enabled smart phones and providing the maximum wireless internet and web
facilities covering personal, official and commerce requirement to pave the way of m-commerce
that would later be very fruitful for them.

Advantage of m-Commerce
M-commerce has several major advantages over its fixed counterparts because of its specific
inbuilt characteristics such as ubiquity, personalization, flexibility, and distribution, mobile
commerce promises exceptional business market potential, greater efficiency and higher
fruitfulness.

Thus it is not surprising that mobile commerce is emerging much faster than its fixed
counterpart. M-commerce is more personalized than e-commerce and thus needs a gentle
approach to appraise m-commerce applications.

Areas / Uses of m-commerce

In the current commerce industry, mobile commerce or M-Commerce has been entered in
finance, services, retails, tele-communication and information technology services. In these
sectors, M-Commerce is not only being widely accepted but also it is being more used as a
popular way of business/ commerce.

Finance Sectors
Mobile Commerce works vastly in finance sector including all big and major financial institutes,
banks, stock market and share brokers. Whenever any user needs money or wants any sort of
banking and finance related services, he/she can access the services or register services via voice
calling or via Short Message Services (SMS) services. WAP based mobile handsets allow the
user to access the official website of the institute.

User can transact money or transfer money, or pay the bill from its bank account using mobile
commerce facilities. Banks also provide round the clock customer care services, which can be
used any time through voice calling. Some customer care services are also provides non-voice
services on mobile that is known as insta-alert facility.
While in the stock market, the user can access the stock market quotes and get in live touch with
current trading status on its mobile in two forms either voice (customer assistance) or non-voice
(sms alerts) or both.
The share broker sends market trends and tips of trading on their clients' mobile. Also broker can
suggest the appropriate stock for intra-day trading to their users.

Telecommunication Sectors

Mobile has played a giant role in communication

technology through its versatility and superiority.
The ubiquity and easy usage has further made it
extremely popular across the globe. It has already
surpassed the fixed phone in the world. Software
platform is essential for operating any mobile and
this tool has revolutionized the communication
world because of its functioning as a small
computer.

The booming popularity has forced the corporate

world to develop a new commerce platform that
can reach to masses. Mobile commerce has attracted massive traffic because of its unique
characteristics. The user can change the service of any financial institute or banks if gets better
product and service or user is unsatisfied with the service of the subscribing company.
Besides this several bills can be paid using mobile and user can also check the available balance,
the status of cheques, the status of requested processing and customer care support.

EXAMPLE:
Bharti Airtel, Asia´s leading integrated telecom services provider, today announced the launch of
its m-Commerce service ‘mChek on Airtel´ on the voice platform. This service ensures
seamless and secure use of voice (IVR) for m-Commerce transactions for all Airtel mobile
customers. The customer has to call 543219 to access the service which is toll free

The mChek on Airtel service on voice will enable the 100-million-plus Airtel customers to pay
Airtel mobile and fixed-line bills, recharge Airtel pre-paid and digitalTV accounts, recharge
Delhi-Gurgaon expressway toll tags, pay insurance premiums, buy gifts, tickets and shop using
their mobile phones. To avail this service, Airtel customers have to call 543219, create their own
6 digit mChekPIN and link their VISA / Mastercard credit card. The one-time registration links
the user´s credit card automatically to the mChek on Airtel service. For all future transactions the
user is required to only enter a six-digit mChekPIN on their registered mobile number to
authorize the transaction.
mChek on Airtel provides an on-demand solution for mobile payments with a unique two-step
authentication process, the mChekPIN and the Mobile Number. mChek on Airtel is already
available on various access mediums like SMS, USSD , J2ME and SIM application and WAP.

Customer benefits for mChek on Voice for Post-paid customers

• Pay their own postpaid bill
• Pay for others postpaid bill
• Make full or partial bill payment (customer driven)
• Recharge for other prepaid customers
• Pay any Airtel landline Bill
• Recharge his Digital TV account
• Recharge Delhi-Gurgaon Expressway toll tag ( for Delhi/NCR users )
• All other merchant payments

Customer benefits for mChek on Voice for Pre-paid customers

• Recharge for self
• Pay Landline Bill
• Recharge Digital TV account
• Recharge Delhi-Gurgaon Expressway toll tag ( for Delhi/NCR users)
• All other merchant payments

Several dealings can be handled through mobile phones.

Service / Retail sectors

Service and Retail sectors are also among the leading sectors, which have nurtured most from
mobile commerce. M-Commerce has proved a major boon for these sectors. Several business
dealings no matter how big or small are being finalized on the mobile phone. Customer would be
able to book the order, can hire carrier/courier services and above all could also pay the dues
related to it through mobile.

Information Sector
After the bursting of dotcom bubble, e-commerce has gone downwards to hell. But the evolution
of mobile commerce has again worked as ambrosia for them. A separate sector has been evolved
to exercise on this field for the IT experts. The webmasters have skilfully exploited this new area
of IT-enabled commerce.
In the IT field, mobile commerce has been used massively to deliver financial news, stock
updates, sports figures and traffic updates and many more onto a single handheld device 'mobile'.

History of m-commerce
Despite of huge popularity of mobile commerce, it is yet in the initial stage and can be further
expand in to all the fields, which affect the human life. The assumption of mobile commerce is
not so young as it mushroomed so early from adopting this technology.

It initially begins with the use of wireless POS (Point Of Sale) swipe terminals and has since
then made its way into cellular phones and PDA's (Personal Digital Assistants). The first
enabling m-commerce technologies were presented through Wireless Application Protocol
(WAP) and i-mode mobile Internet service. WAP builds on digital phone technology and first
emerged on 2.5 G phone technology that allowed users to browse the Internet. This technology
cemented the way of m-commerce, which has strongly developed on 3G-phone technology.
Nokia has first introduced m-commerce application software Nokia toolkit version 4.0.

The future of m-Commerce seems extremely bright because several experiments are going on to
introduce the upgraded version of mobile likely to emerged with the evolution of 4G mobile
technology.
Top 5 Mobile Commerce Trends for 2010
Considering that most people would rather lose their
wallet than misplace their cell phone, it’s fitting that
the mobile world is quickly becoming a new hub for
business. For many of us, our cell phone never leaves
our side. It holds a place at the dinner table, is easily
accessible in your bag’s front pocket, and often,
somehow it even manages to end up sharing your
pillow at night. Busy schedules mean people are often
on the move and when marketers and companies can’t
reach consumers at their computers, on TV, before the
previews at the movies, with billboards, or magazine
and newspaper ads, they must feel assured that they can still reach them on their cell phones.
 Mobile commerce, or m-commerce, is simply the ability to conduct business transactions
through a mobile device. With smart phone sales rising 49% in the first quarter of 2010, never
before has it been so easy to shop, anywhere, anytime from the palm of your hand. There is an
enormous amount of ongoing market research, and though there has been a variety of numbers
estimated and reported, they all conclude that mobile commerce is a profitable and rapidly
growing market.
By 2015, it’s estimated that shoppers from around the world will spend about $119
billion on goods and services bought via their mobile phones, according to a study by ABI
Research released this past February. In the United States alone, mobile shopping rose from $396
million in 2008 to $1.2 billion in 2009, and mobile campaign spending also increased by 25 to
30% over the past year, with companies shelling out just under $313 million according to the
same study. Senior Analyst Mark Beccue, said that he’s forecasting U.S. sales to reach about
$2.2 billion in 2010.

Here are five mobile commerce trends to keep an eye on for the remainder of 2010.

1. Bargain Hunting
2. Mobile Ticketing
3. Mobile Banking
4. Tangible Goods
5. Marketing

1: Bargain Hunting
It would seem that mobile purchasing often lends itself to an
impulse buy. Maybe you just have to suddenly download that song
from the iTunes Store or really want to make sure you have tickets
to that hot concert. In this case, it’s the savvy shopper that has
taken note of mobile commerce. Beccue said that in the fourth
quarter of 2009, he started to notice something unexpected and a
bit “weird.”
Bargain hunting has become extremely popular with apps
like RedLaser that allow users to scan product bar codes and
discover it’s various prices at different retailers. Shoppers are
melding the two worlds of online/mobile shopping with actual
physical shopping to make sure they get the best prices.

2: Mobile Ticketing
“Do you have the tickets?” We’ve all
been asked or have asked that question
always expecting an affirmative
answer, but despite our positive
thinking someone often forgets the
tickets. But that could very well be a
conversation and frustration of the past given that mobile ticketing transactions are expected to
exceed $100 billion worldwide by 2012, according to a study released this month by Juniper
Research. No doubt, the convenience of mobile ticketing, where customers can order, pay for,
and validate tickets anywhere or anytime from their cell phones, is a driving force in its
popularity.

1. Mobile ticketing is the process whereby customers can

order, pay for, obtain and validate tickets from any location and
at any time using mobile phones or other mobile handsets.
Mobile tickets reduce the production and distribution costs
connected with traditional paper-based ticketing channels and
increase customer convenience by providing new and simple
ways to purchase tickets. Mobile ticketing is a prime example
of horizontal telecommunication convergence.

2. Mobile ticketing is a method by which law enforcement agencies use in-car computers to
create traffic citations in the field, then print a hard copy for the offender. The advantages of
mobile ticketing include reduced paperwork time, reduced chance of tickets being made void by
human error and immediate accessibility of citation information by other departments

Applications for Mobile Tickets

Airline check-in

Cinema ticketing

Concert/Event ticketing

Consumer voucher distribution

Mass transit

Trade shows

Advantage of mobile tickets

Improved consumer convenience

Increased revenue by increasing accessibility of tickets

Reduced infrastructure costs (scanners retail at 30 times the cost of 1d scanners)

Reduced ticket printing/mailing costs

Using Mobile Tickets

Mobile Purchase
Over the past 10 years, e-commerce has exploded, with many consumers becoming increasingly
comfortable with purchasing online. The next logical step for consumers who are looking for
even more convenient methods of doing business is mobile purchase. This trend will be
accelerated by the increased functionality of today's mobile devices.

The International Air Transport Association (IATA) 2007 announced a global standard that
paves the way for global mobile phone check-in using two-dimensional (2D) bar codes. The
industry has set a deadline of the end of 2010 to implement 100% bar coded boarding passes
(BCBP). Upon full implementation, BCBP is said to be able to save the industry over US $500
million annually.
Mobile Tickets can be purchased in a variety of ways including online, via text messaging or
over the phone from a voice call, WAP page, or a secure mobile application. For repeated
purchases such as daily train tickets, mobile applications or text messaging are good options. The
drawbacks to text message purchasing is that either the vendor loses 40% of their revenue to the
mobile operator, or any credit card purchase has to be achieved through a web page as the SMS
has no security suitable for credit card entry, and very few ticket choices can be easily
remembered and entered by SMS.

SMS Purchase
SMS purchase is usually achieved by sending an SMS message containing a short code (e.g. GV
for a single adult ticket in Gothenburg, Sweden) to a service number. A return message is sent
containing the mobile ticket. Different ticket types can be ordered with a different code (e.g. GU
for a youth ticket or GN as a night tariff ticket in Gothenburg). The use of different ordering
codes enables creating a variety of ticket types, either time- or distance based pricing and
different zone systems.

The price of the ticket can be added to the users mobile phone bill or debited from their pre-paid
service using premium SMS billing. The main business limitation is that when premium SMS is
used for billing, around 40% of the transaction value is retained by the mobile operator and sms
aggregator, which is not viable when the ticket has a conventional profit margin. The revenue
share model need to be re-negoatiated separately with teleoperators to suit for mobile ticketing.
Other methods for billing include having a mobile wallet that allows the phone user to charge
their credit card, but the limitation is the low usage volume of these kind of payment solutions.

Online Purchase
Online purchase is still an option for mobile tickets, allowing the user to setup an account and
choosing payment options etc.

Mobile Ticket Delivery

Delivery of tickets to mobile phones can be done in a variety of ways:

Text messaging (SMS) - visual inspection or OCR

Text messaging with WAP Push - visual inspection or OCR

Picture messaging (SMS, EMS, WAP Push and MMS) - usually uses a barcode

Dedicated Mobile application - which can store and render barcodes delivered via SMS,
GPRS, Bluetooth, IRDA or RFID. Barcodes rendered on the device by a dedicated
application have the advantage of being full screen without clutter, meaning faster and more
successful scanning. A dedicated mobile application can also help the user to organise and
sort their tickets better than when an SMS or MMS inbox is full of similar tickets, which is
especially useful for transport tickets.

Device RFID - This is the method proposed under the Near Field Communication (NFC)
specification but not yet in general use, except of Japanese Osaifu-Keitai.
Southend United Football Club is currently the only team in the UK to have a mobile ticketing
facility offered to fans.
Very few phones outside Japan have RFID/NFC tags and so this method of delivery is largely
unsupported. Picture messaging is supported by almost all phones and is generally the delivery
method of choice. It usually requires the sender to know the phone model in advance so that the
picture is rendered at the correct resolution. Text-only messaging is supported by all mobile
phones and is the simplest method of delivery.

Mobile Ticket Scanning

Visually validated mobile tickets do not require a scan device. Most forms of mobile tickets
require some form of device to read the ticket from the user's device. Picture-based messages
require a laser scanner (for 1-dimensional/linear barcodes) or camera based imager (for 2-
dimensional barcodes) to photograph the message and decode it into a ticket ID. Text-based
codes use OCR software.Near Field Communication devices scan using an RFID reader.
Each of the above methods has its specific benefits and drawbacks. Optically reading the display
of a cell phone is heavily influenced by the quality of the display (resolution, size of pixels,
reflections). RFID is only supported by a very few phones yet.

Mobile Ticket Redemption

Visually validated mobile tickets are validated without connection to a back office system. Other
forms of mobile ticket systems contact a server that is able to verify the ticket and record that it
has been used.

New systems that make use of encryption of the data inside the barcode enable off-line scanning
and validation, which is especially important if users are purchasing tickets immediately prior to
use, and the portable venue or on-vehicle scanning devices cannot always have a connection to
the live ticket database. (Many transport ticketing systems, such as the London Oyster card travel
system and the M-PhaTic system of the Swedish state railways SJ are designed so that scanners
can operate as disconnected islands when connectivity to central systems is lost.)

Solutions

Validatio
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SMS.

3: Mobile Banking
Mobile banking (also known as M-Banking, mbanking, SMS Banking) is a term used for
performing balance checks, account transactions, payments, credit applications and other
banking transactions through a mobile device such as a mobile phone or Personal Digital
Assistant (PDA). The earliest mobile banking services were offered over SMS. With the
introduction of the first primitive smart phones with WAP support enabling the use of the mobile
web in 1999, the first European banks started to offer mobile banking on this platform to their
customers.

Mobile banking has until recently (2010) most often been performed via SMS or the Mobile
Web. Apple's initial success with iPhone and the rapid growth of phones based
on Google's Android (operating system) have led to increasing use of special client programs,
called apps, downloaded to the mobile device.

A mobile banking conceptual model

In one academic model, mobile banking is defined as:
Mobile Banking refers to provision and availment of banking- and financial services with the
help of mobile telecommunication devices. The scope of offered services may include facilities
to conduct bank and stock market transactions, to administer accounts and to access customised
information."

According to this model Mobile Banking can be said to consist of three inter-related concepts:

Mobile Accounting

Mobile Brokerage

Mobile Financial Information Services

Most services in the categories designated Accounting and Brokerage are transaction-based. The
non-transaction-based services of an informational nature are however essential for conducting
transactions - for instance, balance inquiries might be needed before committing a money
remittance. The accounting and brokerage services are therefore offered invariably in
combination with information services. Information services, on the other hand, may be offered
as an independent module.
Mobile phone banking may also be used to help in business situations

Trends in mobile banking

The advent of the Internet has enabled new ways to conduct banking business, resulting in the
creation of new institutions, such as online banks, online brokers and wealth managers. Such
institutions still account for a tiny percentage of the industry.

Over the last few years, the mobile and wireless market has been one of the fastest growing
markets in the world and it is still growing at a rapid pace. According to the GSM
Association and Ovum, the number of mobile subscribers exceeded 2 billion in September 2005,
and now exceeds 2.5 billion (of which more than 2 billion are GSM).

With mobile technology, banks can offer services to their customers such as doing funds transfer
while travelling, receiving online updates of stock price or even performing stock trading while
being stuck in traffic. Smartphone’s and 3G connectivity provide some capabilities that older text
message-only phones do not.
According to a study by financial consultancy Celent, 35% of online banking households will be
using mobile banking by 2010, up from less than 1% today. Upwards of 70% of bank center call
volume is projected to come from mobile phones. Mobile banking will eventually allow users to
make payments at the physical point of sale. "Mobile contactless payments” will make up 10%
of the contactless market by 2010. Another study from 2010 by Berg Insight forecasts that the
number of mobile banking users in the US will grow from 12 million in 2009 to 86 million in
2015. The same study also predicts that the European market will grow from 7 million mobile
banking users in 2009 to 115 million users in 2015.

Many believe that mobile users have just started to fully utilize the data capabilities in
their mobile phones. In Asian countries like India, China, Bangladesh, Indonesia and Philippines,
where mobile infrastructure is comparatively better than the fixed-line infrastructure, and
in European countries, where mobile phone penetration is very high (at least 80% of consumers
use a mobile phone), mobile banking is likely to appeal even more.

MOBILE BANKING & THE RESERVE BANK OF INDIA

The Reserve Bank of India (RBI) has proposed guidelines to

banks for payments through mobile phones. Bank
customers may no longer need to log on to the Internet or
visit branches. The RBI has come out with guidelines for
mobile.
We’ve been getting used to mobile banking for a while now.
Most of us have our accounts setup online and check our
balances on the phone. But according to data released by
com Score, 13.2 million people accessed their bank accounts
from their phones during the month of April alone, which is
a 70% increase from a year ago. And similarly, the number
of people using mobile banking apps more than doubled, to
about 5 million in the last year.

1. Introduction

1.1 With the rapid growth in the number of mobile phone subscribers in India (about 261 million
as at the end of March 2008 and growing at about 8 million a month), banks have been exploring
the feasibility of using mobile phones as an alternative channel of delivery of banking services.
A few banks have started offering information based services like balance enquiry, stop payment
instruction of cheques, record of last five transactions, location of nearest ATM/branch etc.
Acceptance of transfer of funds instruction for credit to beneficiaries of same/or another bank in
favor of pre-registered beneficiaries have also commenced in a few banks. Considering that the
technology is relatively new and due care needs to be taken on security of financial transactions,
there has been an urgent need for a set of operating guidelines that can be adopted by banks.

1.2 For the purpose of these Guidelines, “mobile payments” is defined as information exchange
between a bank and its customers for financial transactions through the use of mobile phones.
Mobile payment involves debit/credit to a customer’s account’s on the basis of funds transfer
instruction received over the mobile phones.

1.3 Providing the framework for enabling mobile payments services to banking customers would
generally involve the collaboration of banks, mobile payments service providers and mobile
network operators (MNOs). The service can also be provided as a proximity payment system,
where the transactions are independent of the MNOs. In mobile payment systems, the banks
provide the basic service framework, ensure compliance to KYC/AML norms, creates a risk
management and mitigation framework, and ensures settlement of funds. The mobile payments
service providers are intermediaries for providing the technology framework for the
implementation of the mobile payments services. The mobile network operators provide the
telecom infrastructure and connectivity to the customers. Their role is limited to providing the
SMS/WAP/GPRS/USSD/NFC GSM or CDMA voice and data services connectivity and in
hosting the certain technology solutions like USSD. In a Non-MNO based systems, proximity or
contactless channels like IRDA, RFID, Optical, NFC, etc. are used for communication between
POS and the mobile phone of the customer.

1.4 As a first step towards building a mobile payment framework in India, these guidelines are
meant only for banking customers – within the same bank and across the banks. It would be the
responsibility of the banks offering mobile payment service to ensure compliance to these
guidelines.

1.5 A brief description of the regulatory framework for mobile payments in a few countries is given
at Annex – I.

2. Regulatory & Supervisory Issues

2.1 Only such banks which are licensed and supervised in India and have a physical presence in
India will be permitted to offer mobile payment services to residents of India.

2.2 The services should be restricted to only to bank accounts/ credit card accounts in India
which are KYC/AML compliant.

2.3 Only Indian Rupee based services should be provided.

2.4 Banks may use the services of Business Correspondents for extending this facility, to their
customers. The guidelines with regard to use of business correspondent would be as per the RBI
circular on Business correspondents issued from time to time.

2.5 The guidelines issued by RBI on ‘Risks and Controls in Computers and
Telecommunications’ vide circular DBS.CO.ITC.BC. 10/ 31.09.001/ 97-98 dated 4th February
1998 will equally apply to Mobile payments, since Mobile devices used for this purpose have
embedded computing and communication capabilities.

2.6 The RBI guidelines on “Know Your Customer (KYC)” and “Anti Money Laundering
(AML)” as prescribed by RBI from time to time would be would be applicable to customers
opting for mobile based banking service.
3. Registration of customers for mobile service

3.1 Banks should offer mobile based banking service only to their own customers.

3.2 Banks should have a system of registration before commencing mobile based payment
service to a customer.

3.3 There can be two levels of mobile based banking service - the first or basic level in the nature
of information like balance enquiry, SMS alert for credit or debit, status of last five transactions,
and many other information providing services and the second or standard level in the nature of
financial transactions such as payments, transfers and stop payments. The risk associated with
the basic level of information services is much less compared to the standard level of actual
payment services. Prior registration of the customers would be necessary irrespective of the type
of service requested. For the standard level service one time registration should be done through
a signed document.

4. Technology and Security Standards

4.1 The technology used for mobile payments must be secure and should ensure confidentiality,
integrity, authenticity and non-repudiability. An illustrative, but not exhaustive framework is
given at Annex-II.

4.2 The Information Security Policy of the banks may be suitably updated and enforced to take
care of the security controls required specially for mobile phone based delivery channel.

5. Inter-operability

5.1 When a bank offers mobile payments service, it may be ensured that customers having
mobile phones of any network operator should be in a position to request for service. Restriction,
if any, to the customers of particular mobile operator(s) may be only during the pilot phase.

5.2 To ensure inter-operability between banks and between their mobile payments service
providers, it is recommended that banks may adopt the message formats being developed by
Mobile Payments Forum of India (MPFI). Message formats such as ISO 8583 , which is already
being used by banks for switching of ATM transactions , may be suitably adapted for
communication between switches where the source and destination are credit card/ debit
cards/pre-paid cards.

5.3 The long term goal of mobile payment framework in India would be to enable funds transfer
from account in one bank to any other account in the same or any other bank on a real time basis
irrespective of mobile network a customer has subscribed to. This would require inter-operability
between mobile payments service providers and banks and development of a host of message
formats. Banks may keep this objective while developing solution or entering into arrangements
with mobile payments solution providers.

6. Clearing and Settlement for inter-bank funds transfer transactions

6.1 For inter-bank funds transfer transactions, banks can either have bilateral or multilateral
arrangements.

6.2 To meet the long term objective of a nation-wide mobile payment framework in India as
indicated at para 5.3 above, a robust clearing and settlement infrastructure operating on a 24x7
basis would be necessary. Pending creation of such an infrastructure on a national basis, banks
may enter in to multilateral arrangement and create Mobile Switches / Inter-bank Payment
Gateways with expressed permission from RBI.

7. Customer Complaints and Grievance Redressal Mechanism

7.1 The customer /consumer protection issues assume a special significance in view of the fact
that the delivery of banking services through mobile phones is relatively new. Some of the key
issues in this regard and the legal aspects pertaining to them are given at Annex-III.

8. Need for Board level approval

8.1 Banks should get the Mobile payments scheme approved by their respective boards / Local
board (for foreign banks) before offering it to their customers. The Board approval must
document the extent of Operational and Fraud risk assumed by the bank and the bank’s processes
and policies designed to mitigate such risk.

8.2 banks who have already started offering mobile payment service may review the position and
comply to these guidelines within a period of three months from issuance of these guidelines.

List of Abbreviations

AML Anti Money Laundering

CDMA Code Division Multiple Access
GPRS General Packet Radio Service
GSM Global System for Mobile
IDS Intruder Detection System
IRDA Infrared Data Association
ISO International Standards Organization ( Some times also
written as International Organization for Standardization)
IVR Integrated Voice Response
KYC Know Your Customer
MNO Mobile Network Operator
mPIN Mobile Personal Identification Number
MPFI Mobile Payment Forum of India
NFC Near Field communication.
OTP One Time Password
PCI-DSS Payment Card Industry Data Security Standard
PIN Personal Identification Number
RFID Radio Frequency Identification
SIM Subscriber Identity Module
SMS Short Messaging Service
USSD Unstructured Supplementary Service Data
WAP Wireless Application Protocol

International Experience
There is very little material available on the regulatory frame work for mobile payments by
central banks. Although there are a number of research articles available, they refer to the
practices available rather than regulatory guidelines. Efforts to collect specific regulatory
guidelines, from a few countries where person to person remittance through mobile channel has
been implemented, have not been a success. Mobile payment framework in most countries is
covered under the General Electronic Banking Guidelines. However, on the website of
Consultative Group for Assisting the Poor(CGAP), there are several discussion papers on mobile
payments. Examples of Kenya, Philippines, South Africa and Tanzania have been described in
great detail. In these countries, cash-in and cash-out for the purpose of remittance is permitted to
be done by the distributors of mobile companies. State Bank of Pakistan has also placed a 'Draft
policy paper on Regulatory Framework for Mobile Payments in Pakistan' on their website for
public comments.

Technology and Security Standards

The security controls/guidelines mentioned in this document are not exhaustive. The guidelines
should be applied in a way that is appropriate to the risk associated with services provided by the
bank through the mobile platform, the devices used, the delivery channels used (SMS, USSD,
WAP, WEB, SIM tool kit based, Smart phone application based, IVR, IRDA, RFID, NFC, voice,
etc) and the system which processes the mobile transactions and enables the interaction between
the customers, merchants, banks and other participants.

2. The mobile payments could get offered through various mobile network operator based
channels (SMS, USSD, WAP, WEB, SIM tool kit, Smart phone application based, IVR, voice,
etc) and non MNO based proximity or contactless channels (IRDA, RFID, Optical, NFC, etc)
and these various mobile channels offer various degrees of security and interaction capability.
While the objective of the RBI is to have a fully functional digital certificate based
inquiry/transaction capabilities to ensure the authenticity and non-repudiability, given the
complexities involved in getting this through all the channels and given the need for enabling
mobile payments to facilitate financial inclusion objectives, it is suggested that the banks
evaluate each of these channels in terms of security and risks involved and offer appropriate
services and transactions. Banks are also advised to provide appropriate risk mitigation measures
like transaction limit (per transaction, daily, weekly, monthly), transaction velocity limit, fraud
checks, AML checks etc. per channel depending on the nature of the security features, risk
perception by the bank offering the services and interaction capabilities.

3. It is suggested that the banks issue a new mobile pin (mPIN). To facilitate the mobile
payments mPIN may be issued and authenticated by the bank or by a mobile payment
application service provider appointed by the bank. Banks and the various service providers
involved in the m-banking should comply with the following security principles and practices
with respect to mPIN

a) Implement a minimum of 4 digit customer mPIN (6 digit mPIN may be the desirable goal)

b) Protect the mPIN using end to end encryption

c) Do not allow the mPIN to be in clear text anywhere in the network or the system

d) Authenticate the mPIN in tamper-resistant hardware such as HSM (hardware security

modules)

e) Store the PIN in a secure environment

f) In case of offline authentication, the banks should ensure that a proper process is put in place
to positively identify the customer the first time when the service is being enabled. An offline
PIN may be used as the authentication parameter with security levels being as strong as in the
case of online authentication. The bank may choose to issue its own offline PIN or adopt a
customer-defined PIN.

g) A second factor of authentication may be built-in for additional security and as such the
second factor can be of the choosing of the bank

4. All transactions that affect an account (those that result in to an account being debited or
credited, including scheduling of such activity, stop payments, etc) should be allowed only after
authentication of the mobile number and the mPIN associated with it in case of MNO based
payment service. In case of Non-MNO based mobile proximity payment, specific static or
dynamic identifier should be used as second factor authentication along with mPIN.. Two factor
authentication may be adopted even for transactions of information nature such as balance
enquiry, mini statements, registered payee details. ,

5. Proper system of verification of the mobile phone number should be implemented, wherever
possible. This is to guard against spoofing of the phone numbers as mobile phones would be
used as the second factor authentication. It may also be suggested but not mandatory, that either
card number or OTP (one time passwords) be used as the second factor authentication rather than
the phone number.

6. Proper level of encryption should be implemented for communicating from the mobile handset
to the bank’s server or the server of the mobile payments service provider, if any. Proper security
levels should be maintained for transmission of information between the bank and the mobile
payments service provider. The following guidelines with respect to network and system security
should be adhered to:

a) Use strong encryption for protecting the sensitive and confidential information of bank and
customers in transit

b) Implement application level encryption over network and transport layer encryption wherever
possible.

c) Establish proper firewalls, intruder detection systems ( IDS), data file and system integrity
checking, surveillance and incident response procedures and containment procedures.

d) Conduct periodic risk management analysis, security vulnerability assessment of the

application and network etc at least once in a year.

e) Maintain proper and full documentation of security practices, guidelines, methods and
procedures used in mobile payments and payment systems and keep them up to date based on the
periodic risk management, analysis and vulnerability assessment carried out.

f) Implement appropriate physical security measures to protect the system gateways, network
equipments, servers, host computers, and other hardware/software used from unauthorized
access and tampering. The Data Centre of the Bank and Service Providers should have proper
wired and wireless data network protection mechanisms.

7. The dependence of banks on mobile payments service providers may place knowledge of bank
systems and customers in a public domain. Mobile payment system may also make the banks
dependent on small firms ( i.e mobile payment service providers) with high employee turnover.
It is therefore imperative that sensitive customer data, and security and integrity of transactions
are protected. It is necessary that the mobile payments servers at the bank’s end or at the mobile
payments service provider’s end, if any, should be certified appropriately, say through a PCI
DSS certification or in compliance with each participant banks security guidelines. In addition,
banks should conduct regular information security audits on the mobile payments systems to
ensure complete security. Further, if a mobile payments service provider aggregates and
processes transaction, including verification of mPINs, additional security measures such as a
Hardware Security Module (HSM) must be deployed over and above link encryption to ensure
that mPIN data is protected adequately.

8. It is recommended that for channels such as WAP and WEB which do not contain the phone
number as identity, a separate login ID and password be provided as distinct from the internet
banking either by bank or the payment service provider. It is recommended that Internet Banking
login ids and passwords may not be allowed to be used through the mobile phones. Allowing
Internet banking login id and password usage on the mobile phone may compromise their usage
on the Internet banking channel. This restriction may be communicated to the customers while
offering mobile payments service. However, Internet Banking login ids and passwords can
allowed to be used through the mobile phones provided a) https connectivity through GPRS is
used and b) end to end encryption of the password and customer sensitive information happens.

9. Plain text SMS is the simplest form of communication through mobile phones, but is
vulnerable to tampering. As long as there is a second level of check on the details of the
transaction so as to guard against data tampering this mode of communication can be used for
financial messages of micro payment transactions (say about rupees One thousand five hundred)
and repetitive utility bill payment transactions (say not exceeding rupees two thousand five
hundred).
Customer Protection Issues
Considering the legal position prevalent, there is an obligation on the part of banks not only to
establish the identity but also to make enquiries about integrity and reputation of the prospective
customer. Therefore, even though request for opening a savings / current account can be
accepted over Mobile Telecommunication, these should be opened only after proper introduction
and physical verification of the identity of the customer using prevalent KYC norms.

2. From a legal perspective, security procedure adopted by banks for authenticating users needs
to be recognized by law as a substitute for signature. In India, the Information Technology Act,
2000, provides for a particular technology as a means of authenticating electronic record. Any
other method used by banks for authentication should be recognized as a source of legal risk.
Customers must be made aware of the said legal risk prior to sign up.

3. Under the present regime there is an obligation on banks to maintain secrecy and
confidentiality of customers‘ accounts. In the mobile payments scenario, the risk of banks not
meeting the above obligation is high on account of several factors. Despite all reasonable
precautions, banks may be exposed to enhanced risk of liability to customers on account of
breach of secrecy, denial of service etc., because of hacking/ other technological failures. The
banks should, therefore, institute adequate risk control measures to manage such risks.

4. As in an Internet banking scenario, in the mobile payments scenario too, there is very limited
or no stop-payment privileges for mobile payments transactions since it becomes impossible for
the banks to stop payment in spite of receipt of stop payment instruction as the transactions are
completely instantaneous and are incapable of being reversed. Hence, banks offering mobile
payments should clearly notify the customers the timeframe and the circumstances in which any
stop-payment instructions could be accepted.

5. The Consumer Protection Act, 1986 defines the rights of consumers in India and is applicable
to banking services as well. Currently, the rights and liabilities of customers availing of mobile
payments services are being determined by bilateral agreements between the banks and
customers. Considering the banking practice and rights enjoyed by customers in traditional
banking, banks’ liability to the customers on account of unauthorized transfer through hacking,
denial of service on account of technological failure etc. needs to be assessed and banks
providing Mobile payments should consider insuring themselves against such risks, as is the case
with Internet Banking.

6. Bilateral contracts between the payee and payee’s bank, the participating banks and service
provider and the banks themselves will form the legal basis for mobile transactions. The rights
and obligations of each party must be clearly defined and should be valid in a court of law. It is
likely that there will be two sets of contracts; one would be a commercial contract between
service providers and the second, a contract between the customer and the bank, to provide a
particular service/ s. At all time, legal obligations of each party must be made clear through these
contracts.
7. Banks must make mandatory disclosures of risks, responsibilities and liabilities of the
customers in doing business through Mobile phone, through a disclosure template on their
websites and/or through printed material.

8. The existing mechanism for handling customer complaints / grievances may be used for
mobile payment transactions as well. However, the technology is relatively new, banks offering
mobile payment service should set up a help desk and make the details of the help desk and
escalation procedure for lodging the complaints, if any public on their websites. Such details
should also be made available to the customer at the time of sign up.

9. In cases where the customer files a complaint with the bank disputing a transaction, it would
be the responsibility of the service providing bank, to address the customer grievance. Banks
may formulate chargeback procedures for addressing such customer grievances.

10. Banks may also consider covering the risks arising out of fraudulent/disputed transactions
through appropriate insurance schemes.

11. The jurisdiction of legal settlement would be within India.

Mobile banking business models

A wide spectrum of Mobile/branchless banking models is evolving. However, no matter what
business model, if mobile banking is being used to attract low-income populations in often rural
locations, the business model will depend on banking agents, i.e., retail or postal outlets that
process financial transactions on behalf telcos or banks. The banking agent is an important part
of the mobile banking business model since customer care, service quality, and cash
management will depend on them. Many telcos will work through their local airtime resellers.
However, banks in Colombia, Brazil, Peru, and other markets use pharmacies, bakeries, etc.

These models differ primarily on the question that who will establish the relationship (account
opening, deposit taking, lending etc.) to the end customer, the Bank or the Non-
Bank/Telecommunication Company (Telco). Another difference lies in the nature of agency
agreement between bank and the Non-Bank. Models of branchless banking can be classified into
three broad categories - Bank Focused, Bank-Led and Nonbank-Led.

Bank-focused model
The bank-focused model emerges when a traditional bank uses non-traditional low-cost delivery
channels to provide banking services to its existing customers. Examples range from use
of automatic teller machines (ATMs) to internet banking or mobile phone banking to provide
certain limited banking services to banks’ customers. This model is additive in nature and may
be seen as a modest extension of conventional branch-based banking.

Bank-led model
The bank-led model offers a distinct alternative to conventional branch-based banking in that
customer conducts financial transactions at a whole range of retail agents (or through mobile
phone) instead of at bank branches or through bank employees. This model promises the
potential to substantially increase the financial services outreach by using a different delivery
channel (retailers/ mobile phones), a different trade partner (telco / chain store) having
experience and target market distinct from traditional banks, and may be significantly cheaper
than the bank-based alternatives. The bank-led model may be implemented by either using
correspondent arrangements or by creating a JV between Bank and Telco/non-bank. In this
model customer account relationship rests with the bank

Non-bank-led model
The non-bank-led model is where a bank has a limited role in the day-to-day account
management. Typically its role in this model is limited to safe-keeping of funds. Account
management functions are conducted by a non-bank (e.g. telco) who has direct contact with
individual customers.

Mobile Banking Services

Mobile banking can offer services such as the following:
Account Information

1. Mini-statements and checking of account history

2. Alerts on account activity or passing of set thresholds
3. Monitoring of term deposits
4. Access to loan statements
5. Access to card statements
6. Mutual funds / equity statements
7. Insurance policy management
8. Pension plan management
9. Status on cheque, stop payment on cheque
10. Ordering cheque books
11. Balance checking in the account
12. Recent transactions
13. Due date of payment (functionality for stop, change and deleting of payments)
14. PIN provision, Change of PIN and reminder over the Internet
15. Blocking of (lost, stolen) cards
Payments, Deposits, Withdrawals, and Transfers

1. Domestic and international fund transfers

2. Micro-payment handling
3. Mobile recharging
 4. Commercial payment processing
5. Bill payment processing
6. Peer to Peer payments
7. Withdrawal at banking agent
8. Deposit at banking agent
A specific sequence of SMS messages will enable the system to verify if the client has sufficient
funds in his or her wallet and authorize a deposit or withdrawal transaction at the agent. When
depositing money, the merchant receives cash and the system credits the client's bank account or
mobile wallet. In the same way the client can also withdraw money at the merchant: through
exchanging sms to provide authorization, the merchant hands the client cash and debits the
merchant's account.
Investments
1. Portfolio management services
2. Real-time stock quotes
3. Personalized alerts and notifications on security prices
4. mobile banking

Support
1. Status of requests for credit, including mortgage approval, and insurance coverage
2. Check (cheque) book and card requests
3. Exchange of data messages and email, including complaint submission and tracking
4. ATM Location

Content Services
1. General information such as weather updates, news
2. Loyalty-related offers
3. Location-based services

Based on a survey conducted by Forrester, mobile banking will be attractive mainly to the
younger, more "tech-savvy" customer segment. A third of mobile phone users say that they may
consider performing some kind of financial transaction through their mobile phone. But most of
the users are interested in performing basic transactions such as querying for account balance and
making bill payment.

Challenges for a Mobile Banking Solution

Key challenges in developing a sophisticated mobile banking application are :
Handset operability
There are a large number of different mobile phone devices and it is a big challenge for banks to
offer mobile banking solution on any type of device. Some of these devices support Java ME and
others support SIM Application Toolkit, a WAP browser, or only SMS.
Initial interoperability issues however have been localized, with countries like India using portals
like R-World to enable the limitations of low end java based phones, while focus on areas such
as South Africa have defaulted to the USSD as a basis of communication achievable with any
phone.

The desire for interoperability is largely dependent on the banks themselves, where installed
applications (Java based or native) provide better security, are easier to use and allow
development of more complex capabilities similar to those of internet banking while SMS can
provide the basics but becomes difficult to operate with more complex transactions.

There is a myth that there is a challenge of interoperability between mobile banking applications
due to perceived lack of common technology standards for mobile banking. In practice it is too
early in the service lifecycle for interoperability to be addressed within an individual country, as
very few countries have more than one mobile banking service provider. In practice, banking
interfaces are well defined and money movements between banks follow the IS0-8583 standard.
As mobile banking matures, money movements between service providers will naturally adopt
the same standards as in the banking world.

On January 2009, Mobile Marketing Association (MMA) Banking Sub-Committee, chaired by

CellTrust and VeriSign Inc., published the Mobile Banking Overview for financial institutions in
which it discussed the advantages and disadvantages of Mobile Channel Platforms such as Short
Message Services (SMS), Mobile Web, Mobile Client Applications, SMS with Mobile Web and
Secure SMS.

Security
Security of financial transactions, being executed from some remote location and transmission of
financial information over the air, are the most complicated challenges that need to be addressed
jointly by mobile application developers, wireless network service providers and the banks' IT
departments.

The following aspects need to be addressed to offer a secure infrastructure for financial
transaction over wireless network:

1. Physical part of the hand-held device. If the bank is offering smart-card based security,
the physical security of the device is more important.
2. Security of any thick-client application running on the device. In case the device is stolen,
the hacker should require at least an ID/Password to access the application.
3. Authentication of the device with service provider before initiating a transaction. This
would ensure that unauthorized devices are not connected to perform financial
transactions.
4. User ID / Password authentication of bank’s customer.
5. Encryption of the data being transmitted over the air.
6. Encryption of the data that will be stored in device for later / off-line analysis by the
customer.
One-time password (OTPs) is the latest tool used by financial and banking service providers in
the fight against cyber fraud. Instead of relying on traditional memorized passwords, OTPs are
requested by consumers each time they want to perform transactions using the online or mobile
banking interface. When the request is received the password is sent to the consumer’s phone via
SMS. The password is expired once it has been used or once its scheduled life-cycle has expired.
Because of the concerns made explicit above, it is extremely important that SMS
gateway providers can provide a decent quality of service for banks and financial institutions in
regards to SMS services. Therefore, the provision of service level agreements (SLAs) is a
requirement for this industry; it is necessary to give the bank customer delivery guarantees of all
messages, as well as measurements on the speed of delivery, throughput, etc. SLAs give the
service parameters in which a messaging solution is guaranteed to perform.

Scalability & Reliability

Another challenge for the CIOs and CTOs of the banks is to scale-up the mobile banking
infrastructure to handle exponential growth of the customer base. With mobile banking, the
customer may be sitting in any part of the world (true anytime, anywhere banking) and hence
banks need to ensure that the systems are up and running in a true 24 x 7 fashion. As customers
will find mobile banking more and more useful, their expectations from the solution will
increase. Banks unable to meet the performance and reliability expectations may lose customer
confidence. There are systems such as Mobile Transaction Platform which allow quick and
secure mobile enabling of various banking services. Recently in India there has been a
phenomenal growth in the use of Mobile Banking applications, with leading banks adopting
Mobile Transaction Platform and the Central Bank publishing guidelines for mobile banking
operations.

Application distribution
Due to the nature of the connectivity between bank and its customers, it would be impractical to
expect customers to regularly visit banks or connect to a web site for regular upgrade of their
mobile banking application. It will be expected that the mobile application itself check the
upgrades and updates and download necessary patches (so called "Over The Air" updates).
However, there could be many issues to implement this approach such as upgrade /
synchronization of other dependent components.

Personalization
It would be expected from the mobile application to support personalization such as :

1. Preferred Language
2. Date / Time format
3. Amount format
4. Default transactions
5. Standard Beneficiary list
6. Alerts
"Mobile Commerce is any transaction, involving the transfer of ownership or rights to use goods
and services, which is initiated and/or completed by using mobile access to computer-mediated
networks with the help of an electronic device."

DEFINITION
"Mobile Commerce is the use of information technologies and communication technologies
for the purpose of mobile integration of different value chains an business processes, and for
the purpose of management of business relationships.”

MOBILE DEVICES
M-commerce is not just about using mobile phones as end user devices. The following list gives
an overview of different kinds of mobile devices.
• Mobile phone
• PDA (Personal Digital Assistant)
• Smart phone-the smart phone combines mobile phone and PDA technology into one
device.
• Laptop
• Earpiece (as part of a personal area network)

M-COMMERCE VERSUS E-COMMERCE

In comparison to e-commerce, m-commerce offers both advantages and disadvantages. The

following list summarizes the advantages of m-commerce:
¨
Ubiquity: The use of wireless device enables the user to receive information and conduct
transactions anywhere, at anytime.
Accessibility: Mobile device enables the user to be contacted at virtually anytime and place. The
user also has the choice to limit their accessibility to particular persons or times.
¨
Convenience: The portability of the wireless device and its functions from storing data to access
to information or persons.
¨
Localization: The emergence of location-specific based applications will enable the user to
receive relevant information on which to act.
¨
Instant Connectivity (2.5G): Instant connectivity or "always on" is becoming more prevalent
will the emergence of 2.5 G networks, GPRS or EDGE. Users of 2.5 G services will benefit from
easier and faster access to the Internet.
¨
Personalization: The combination of localization and personalization will create a new
channel/business opportunity for reaching and attracting customers. Personalization will take the
form of customized information, meeting the users’ preferences, followed by payment
mechanisms that allow for personal information to be stored, eliminating the need to enter credit
card information for each transaction.

Time Sensitivity – Access to real-time information such as a stock quote that can be acted upon
immediately or a sale at a local boutique.
Security – depending on the specific end user device, the device offers a certain level of inherent
security.

The following list summarizes the disadvantages of m-commerce:

1. Mobile devices offer limited capabilities (such as limited display). Between

mobile devices these capabilities vary so much that end user services will need to
be customized accordingly.
2. The heterogeneity of devices, operating systems and network technologies is a
challenge for a uniform end user platform. For this reason, standardization bodies
consisting of telecommunication companies, device manufacturers and value
added service providers integrate their work.
3. Mobile devices are more prone to theft and destruction.
4. The communication over the air interface between mobile device and network
introduces additional security threats.

AREAS / USES OF M-COMMERCE

In the current commerce industry, mobile commerce or M-Commerce has been entered in
finance, services, retails, tele-communication and information technology services. In these
sectors, M-Commerce is not only being widely accepted but also it is being more used as a
popular way of business/ commerce.

• Finance Sectors
• Telecommunication Sectors
• Service / Retail sectors
• Information Sector

M-COMMERCE APPLICATIONS
The general m-commerce applications are:

1. Mobile ticketing
Tickets can be sent to mobile phones using a variety of technologies. Users are then able to use
their tickets immediately by presenting their phones at the venue. Tickets can be booked
and cancelled on the mobile with the help of simple application downloads or by
accessing WAP portals of various Travel agents or direct service providers. Mobile
ticketing for airports, ballparks, and train stations, for example, will not only streamline
unexpected metropolitan traffic surges, but also help users remotely secure parking spots
(even while in their vehicles) and greatly facilitate mass surveillance at transport hubs.

2. Mobile vouchers, coupons and loyalty cards

Mobile ticketing technology can also be used for the distribution of vouchers, coupons and
loyalty cards. The voucher, coupon, or loyalty card is represented by a virtual token that
is sent to the mobile phone. Presenting a mobile phone with one of these tokens at
 the point of sale allows the customer to receive the same benefits as another customer
who has a loyalty card or other paper coupon/voucher.

Mobile delivery enables:

• economy of scale
• quicker and easier delivery
• effective target marketing
• privacy-friendly data mining on consumer behaviour
• environment-friendly and resources-saving efficacy

3. Content purchase and delivery

Currently, mobile content purchase and delivery mainly consists of the sale of ring-tones,
wallpapers, and games for mobile phones. The convergence of mobile phones, mp3
players and video players into a single device will result in an increase in the purchase
and delivery of full-length music tracks and video. Download speeds, if increased to 4G
levels, will make it possible to buy a movie on a mobile device in a couple of seconds,
while on the go.

4. Location-based services
Unlike a home PC, the location of the mobile phone user is an important piece of information
used during mobile commerce transactions. Knowing the location of the user allows
for location based services such as:
• local maps
• local offers
• local weather
• people tracking and monitoring

5. Information services
A wide variety of information services can be delivered to mobile phone users in much the same
way as it is delivered to PCs. These services include:
• news services
• stock data
• sports results
• financial records
• traffic data and information
Particularly, more customized traffic information, based on users' travel patterns, will be
multicast on a differentiated basis, instead of broadcasting the same news and data to all Users.
This type of multicasting will be suited for more bandwidth-intensive mobile equipment.

6. Mobile Banking
Banks and other financial institutions are exploring the use of mobile commerce to allow their
customers to not only access account information, but also make transactions, e.g.
purchasing stocks, remitting money, via mobile phones and other mobile equipment. This
service is often referred to as Mobile Banking or M-Banking. More negative issues like
ID theft, phishing and pharming are lurking when it comes to mobile banking,
 particularly done on the mobile web. Net security technology free from redundancy and
paradigm shifts away from mobile web-based banking will be an optimal solution to
mobile banking in the near future.

7. Mobile brokerage
Stock market services offered via mobile devices have also become more popular and are known
as Mobile Brokerage. They allow the subscriber to react to market developments in a
timely fashion and irrespective of their physical location.

8. Auctions
Over the past three years Mobile reverse action solutions have grown in popularity. Unlike
traditional auctions, the reverse auction (or low-bid auction) bills the consumer's phone
each time they place a bid. Many mobile PSMS commerce solutions rely on a one-time
purchase or one-time subscription; however, reverse auctions are high return applications
as they allow the consumer to transact over a long period of time.

9. Mobile purchase
Mobile purchase allows customers to shop online at any time in any location. Customers can
browse and order products while using a cheap, secure payment method. Instead of using
paper catalogues, retailers can send customers a list of products that the customer would
be interested in, directly to their mobile device or consumers can visit a mobile version of
a retailer’s ecommerce site. Additionally, retailers will also be able to track customers at
all times and notify them of discounts at local stores that the customer would be
interested in.

10. Mobile marketing and advertising

Mobile marketing is an emerging concept, but the speed with which it's growing its roots is
remarkable. Mobile marketing is highly responsive sort of marketing campaign,
especially from brands’ experience point of view. And almost all brands are getting
higher campaign response rates. Corporations are now using m-commerce to expand
everything from services to marketing and advertisement. Although there are currently
very few regulations on the use and abuses of mobile commerce, this will change in the
next few years. With the increased use of m-commerce comes increased security. Cell
phone companies are now spending more money to protect their customers and their
information from online intrusions and hackers.

PAYMENT METHODS
The main payment methods used to enable mobile commerce are:
• premium-rate calling numbers,
• charging to the mobile telephone user's bill or
• Deducting from their calling credit.
• Registration of a credit card that is linked to a Sim Card.

CATEGORISATION OF M-PAYMENT SYSTEMS

Most e-payment systems are not suitable for use in a mobile context that is, using a mobile
device and communicating over a mobile telecommunication network. This is due to the special
characteristics of mobile devices and mobile telecommunications. In the following, we
categorise m-payment systems according to the whereabouts of the customer’s money:

1. Software electronic coins – electronic money stored on the mobile in file format.
2. Hardware electronic coins – electronic money stored on the mobile device on a smart card.
3. Background account – electronic money stored in a remote account at a trusted third party.

Software Electronic Coins

In this case, monetary value is stored on the mobile device and the customer has full
control of his/her money wherever he/she goes and whatever he/she does. An electronic coin is
represented as a file containing, among other information, a value, a serial number, a validity
period and the signature of the issuing bank. Since software electronic coins are easy to copy,
the validity of an electronic coin depends on its uniqueness in terms of its serial number. The
customer transfers electronic coins to the merchant, who forwards them to the issuing bank for
the “double spending test.”

Hardware Electronic Coins

In this case, monetary value is stored on a secure hardware token, typically a smart card,
in the mobile device. The presentation of electronic money is not important, as long as it is
stored securely on the smart card. Electronic money could be represented as a simple numeric
counter. In order to get to the money, the customer’s smart card and the merchant’s payment
server authenticate each other and a secure channel is set up between them. Then, electronic
money can be transferred from one to the other. This approach is quite attractive because smart
cards provide an additional level of mobility. That means the payment smart card can also be
used in POS transactions. E.g., Geldkarte, Mondex and Barclay card.
Background Account
Here, the money is stored remotely on an account at a trusted third party. Depending on
the specific payment system, the account could be a credit card account, a bank account, or an
account held at the network operator. For example, in some cases this data is sent in the clear
(e.g. a credit card authorisation) not providing any security against eavesdropping and in some
cases this information is encrypted and digitally signed, providing anonymity to the customer
(e.g. SET – Secure Electronic Transactions).

KEY ISSUES OF M-COMMERCE

The success of M-Commerce depends on:
• Evolution: Technology and Business models are constantly evolving which will demand
flexibility and patience on part of all players.
• Customer loyalty: Who will ‘own’ the customer? Partnerships among players from various
industries will be necessary for most, if not all, m-commerce initiatives, and, in turn, will
alter the nature of any one company to own their own customers.
• Cross-sector knowledge gulf, where the different parties will need to learn about the
functions and limitations of the services provided by the other players, for example, operators
will need to know about content and applications.
• Moving up the value chain: To respond to market opportunities some companies have
develop subsidiaries in order to react more rapidly to market challenges. For example, Sonera
has developed Sonera Zed, to provide portal and application management services such as
 location based mobile yellow pages as well Smart Trust, to develop secure solution for m-
commerce transactions. And Citicorp has established e-Citi to develop a wireless access
gateway strategy for financial service providers.

CONCLUSION
As m-commerce applications and wireless devices are evolving rapidly, one will take forward
the other one towards empowering innovation, versatility and power in them. There are a number
of business opportunities and grand challenges of bringing forth viable and robust wireless
technologies ahead for fully realizing the enormous strength of m-commerce in this Internet era
and thereby meeting both the basic requirements and advanced expectations of mobile users and
providers.

There are news articles and pictures displaying people, who are ordering things over the Internet
while waiting for a bus, downloading merchant coupons on their PDAs as they enter a store or
bidding for the last table at a hot restaurant by digital phone in a spur-of-the-moment auction.
Actually this process represents a tip of a very big iceberg. The advent of m-commerce, as
widely referred to among the users, has far-reaching implications. But there are many limitations
in the technologies that Once its relevant technologies get matured, widely available and
competent, the host of portable devices will be ready to handle the bigger transactional activities
not envisioned so far successfully apart from these minor activities. One of the main feature
challenges will be to unify payment solutions, providing the highest possible level of security.
Mobile banking in the world
Mobile banking is used in many parts of the world with little or no infrastructure, especially
remote and rural areas. This aspect of mobile commerce is also popular in countries where most
of their population is unbanked. In most of these places, banks can only be found in big cities,
and customers have to travel hundreds of miles to the nearest bank.

In Iran, banks such as Parsian, Tejarat, Mellat, Saderat, Sepah, Edbi, and Bankmelli offer the
service. Banco Industrial provides the service in Guatemala. Citizens of Mexico can access
mobile banking with Omnilife, Bancomer and MPower Venture. Kenya's Safaricom (part of
the Vodafone Group) has the M-Pesa Service, which is mainly used to transfer limited amounts
of money, but increasingly used to pay utility bills as well. In 2009, Zain launched their own
mobile money transfer business, known as ZAP, in Kenya and other African countries.
Telenor Pakistan has also launched a mobile banking solution, in coordination with Taameer
Bank, under the label Easy Paisa, which was begun in Q4 2009. Eko India Financial Services,
the business correspondent of State Bank of India (SBI) and ICICI Bank, provides bank
accounts, deposit, withdrawal and remittance services, micro-insurance, and micro-
finance facilities to its customers (nearly 80% of whom are migrants or the unbanked section of
the population) through mobile banking.

In March 2011, Bangladesh had its own mobile banking services when Dutch Bangla Bank
launched "Dutch Bangla Bank Mobile Banking" in collaboration with telecoms Banglalink and
Citycell. This bank-led model is similar to India and services provided are directly provided by
Dutch-Bangla Bank.
4: Tangible Goods
So what are people actually buying with their phones? According to a survey by the Mobile
Marketing Association, 17% of mobile commerce was used for purchasing applications and
ringtones, while another 6% of people used their phones for discounts and coupons, and another
6% used their phones to buy tangible goods — that is, actual goods that you can put in your
hands.
eBay has been the standout leader in mobile commerce with their iPhone app that
launched in 2008, and their Blackberry and Android applications that launched in 2009 and
2010. In 2009, the company saw more than $600 million dollars in goods sold via the mobile
app, which was a 200% increase from 2008. The launch of their app notified bidders with push
alerts and SMS notifications when they had been outbid, and allowed them to cast another
attempt or keep track of ending auctions. According to eBay, one item is purchased every two
seconds using eBay mobile app, with apparel, auto parts, cell phones/accessories, sporting goods
and collectibles ranking as the top five categories of purchased items

5: Marketing
Mobile commerce is growing and it is directly related to the amount of mobile marketing that
companies are investing in. A reported 74% of online retailers either have in place or are
developing mobile commerce strategies, while 20% have already implemented their complete
plans, according to a study by the National Retail Federation.

Text message marketing, where customers

opt-in to receive news about deals or offer coupons,
has been a widely adopted practice as it’s a direct
way to engage with consumers that has a high
likelihood of being read. Retailers are also investing
more time and money into creative ways to reach
consumers via their mobile phones with campaigns
that enhance the brand identity or the shopping
experience.

EBay’s recent launch of their Fashion App is

a great example. The app allows users to browse for
clothes, have access to exclusive sales, and “try on”
an outfit by snapping a picture with the iPhone’s
camera. It then let’s you share your outfits with
friends on Face book and Twitter. All of the features really add to the shopping experience, but
most importantly, consumers are able to buy and bid on what they like.

Mobile Commerce Trends – a whole new and exciting marketing technology

Mobile commerce trends & Mobile marketing was born on a warm night of August 2000.
 Mobile commerce trends & Mobile marketing was born on
a warm night of August 2000. Thousands of music lovers
were winding their way through the massive gates at the
Virgins V-2000 music festival. Each participant had an
event programmed in hand, and thousands eyed the double
page ad spread at its center – the call to action prompts
them to fire off an SMS containing the word “wasssupp”
to a prescribed number. A minute later, a few individuals were jumping in the air - winners of
several thousand pounds in UK’s first SMS competition run by Budweiser. A couple of days
later, the same participants received a well written SMS message from Budweiser to forward to
people in the mobile phone address book for a chance to win a few thousand pounds. By the
weekend, thousands of mobile phones were beeping to signal delivery of one of the most famous
mobile e-commerce advertising hooks of this century. Mobile marketing was born and the cheers
that went up in the offices of Budweiser and their marketing associates were absolutely
unprecedented.

Let’s forward the time clock to 2006. When Audi was ready to launch the TT Quattro Sports
model car, they wanted to do it in an exceptionally unique way. The car was being targeted to
high-net-worth individuals so they started off with researching the life styles of their target
audience. During their research, they found that almost all of these rich customers carried the
latest sophisticated mobile phone. Audi marketing associates came up with high impact visuals
of the sports car and packaged it into a sleek downloadable multi-media show meant for mobile
phone marketing. SMS invitations were sent out to these high-net-worth consumers to see the
new model on their mobile phones. The responding consumers were treated to a rich multimedia
experience that allowed them to zoom-in and pan around high impact visuals of the sports car
before calling to book a test drive. This was the first known instance where 2G mobile phone
technology was used for mobile marketing.

Mobile phone technology and e-commerce trends marketing industry was finally beginning to
deliver on its promise to the advertisers. The quantum leap in technologies enabled the launch of
2G, 2.5G and more recently, 3G technology mobiles and networks. Simultaneously, the entry of
cheap Chinese made smart mobile phones accelerated the penetration of mobile phones i.e. more
and more people are now not only carrying mobile phones, they are carrying smart 3G enabled
mobile phone. Add to this potent mix, broadband mobile internet. Traditional media owners
including MSN, EMAP, Channel4 and ITV are now deploying mobile-centric content to
capitalize on the public’s appetite for mobile content. People are now reading news summaries
delivered direct to their mobile phones. They receive the latest stock positions and answer urgent
email while on the move; they check their bank accounts, transfer funds and even make
purchases using their mobile phones. And as history has demonstrated on more than one
occasion, whenever we witness a concentration of media and consumers, social media solutions
soon follows.

How is mobile phone technology connected with ecommerce internet marketing and consulting
services of your website?

3G or third generation technology has advantages including high-speed transmission, advanced

multimedia access and global roaming. 3G is mostly used with mobile phones as a means to
connect the phone to the Internet or other IP networks in order to make voice and video calls, to
download and upload data and to surf the net. The higher data speed enables us to send multi-
media content from the website direct to the customer’s mobile phone. Imagine your animated
ads and video advertisements being sent direct to your customer’s mobile phones. The reason
this technology is so exciting is because it is now possible to use sophisticated software
embedded in your website to target customers based on their lifestyles.

Simultaneously, sophisticated mobile phone wallets or payment gateways have already been
developed. Customers can now not only view multi-media rich content, they can make purchases
even when they are on the move or waiting at the airport or train terminal.

While search engine optimization richmond va via search engines will still exist and grow,
marketing via mobile phones opens up a whole new vista of marketing possibilities. We at
RetailBizMD.com have been carefully following the developments in mobile marketing and
have developed custom website-to-mobile interface linked to the ecommerce database on the
website. So for example, if a customer at an online book store has requested to be notified when
a certain book or game or DVD is available, the moment the stock is added, automated mobile
messages are sent out with hypertext links leading direct to the product page. Clearly, new
technology presents a whole new and exciting way to market your products and services. Talk to
RetailBizMD.com today – we are eager to help you take your business direct to your customers.

When you've grown up in the brick and mortar world, isn't the idea of taking your business
online a little scary? We know you have been thinking about it, but so much uncertainty about
what to do. New concepts like entailing, ecommerce store solution, shopping cart software, e-
mail marketing, corporate internet marketing, YouTube and on and on!

7.2: Importance of M-commerce in the present world of business

What is m-Commerce and why we need it? This question is

quite simple but the answer may differ for business to
business prospects. M-Commerce is latest trend, marketers
and advertisers looking to have a mobile website for more
promotion and internet marketing channels. A good example
of where m-commerce is going are iPhone, Nokia N-Series,
Samsung Devices and Google’s T-Mobile G1 with Andriod
OS, etc..

What is M-Commerce?

M-Commerce is a term used for transaction conducted by mobile phones, personal digital
assistants (PDAs) for promotional and financial activities using wireless internet connectivity.
Mobile Commerce is referred as M-Commerce, which brings the new possibility for small
business to sell and promote their product and business. M-Commerce is growing rapidly and
providing new options for Business Website Promotions via Mobile Devices.
Ten facts for having an M-Commerce Site.

1. Mobile Usages Increased: Nowadays, a mobile usage has increased rapidly due to the
evolution of internet and mobile technologies. This change has provided seamless
opportunities for business prospect.
2. Reach your Customers: Having a Mobile Commerce site means that, you can reach
customers even when they are shopping offline. It makes the shopper more aware about
your services and products.
3. Compete with Competitors: Don’t gets your competitors ride on you, as if they have
Mobile site and you don’t you just give then an opportunity to head start there mobile
promotion.
4. Appeal to an affluent audience: As a recent survey on mobile internet adoption says
that, 42% of mobile internet users earn over £40,000 a year, and spend more on their
mobile bills.
5. Low Development Cost: A Mobile Website takes very low development cost.
6. New Sales Channels: By having a mobile site, you just opened a new sales channel for
you. The more channels you have the more possibility to increase you’re branding and
marketing possibilities.
7. Get Shoppers to Local Channels: By having a mobile site for multichannel channel
retailers can drive more local traffic and offline business via contact dealer, nearest store
locators, etc.
8. Shoppers like Comparisons: Often customers like see detailed information and price
comparison, Reviews and all. Services like Reevoo & Scoope offering such services.
Optimized your website for such services and handheld device increase you chances in
Mobile Marketing.
9. Smart-Phones are Latest Fashion: Technology has changed the way people use their
mobile devices. Mostly, people like to do shopping, communicating with their Mobile
Devices. Make sure by having an M-Commerce website, you make your mark within
shoppers.
10. M-Commerce is essential part of Business: M-Commerce is now turning to be an
essential part of your Internet marketing strategies. As Internet goes to mobile devices
and M-Commerce can easily fit in your Business process, you can make huge benefits
from it.

Why Mobile Commerce World?

Asian consumers are increasingly using their mobiles for
financial transactions, and users are expected to spend $1.6
billion via mobile commerce this year (ABI Research). This
growth is primarily being driven by SMS, mobile Internet, and
mobile application forms of payment. The demand for mobile
money services or mobile banking is also increasing globally.
This one day dedicated mobile commerce summit will bring
together merchants, banks, and mobile operators to explore and understand where the
opportunities lie in m-commerce as well as set the foundation for partnerships to profit for the
years to come.
3rd Mobile Commerce Summit Asia 2010

The changing landscape of consumer lifestyle is one of the biggest factor in the evolution mobile
commerce in the world. The fast pacing transition of payment services and systems, which are
often viewed to be the “umbilical cord” of the whole financial services ecosystem that links all
stakeholders; Telco, banks, retailers, technology/solution providers and consumer together.
Across the world, consumers are showing remarkable willingness to embrace this kind of
lifestyle – Being able to make transactions electronically. And one of the best things that you can
ever realize is how to make the lives of your consumers at most convenience by letting them do
payments, remittances and other banking and financial services through their mobile phones.
Asia has been a hotbed in the progressive development of Mobile Commerce. It has definitely
showed tremendous growth over years and has proven consistent track records of making this
technology successful.

In 2010, Neoedge is proud to announce that 3rd Mobile Commerce Summit Asia will be
happening in the premier spot of Mobile Commerce in the World – Manila Philippines. This
event will feature highly relevant case studies and presentations from world renowned Mobile
Commerce experts who will bring in their up to date insights and vision on how Mobile
Commerce is evolving.

4th Mobile Commerce Summit ASIA 2011 – Kuala Lumpur, Malaysia

The mobile commerce market in Asia has been growing

extremely fast in the past few years and everyone has no doubt
it will even accelerate in the year of 2011. Pioneer stakeholders
including from regulators, retailers, telecom
operators, banks, payment processors, technology
providers and hardware vendors have been exploring and
proving various business models and partnership. New players continue to enter this market in
drove trying to capture a slice of the big pie.

While the prospects are bright, the road has showed us a lot of twists and turns. Where do the
real business opportunities lie? What are the proven project experience and lessons that we can
learn from? How to make mobile commerce really benefit the mass? How to build, manage
mobile money service network efficiently? How can operators achieve profitability while
enhance customer experience through mobile commerce? What are
the ignored values of mobile commerce for banks? How can
operators and banks work together with regulators to achieve win-
win situation? How can merchants benefit more from mobile
commerce? How to increase usage of mobile commerce by
partnering with trusted financial institutions? What innovative
roles can technology and solution providers play at the new stage
of mobile commerce? How can regulators manage risk and
security properly?
Responding to all these key impressing challenges, The 4th Mobile Commerce Summit
Asia aims to create a most comprehensive and effective platform for all the stakeholders to
share, discuss, explore, learn and take the first mover advantage.

The next cutting-edge summit on Mobile Commerce which is taking place on 15-16 March in
Kuala Lumpur, Malaysia: '4th Mobile Commerce Summit ASIA 2011' will converge the leaders
and new players in the telecommunications industry will launch exciting business cases and
reveal the most innovative and successful implementations in the mobile commerce space.

The upcoming summit is joined by GSMA’s Director, Chris Dadd and endorsed by Mobile
Monday Singapore, Mobile Alliance, GlobalPlatform and NFC Forum whose members are given
the opportunity to participate at a reduced rate.

4th Mobile Commerce Summit ASIA has been successfully running for the last three years and
the culture of learning and networking experience has grown since. The core sponsors for the
upcoming 2011 summit are the industry’s leading cross-platform developer and mobile
transaction platforms provider. They are the Netbiscuits and Telepin Software respectively.

These award-winning sponsors recognised by Deloitte Consulting as one of the fastest growing
firms in 2010 will grace the event. Telepin Software’s CEO, Vincent Kadar will discuss on the
different Mobile Money success stories around the world reiterating the best practices in the
delivery of Mobile Money platforms. While Joerg Krahnert, Managing Director for Netbiscuits’
Asia Pacific subsidiary, on another speaking slot, will tackle on the key success factors for
mobile commerce and determine how global brands utilise it.

Hong Kong’s cloud services group Megaworld will also be joining the biggest Asia Pacific
mobile commerce event. Megapay Limited will be represented by its Technical Director for
Mobile Payments Division, Emmanuel Gadaix. He will present on the deployment of Mobile
Payment services, its challenges and opportunities. He will reveal 'the good, the bad and the ugly'
on working with mobile carriers. Overall, on his presentation, this mobile payment guru will lay
down the future of mobile payments.

In the recent years, mobile commerce or mcommerce have seen an explosion in the
telecommunications industry. Last year, Neoedge’s 3rd Mobile Commerce Summit ASIA held in
Manila was a huge success. It gathered a great mix of speakers, panelists and participants from
the operators, banks, developers and other technology providers. Every player in the value chain
was represented and that the overall impact to the company’s present was overwhelming. Now,
the growing concern and interest for mobile commerce is unstoppable. Big players such as Apple
are joining the mobile commerce band wagon and therefore seeing the huge potential growth and
developments.

A GSMA led Post-Conference workshop on mCommerce and mCRM will happen on the 17th
March, entitled: 'Working up the pyramid and creating exciting marketplaces'. It will revolve on
different ecosystems like Mobile Money, Pay Buy Mobile, OneAPI, Mobile Media Metrics,
AntiSpam, and the Mobile Advertising Marketplace. The final part of the workshop is the very
exciting twist of how to go forward with these ecosystems mentioned earlier.

As the stakeholders in the industry progress and the new ones are trying to own their customers,
the right understanding and implementation is as critical as the change in the rapidity of the
competition in the coming 2011.

Mobile Commerce 2011 Sky’s the limit for mcommerce

The mobile commerce opportunities for retailers are several.

• First, mobile expands the number of channels for retailers. Contrary to what the Internet
did to other channels such as the catalog, mobile will have an incremental effect on
overall retail sales, and not cannibalize ecommerce.
• Second, mobile adds legs to other channels. Expect mobile tactics such as SMS
marketing to drive traffic to stores with incentives such as coupons, alerts, discounts,
new-merchandise updates and store openings.
• Third, mobile adds a social element to the shopping experience. Happy shoppers will
tweet, Facebook Like or post positive comments on feedback pages if the retail
experience on mobile or in-store was satisfactory and more.
• Fourth, mobile allows for price and product comparison on the spot. While this is a
double-edged sword – after all, Amazon is poised to become the de facto mobile
comparison shopping engine for mobile commerce – it also offers a new layer of
transparency to the shopping process.
• Fifth, mobile is an excellent marketing channel for retailers. Its potential to add to the
overall customer loyalty program is mouth-watering. If there is one area that retailers are
neglecting it is this: they are not moving fast enough to capture opt-in mobile numbers to
market to consumers.
A CRM program without a mobile component is an incomplete program. It is a must to
communicate with customers in the channel they are most comfortable with, and that today is
mobile – via SMS and email.

7.3: SUMMARY

Keeping pace with technological advancements and customer needs, the Reserve Bank of India
issued guidelines for mobile banking transactions in October 2008. These guidelines permit
banks to provide mobile banking transactions and to mandate that all transactions have to
originate from one bank account and terminate into another bank account. RBI has provided
approval to 32 banks to provide mobile banking services in India. However, till now, 21 banks
have started this service and the transaction volume is lower than the expected volume.
Mobile banking transactions have been low because of the following reasons, which have been
pointed out by these banks.

Implementation of mCommerce is costly because of the end-to-end encryption that is
needed. Banks feel that low ticket transactions do not need end-to-end encryption.

Currently, the transaction limit of Rs 5000 needs to be revised upwards to Rs 10,000. Banks
feel that this limit does not support transactions like purchase of airline tickets.
These issues are still being examined by the RBI.
Private banks like ICICI and Standard Chartered, HDFC, Kotak Mahindra also provide mobile
banking facilities to their customers. ICICI bank currently has 8 million registered customers for
mobile banking, whereas Kotak Mahindra has 52,000 users.

7.4: GLOSSARY

M-commerce (mobile commerce) is the buying and selling

of goods and services through wireless handheld devices
such as cellular telephone and personal digital assistants
(PDAs). Known as next-generation e-commerce, m-
commerce enables users to access the Internet without
needing to find a place to plug in. The emerging
technology behind m-commerce, which is based on the
Wireless Application Protocol (WAP), has made far
greater strides in Europe, where mobile devices equipped
with Web-ready micro-browsers are much more common
than in the United States.

Mobile Commerce is about the purchase and sale of goods and services through the cellphone
with the involvement of a financial institution.
Mobile Commerce includes the following:

a) Travel and Ticketing

b) Movie Ticketing
c) Bill payments to utility and service companies
d) Merchant & Retail Transactions
e) Money Transfer

Growth of Mobile Commerce in India - Mobile Commerce services are evolving rapidly in
India due to the coming together of mobile service providers, banks and payment service
providers to offer more products and secure transactions through mobile networks.
While eCommerce is limited to PC users only, Mobile Commerce is open to almost everyone
with a cellphone and mobile connection. Mobile Commerce is expected to grow because the
mobile usage and ownership penetration is more than 4 to 5 times than a PC and growing at a
very fast rate.
With mobile commerce offerings expanding, customers in India have the hand-held convenience
of using their mobile phones for making payments for taxi fares and recharging prepaid phone
cards.

Emerging Services of Mobile Commerce in India

1. Increased mobile penetration and use of GPRS on handsets has resulted in the digital
downloads market to cross Rs.2.55 Billion by end of March 2008.
2. Monetary transfers or transactions through mobile phones are found to be much cheaper than
traditional bank transfers as the transaction costs are much lower in the former.
3. Innovative solutions for daily use such as payment of auto or taxi fares
4. Inter-bank transfers services are also on the anvil. ICICI Bank Ltd, India’s largest private
bank, has already started offering all its services through mobile phones (called mobile
banking) since January 2008. Standard Chartered bank has launched a service that enables
money transfer from any ATM to any mobile phone across the country. The recipient
receives a pin number on his or her mobile phone and the sender has to convey the order
number to the recipient. Using these two the recipient can withdraw money from the bank’s
ATM’s.
5. Feasibility studies are being conducted to offer mobile commerce to microfinance firms to
enable them collect payments from remote areas.

Challenges faced by Mobile Commerce in India

1. Security of transactions through Mobile Commerce: The biggest challenge to Mobile

Commerce is the security of payment through mobiles. Mobile Commerce Services like the
mobile wallet which helps make payments at retail outlets through text messages have been
hindered by the guidelines issued by the Reserve Bank of India due to security concerns.
Mobile Payment Service Providers like Obopay Inc and mChek India Payment Systems Pvt. Ltd
are planning on services that would work within the RBI prescribed guidelines like bank
account-linked services and mobile debit cards.
2. The other challenges faced by Mobile Commerce are – the speed of GPRS and user interfaces.

Overview of Ecommerce in India

Highly concentrated urban areas with very high literacy rates, a vast rural population with fast
increasing literacy rate, a rapidly growing internet user base, technology advancement and
adoption and such other factors make India a dream destination for eCommerce players.
India’s eCommerce industry is on the growth curve and experiencing a spurt in growth. The
Online Travel Industry is the biggest segment in eCommerce and is booming due largely to the
Internet-savvy urban population. The other segments, categorized under online non-travel
industry, include e-Tailing (online retail), online classifieds and Digital Downloads (still in a
nascent stage). The online travel industry has some private players such as Makemytrip,
Cleartrip and Yatra as well as a strong government presence in terms of IRCTC, which is a
successful Indian Railways initiative. The online classifieds segment is broadly divided into
three sectors; Jobs, Matrimonial and Real Estate. Mobile Commerce is also growing rapidly and
proving to be a stable and secure supplement to eCommerce due to the record growth in mobile
user base in India, in recent years. Growth drivers and barriers are present in equal measures for
new eCommerce ventures.

7.4: Check Your Progress

1: What is M-Commerce?
2: What are the five mobile commerce trends in year 2010?
3: What are the ten facts for having an M-Commerce Site?
7.5: REFERENCE

1. Tiwari, R.; Buse, S. (2007). The Mobile Commerce Prospects: A strategic analysis of
opportunities in the banking sector (PDF). Hamburg: Hamburg University Press. p. 33.
2. "From electronic to mobile commerce: opportunites through technology convergence for
business services" (PDF). Asia Pacific Tech Monitor (New Delhi (India) 23
3. "Effective Optimization of Web Sites for Mobile Access: the transition from eCommerce
to mCommerce".
4. M Commerce World Submit
5. Tiwari, Rajnish and Buse, Stephan(2007): The Mobile Commerce Prospects: A Strategic
Analysis of Opportunities in the Banking Sector, Hamburg University Press (E-Book as
PDF to be downloaded)
6. Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2007): Mobile Services in
Banking Sector: The Role of Innovative Business Solutions in Generating Competitive
Advantage, in: Proceedings of the International Research Conference on Quality,
Innovation and Knowledge Management, New Delhi, pp. 886–894.
7. Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Customer on the Move:
Strategic Implications of Mobile Banking for Banks and Financial Enterprises, in:
CEC/EEE 2006, Proceedings of The 8th IEEE International Conference on E-Commerce
Technology and The 3rd IEEE International Conference on Enterprise Computing, E-
Commerce, and E-Services (CEC/EEE'06), San Francisco, pp. 522–529.
8. Tiwari, Rajnish; Buse, Stephan and Herstatt, Cornelius (2006): Mobile Banking as
Business Strategy: Impact of Mobile Technologies on Customer Behaviour and its
Implications for Banks, in: Technology Management for the Global Future - Proceedings
of PICMET '06.
9. Owens, John and Anna Bantug-Herrera (2006): Catching the Technology Wave: Mobile
Phone Banking and Text-A-Payment in the Philippines

7.6: ANSWER TO CHECK YOUR PROGRESS

1: Read 7.1.
2: Read 7.1
3: Read 7.2
 Unit 8:

Contents

8.1: Key multimedia concepts,

8.2: Digital Video and electronic Commerce,
8.3: Desktop video processing & Desktop video
conferencing
8.4: Summary
8.5: Glossary
8.6: Check Your Progress
8.7: Reference
8.8: Answer to Check Your Progress

8.1: Key multimedia concepts

Multimedia is media and content that uses a combination of

different content forms. The term can be used as a noun (a
medium with multiple content forms) or as an adjective
describing a medium as having multiple content forms. The
term is used in contrast to media which only use traditional
forms of printed or hand-produced material. Multimedia
includes a combination of text, audio, still
images, animation, video, and interactivity content forms.

Multimedia is usually recorded and played, displayed or accessed by information

content processing devices, such as computerized and electronic devices, but can also be part of
a live performance. Multimedia (as an adjective) also describes electronic media devices used to
store and experience multimedia content. Multimedia is distinguished from mixed media in fine
art; by including audio, for example, it has a broader scope. The term "rich media" is
synonymous for interactive multimedia. Hypermedia can be considered one particular
multimedia application.

The General Concept of Multimedia

As the name suggests, multimedia is a set of more than one media element used to produce a
concrete and more structured way of communication. In other words multimedia is simultaneous
use of data from different sources. These sources in multimedia are known as media elements.
With growing and very fast changing information technology, Multimedia has become a crucial
part of computer world. Its importance has realized in almost all walks of life, may it be
education, cinema, advertising, fashion and what not.
Throughout the 1960s, 1970s and 1980s, computers have been restricted to dealing with two
main types of data - words and numbers. But the cutting edge of information technology
introduced faster system capable of handling graphics, audio, animation and video. And the
entire world was taken aback by the power of multimedia.

1: OBJECTIVES

After going through this lesson you should be able to

• explain what is multimedia

• understand the importance of individual media elements
• identify different hardware components required to run a multimedia
• appreciate the impact of audio in educational presentation
• describe how visual images, graphics and audio can be added to a presentation
• enhance the capability of multimedia through interactive video impact

2: WHAT IS MULTIMEDIA?

Multimedia is nothing but the processing and presentation of information in a more structured
and understandable manner using more than one media such as text, graphics, animation, audio
and video. Thus multimedia products can be an academic presentation, game or corporate
presentation, information kiosk, fashion-designing etc. Multimedia systems are those computer
platforms and software tools that support the interactive uses of text, graphics, animation, audio,
or motion video. In other words, a computer capable of handling text, graphics, audio, animation
and video is called multimedia computer. If the sequence and timing of these media elements can
be controlled by the user, then one can name it as Interactive Multimedia.

3: DIFFERENT MEDIA ELEMENTS

(i) Text

Inclusion of textual information in multimedia is the basic step towards development of

multimedia software. Text can be of any type, may be a word, a single line, or a paragraph. The
textual data for multimedia can be developed using any text editor. However to give special
effects, one needs graphics software which supports this kind of job. Even one can use any of the
most popular word processing software to create textual data for inclusion in multimedia. The
text can have different type, size, color and style to suit the professional requirement of the
multimedia software.

(ii) Graphics

Another interesting element in multimedia is graphics. As a matter of fact, taking into

consideration the human nature, a subject is more explained with some sort of pictorial/graphical
representation, rather than as a large chunk of text. This also helps to develop a clean multimedia
screen, whereas use of large amount of text in a screen makes it dull in presentation.
Unlike text, which uses a universal ASCII format, graphics does not have a single agreed format.
They have different format to suit different requirement. Most commonly used format for
graphics is .BMP or bitmap pictures. The size of a graphics depends on the resolution it is using.
A computer image uses pixel or dots on the screen to form itself. And these dots or pixel, when
combined with number of colors and other aspects are called resolution. Resolution of an image
or graphics is basically the pixel density and number of colors it uses. And the size of the image
depends on its resolution. A standard VGA (Virtual Graphics Arrays) screen can display a screen
resolution of 640 ´ 480 = 307200 pixel. And a Super VGA screen can display up-to 1024 ´ 768 =
786432 pixel on the screen. While developing multimedia graphics one should always keep in
mind the image resolution and number of colors to be used, as this has a direct relation with the
image size. If the image size is bigger, it takes more time to load and also requires higher
memory for processing and larger disk-space for storage.
However, different graphics formats are available which take less space and are faster to load
into the memory.
There are several graphics packages available to develop excellent images and also to compress
them so that they take lesser disk-space but use higher resolution and more colours. Packages
like Adobe PhotoShop, Adobe Illustrator, PaintShop Pro etc. are excellent graphics packages.
There are Graphics galleries available in CD’s (Compact Disk) with readymade images to suit
almost every requirement. These images can directly be incorporated into multimedia
development.

(iii) Animation
Moving images have an overpowering effect on the human peripheral vision. Followings are few
points for its popularity.

Showing continuity in transitions:

Animation is a set of static state, related to each other with transition. When something has two
or more states, then changes between states will be much easier for users to understand if the
transitions are animated instead of being instantaneous. An animated transition allows the user to
track the mapping between different subparts through the perceptual system instead of having to
involve the cognitive system to deduce the mappings.

Indicating dimensionality in transitions:

Sometimes opposite animated transitions can be used to indicate movement back and forth along
some navigational dimension. One example used in several user interfaces is the use of zooming
to indicate that a new object is "grown" from a previous one (e.g., a detailed view or property list
opened by clicking on an icon) or that an object is closed or minimized to a smaller
representation. Zooming out from the small object to the enlargement is a navigational
dimension and zooming in again as the enlargement is closed down is the opposite direction
along that dimension.

Illustrating change over time

Since animation is a time-varying display, it provides a one-to-one mapping to phenomena that
change over time. For example, deforestation of the rain forest can be illustrated by showing a
map with an animation of the covered area changing over time.
Multiplexing the display
Animation can be used to show multiple information objects in the same space. A typical
example is client-side imagemaps with explanations that pop up as the user moves the cursor
over the various hypertext anchors.

Enriching graphical representations

Some types of information are easier to visualize with movement than with still pictures.
Consider, for example, how to visualize the tool used to remove pixels in a graphics application.

Visualizing three-dimensional structures

As you know the computer screen is two-dimensional. Hence users can never get a full
understanding of a three-dimensional structure by a single illustration, no matter how well
designed. Animation can be used to emphasize the three-dimensional nature of objects and make
it easier for users to visualize their spatial structure. The animation need not necessarily spin the
object in a full circle - just slowly turning it back and forth a little will often be sufficient. The
movement should be slow to allow the user to focus on the structure of the object.

You can also move three-dimensional objects, but often it is better if you determine in advance
how best to animate a movement that provides optimal understanding of the object. This pre-
determined animation can then be activated by simply placing the cursor over the object. On the
other hand, user-controlled movements requires the user to understand how to manipulate the
object (which is inherently difficult with a two-dimensional control device like the mouse used
with most computers - to be honest, 3D is never going to make it big time in user interfaces until
we get a true 3D control device).

Attracting attention
Finally, there are a few cases where the ability of animation to dominate the user’s visual
awareness can be turned to an advantage in the interface. If the goal is to draw the user’s
attention to a single element out of several or to alert the user to updated information then an
animated headline will do the trick. Animated text should be drawn by a one-time animation
(e.g., text sliding in from the right, growing from the first character, or smoothly becoming
larger) and never by a continuous animation since moving text is more difficult to read than
static text. The user should be drawn to the new text by the initial animation and then left in
peace to read the text without further distraction.

One of the excellent software available to create animation is Animator Pro. This provides tools
to create impressive animation for multimedia development.

Video
Beside animation there is one more media element, which is known as video. With latest
technology it is possible to include video impact on clips of any type into any multimedia
creation, be it corporate presentation, fashion design, entertainment games, etc.

The video clips may contain some dialogues or sound effects and moving pictures. These video
clips can be combined with the audio, text and graphics for multimedia presentation.
Incorporation of video in a multimedia package is more important and complicated than other
media elements. One can procure video clips from various sources such as existing video films
or even can go for an outdoor video shooting.

All the video available are in analog format. To make it usable by computer, the video clips are
needed to be converted into computer understandable format, i.e., digital format. Both
combinations of software and hardware make it possible to convert the analog video clips into
digital format. This alone does not help, as the digitised video clips take lots of hard disk space to
store, depending on the frame rate used for digitisation. The computer reads a particular video
clip as a series of still pictures called frames. Thus video clip is made of a series of separate
frames where each frame is slightly different from the previous one. The computer reads each
frame as a bitmap image. Generally there are 15 to 25 frames per second so that the movement is
smooth. If we take less frames than this, the movement of the images will not be smooth.

To cut down the space there are several modern technologies in windows environment.
Essentially these technologies compress the video image so that lesser space is required.
However, latest video compression software makes it possible to compress the digitised video
clips to its maximum. In the process, it takes lesser storage space. One more advantage of using
digital video is, the quality of video will not deteriorate from copy to copy as the digital video
signal is made up of digital code and not electrical signal. Caution should be taken while
digitizing the video from analog source to avoid frame droppings and distortion. A good quality
video source should be used for digitization.

Currently, video is good for:

• promoting television shows, films, or other non-computer media that traditionally have
used trailers in their advertising.
• giving users an impression of a speaker’s personality.
• showing things that move. For example a clip from a motion picture. Product demos of
physical products are also well suited for video.

Audio
Audio has a greater role to play in multimedia development. It gives life to the static state of
multimedia. Incorporation of audio is one of the most important features of multimedia, which
enhance the multimedia usability to its full potential. There are several types of sound, which can
be used in multimedia. They are human voices, instrumental notes, natural sound and many
more. All these can be used in any combination as long as they give some meaning to their
inclusion in multimedia.

• There are many ways in which these sounds can be incorporated into the computer. For
example;
• Using microphone, human voice can directly be recorded in a computer.
• Pre-recorded cassettes can be used to record the sound into computer.
• Instrumental sound can also be played directly from a musical instrument for recording
into the computer.
The sound transmitted from these sources is of analog nature. To enable the computer to process
this sound, they need to be digitized.

As all of us know that sound is a repeated pattern of pressure in the air and a microphone
converts a sound wave into an electrical wave. The clarity of sound, the final output depends
entirely on the shape and frequency of the sound wave. When digitised (recording into
computer), the error in sound can be drastically reduced. Audio need to be converted into digital
format to produce digitised audio in order to use them in multimedia. And these digitised sounds
again can be re-converted into analog form so that the user can hear them though the speakers.

Musical Instrument Digitisation Interface or MIDI provides a protocol or a set of rules, using
which the details of a musical note from an instrument is communicated to the computer. But
MIDI data is not digitized sound. It is directly recorded into the computer from musical
instruments, whereas digitised audio is created from the analog sound. The quality of MIDI data
depends upon the quality of musical instrument and the sound system. A MIDI file is basically a
list command to produce the sound. For example, pressing of a guitar key can be represented as a
computer command. When the MIDI device processes this command, the result will be the sound
from the guitar. MIDI files occupy lesser space as compared to the digitised audio and they are
editable also.

The main benefit of audio is that it provides an exclusive channel that is separate from that of the
display. Speech can be used to offer commentary or help without obscuring information on the
screen. Audio can also be used to provide a sense of place or mood. Mood-setting audio should
employ very quiet background sounds in order not to compete with the main information for the
user’s attention. Music is probably the most obvious use of sound. Whenever you need to inform
the user about a certain work of music, it makes much more sense to simply play it than to show
the notes or to try to describe it in words.

4 MULTIMEDIA HARDWARE REQUIREMENTS

For producing multimedia you need hardware, software and creativity. In this section we will
discuss the multimedia equipment required in a personal computer (PC) so that multimedia can
be produced.

(a) Central Processing Unit

As you know, Central Processing Unit (CPU) is an essential part in any computer. It is
considered as the brain of computer, where processing and synchronization of all activities takes
place. The efficiency of a computer is judged by the speed of the CPU in processing of data. For
a multimedia computer a Pentium processor is preferred because of higher efficiency. However,
the CPU of multimedia computer should be at least 486 withmath coprocessor. The Pentium
processor is one step up the evolutionary chain from the 486 series processor and Pentium Pro is
one step above the Pentium. And the speed of the processor is measured in megahertz. It defines
the number of commands the computer can perform in a second. The faster the speed, the faster
the CPU and the faster the computer will be able to perform. As the multimedia involves more
than one medial element, including high-resolution graphics, high quality motion video, and one
need a faster processor for better performance.
In today’s scenario, a Pentium processor with MMX technology and a speed of 166 to 200 MHz
(Megahertz) is an ideal processor for multimedia. In addition to the processor one will need a
minimum 16 MB RAM to run WINDOWS to edit large images or video clips. But a 32 or 64
MB RAM enhances the capacity of multimedia computer.

(b) Monitor
As you know that monitor is used to see the computer output. Generally, it displays 25 rows and
80 columns of text. The text or graphics in a monitor is created as a result of an arrangement of
tiny dots, called pixels. Resolution is the amount of details the monitor can render. Resolution is
defined in terms of horizontal and vertical pixel (picture elements) displayed on the screen. The
greater the number of pixels, better visualization of the image.

Like any other computer device, monitor requires a source of input. The signals that monitor gets
from the processor are routed through a graphics card. But there are computers available where
this card is in-built into the motherboard. This card is also called the graphics adapter or display
adapter. This card controls the individual pixels or tiny points on a screen that make up image.
There are several types of display adapter available. But the most popular one is Super Virtual
Graphics Arrays (SVGA) card and it suits the multimedia requirement. The advantage of having
a SVGA card is that the quality of graphics and pictures is better.

Now the PCs, which are coming to the market, are fitted with SVGA graphics card. That allows
images of up to 1024 ´ 768 pixels to be displayed in up to 16 millions of colours. What
determines the maximum resolution and color depth is the amount of memory on the display
adapters. Often you can select the amount of memory required such as 512KB, 1MB, 2MB,
4MB, etc. However, standard multimedia requirement is a 2MB of display memory (or Video
RAM). But one must keep in mind that this increases the speed of the computer, also it allows
displaying more colours and more resolutions. One can easily calculate the minimum amount of
memory required for display adapter as (Max. Horizontal Resolution x Max. Vertical Resolution
´ Colour Depths. in Bits )/8192 = The minimum video (or display) memory required in KB.

For example, if SVGA resolution (800´600) with 65,536 colours (with colour depth of 16) you
will need (800 x 600 x 16) / 8192 = 937.5 KB, i.e., approximately 1 MB of display memory.

Another consideration should be the refresh rate, i.e., the number of times the images is painted
on the screen per second. More the refresh rate, better the image formation. Often a minimum of
70-72 MHz is used to reduce eye fatigue. As a matter of fact higher resolution requires higher
refresh rates to prevent screen flickers.

(c) Video Grabbing Card

As we have already discussed, we need to convert the analog video signal to digital signal for
processing in a computer. Normal computer will not be able to do it alone. It requires special
equipment called video grabbing card and software to this conversion process. This card
translates the analog signal it receives from conventional sources such as a VCR or a video
camera, and converts them into digital format. The software available with it will capture this
digital signal and store them into computer file. It also helps to compress the digitized video so
that it takes lesser disk space as compared to a non-compressed digitized video.

This card is fitted into a free slot on the motherboard inside the computer and gets connected to
an outside source such as TV, VCR or a video camera with the help of a cable. This card
receives both video and audio signal from the outside source and conversion from analog to
digital signal takes place. This process of conversion is known as sampling. This process
converts the analog signal to digital data streams so that this signal can be stored in binary data
format of 0’s and 1’s. This digital data stream is then compressed using the video capturing
software and stores them in the hard disk as a file. This file is then used for incorporation into
multimedia. This digitized file can also be edited according to the requirements using various
editing software such as Adobe Premiere.

A number of digitizer or video grabbing cards are available in the market. However, one from
Intel called Intel Smart Video Recorder III does a very good job of capturing and compressing
video.

(d) Sound Card

Today’s computers are capable of creating the professional multimedia needs. Not only you can
use computer to compose your own music, but it can also be used for recognition of speech and
synthesis. It can even read back the entire document for you. But before all this happens, we
need to convert the conventional sound signal to computer understandable digital signals. This is
done using a special component added to the system called sound card. This is installed into a
free slot on the computer motherboard. As in the case of video grabber card, sound card will take
the sound input from outside source (such as human voice, pre-recorded sounds, natural sounds
etc.) and convert them into digital sound signal of 0’s and 1’s. The recording software used
alongwith the sound card will store this digitised sound stream in a file. This file can latter be
used with multimedia software. One can even edit the digitised sound file and add special sound
effects into it.

Most popular sound card is from Creative Systems such as Sound Blaster-16, AWE32, etc.
AWE32 sound card supports 16 channel, 32 voice and 128 instruments and 10 drums sound
reproduction. It also has CD-ROM interface.

(e) CD-ROM Drive

CD-ROM is a magnetic disk of 4.7 inches diameter and it can contain data up to 680 Megabytes.
It has become a standard by itself basically for its massive storage capacity, faster data transfer
rate. To access CD-ROM a very special drive is required and it is known as CD-ROM drive. Let
us look into the term ROM that stands for ‘Read Only Memory’. It means the material contained
in it can be read (as many times, as you like) but the content cannot be changed.

As multimedia involves high resolution of graphics, high quality video and sound, it requires
large amount of storage space and at the same time require a media, which can support faster
data transfer. CD-ROM solves this problem by satisfying both requirements.
Similar to the hard disk drive, the CD-ROM drive has certain specification which will help to
decide which drive suit best to your multimedia requirement.

(i) Transfer Rate

Transfer rate is basically the amount of data the drive is capable of transferring at a sustained rate
from the CD to the CPU. This is measured in KB per second. For example, 1x drive is capable of
transferring 150KB of data from the CD to the CPU. In other terms 1x CD drive will sustain a
transfer rate of 150KB/sec, where x stands for 150 KB. This is the base measurement and all
higher rates are multiple of this number, x. Latest CD-ROM drive available is of 64x, that means
it is capable of sustaining a data transfer rate of 64x150=9600 KB =9.38MB per second from the
CD to the CPU.

(ii) Average Seek time

The amount of time lapses between request and its delivery is known as average seeks time. The
lower the value better the result and time is measured in milliseconds. A good access time is
150ms.

Recently computer technology has made tremendous progress. You can now have CDs which
can ‘write many, read many’ times. This means you can write your files in to a blank CD through
a laser beam. The written material can be read many times and they can even be erased and re-
written again. Basically this re-writable CD’s can be used a simple floppy disk.

(f) Scanner
Multimedia requires high quality of images, graphics to be used. And it takes lot of time creating
them. However there are ready-made sources such as real life photographs, books, arts, etc.
available from where one easily digitized the required pictures. To convert these photographs to
digital format, one need a small piece of equipment called scanner attached to the computer. A
scanner is a piece of computer hardware that sends a beam of light across a picture or document
and records it. It captures images from various sources such as photograph, poster, magazine,
book, and similar sources. These pictures then can be displayed and edited on a computer. The
captured or scanned pictures can be stored in various formats like;

File Format Explanation

PICT - A widely used format compatible with most Macintosh

JPEG - Joint Photographic Experts Group - a format that compresses files and lets you choose
compression versus quality

TIFF - Tagged Image File Format - a widely used format compatible with both Macintosh and
Windows systems

Windows BMP - A format commonly used on MS-DOS and MS-Windows computers

GIF - Graphics Interchange Format - a format used on the Internet, GIF supports only 256
colours or grays Scanners are available in various shapes and sizes like hand-held, feed-in, and
flatbed types. They are also for scanning black-and-white only or color. Some of the reputed
vendors of scanner are Epson, Hewlett-Packard, Microtek and Relisys.

(g) Touch screen

As the name suggests, touch screen is used where the user is required to touch the surface of the
screen or monitor. It is basically a monitor that allows user to interact with computer by touching
the display screen. This uses beams of infrared light that are projected across the screen surface.
Interrupting the beams generates an electronic signal identifying the location of the screen. And
the associated software interprets the signal and performs the required action. For example,
touching the screen twice in quick succession works as double clicking of the mouse. Imagine
how useful this will be for visually handicapped people who can identify things by touching a
surface. Touchscreen is normally not used for development of multimedia, it is rather used for
multimedia presentation arena like trade show, information kiosk, etc.

5 Uses of Multimedia

Placing the media in a perspective within the instructional process is an important role of the
teacher and library professional. Following are the possible areas of application of multimedia:
• Can be used as reinforcement
• Can be used to clarify or symbolize a concept
• Creates the positive attitude of individuals toward what they are learning and the learning
process itself can be enhanced.
• The content of a topic can be more carefully selected and organized
• The teaching and learning can be more interesting and interactive
• The delivery of instruction can be more standardized.
• The length of time needed for instruction can be reduced.
• The instruction can be provided when and where desired or necessary.

Key Concepts in Windows Media Technologies

To put together a solution for delivering digital media on a network, you first need to understand
some basic concepts. It is easy to deal with one box that does everything with the push of a
button, like a TV. However, to understand digital media delivery on a network, you need to have
an understanding of a system that is bigger than one box.

A network digital media system, like the type you can put together with Microsoft® Windows
Media™ Technologies, involves several boxes and a lot of cable. It also involves integration
with other components, like network hardware and video capture cards. To understand all there
is to know about network multimedia, you would need to be an expert in producing audio and
video content, computer software development, networking, Web scripting and design, and
business plans, among other things.

Fortunately, you don't have to know everything to start using Windows Media Technologies to
deliver digital media over a network. If you know how to produce audio and video content, know
how to use a computer, and have general knowledge of network multimedia concepts, you can
get started. From there, you can expand your knowledge and explore the possibilities.
This part of the Introduction to Windows Media Technologies explains some basic concepts of
digital media delivery over a network, and contains the following sections:
• Getting from Here to There. The process of delivering digital media over a network.
• Capture and Convert
• Distribute
• Play
• Downloading. A method of delivering digital media over a network in which users copy
files.
• Streaming. A method of digital media delivery in which audio and video content is
delivered to users, but files are not copied.
• Compressing. Making digital media small enough to fit through the network.
• Encoding. Putting digital media in the correct format to be streamed.

Getting from Here to There

From a high-level viewpoint, the basic process of getting content from here to there follows this
sequence:
1. Capture
2. Convert
3. Distribute
4. Play
To help you understand the process, let's say you want to make a movie on VHS tape available
for streaming on the Internet.

Capture and Convert

The first thing you do is capture the movie to a file on your computer. This process is called
digitizing or capturing. You convert your analog audio and video to a digital form that can be
saved as a file.

To capture from a VHS tape, you plug the video and audio outputs from your VCR into a video
capture card on your computer. You then use a capture program to digitize the analog signal.
Many capture cards include a simple capture program. Most of these save the digitized media as
an AVI file, which is a standard Microsoft video file format. After the video is saved as an AVI
file, you use Microsoft Windows Media Encoder to convert it into a Windows Media file that
can be streamed. You can also capture directly to a Windows Media file by using Windows
Media Encoder.

Figure 1. The process of capturing and converting audio and video

When you capture audio and video to your computer, it is no longer sound and pictures. It is
data. Analog information from your VCR is converted into a digital stream of zeros and ones,
or bits. It helps to think of bits as a long series of instructions. The bits aren't the audio or video
itself, but rather a series of instructions for how to recreate the audio or video in analog form.

Distribute
With your movie digitized to a file on your computer, you can distribute it just as you would any
other data. For example, you can make copies on floppy disks, CD-ROMs, or other storage
media, and then send them in the mail to your audience. You can also distribute the data over a
network, such as the Internet.

A network is created when two or more computers are linked so that data can be exchanged
between them. Corporate intranets can consist of hundreds or thousands of networked
computers; the Internet consists of millions.

There are two types of computers on a network:

• Servers
• Clients

A client requests data from a server, and a server handles the request and sends the data back.
One of the advantages of Microsoft Windows® operating systems is that a computer can be
either a client or server depending on what a user wants to do. For example, a computer can be
used to copy files from another computer, and another computer can be used to copy files from
the first computer.

There are, however, special computers used on networks that have server operating systems, and
they are configured for and capable of handling large numbers of client requests. A computer
running Microsoft Internet Information Services (IIS) on Microsoft Windows 2000 Server can be
configured as a Web server for distributing Web pages, images, and other files to thousands of
clients on the Internet or an intranet. The server can also run Windows Media Services for
delivering streaming media.

Digital media can be delivered to clients over a network using one of two methods:

• Downloading
• Streaming

The Windows Media file format is optimized for streaming, but the files can be downloaded as
well. The best way to stream Windows Media files is by hosting them on a server running
Windows Media Services.

After encoding your digital media to a Windows Media file, you host a file by copying or
publishing the file to a location on the server. This location is called a publishing point. When a
request is received from a client, Windows Media Services accesses the digital media from this
publishing point. Then, assuming the server computer has a high-speed connection to an ISP and
is properly registered on the Internet, users can play the digital media.
 Play
The final step is accessing and then converting the bits—the digital instructions—back to analog
form so the movie can be viewed. An end user does this with Windows Media Player. A digital
media file can be opened and played directly if it is on the end user's computer or another
computer connected through a LAN (Local Area Network). An end user can also play Windows
Media files by streaming them from a Windows Media server. This is done by entering the URL
(Uniform Resource Locator) of the digital media in the player.

The URL for accessing Windows Media files and streams from a Windows Media server is
similar to the URL for accessing Web pages from a Web server. The main difference is the
protocol used. An end user opens a Web page with a URL such as http://WebServer/default.htm.
An end user opens a movie on your Windows Media server by entering a URL using the
Windows Media protocol, such as mms://WMServer/MyMovie.wmv.

End users can open a Windows Media file by entering a URL in Windows Media Player, but
typically, the digital media is accessed from a link on a Web page. For example, an end user can
come to a page for a radio station, read the information on the page, and then click a link to some
Windows Media-based content. When the user clicks the link, Windows Media Player opens and
initiates a connection to the file on the server. After the connection is established, the digital
media starts to play.

There are three main ways to incorporate Windows Media in your Web design. You can put a
simple link on a page that opens Windows Media Player outside the browser and initiates the
connection between the player and the digital media. This design enables the end user to
continue to surf with the browser while listening to the stream. Another method is to embed the
player in your Web page using OBJECT tags in your HTML. This method enables you to
integrate the design of the player with that of your page. The third method uses a simple link but
opens the digital media in the Windows Media Player radio toolbar that is built into Microsoft
Internet Explorer 5.

The complete Windows Media system involves capturing, encoding, distributing, and playing
digital media. In the following sections, we take a closer look at downloading and streaming, and
what happens during the encoding process.

Downloading
When you download a file, you copy the file from one computer to another over a network. This
is similar to copying a file locally from a floppy disk to your hard disk drive.

When you want to play content that is available for downloading, you click a hyperlink on a Web
page that points to a file on a Web server. Your browser initiates the process of copying the file
from the server. After the file has been copied to your hard disk drive, you can open and play it
by using software such as Windows Media Player.

Downloading files takes time because you have to wait for all of the data to be copied from the
server to your hard disk drive before you can play the file. Copying time is directly related to the
available bandwidth of the network and the communication speed of your modem (or NIC).
Network bandwidth can be compared to a water pipe. If you connect to the Internet by using a
modem and telephone line, the size of your pipe is very narrow—only a limited quantity of data
can get through in a given amount of time. A file is like a tank of water. A very large tank of
water takes a long time to go through a small pipe. A large file can take several minutes to
download over the Internet. However, it may only take a few seconds to copy locally from a CD-
ROM to your hard drive, for example, because the bandwidth is much higher.

Figure 2. Bandwidth available with a slow Internet connection versus a local transfer

When a user plays digital media,

Windows Media Player uses the
instructions contained in the bits
to recreate the original sounds
and pictures. The more
instructions you have, the better
the rendition, and the higher the
quality; the more bits, the bigger
the file, and the longer the
download time.

Streaming
What if you could skip the download process and simply play the data as it is being received by
your computer? Instead of waiting for the bits to be copied, they would be converted and played
as soon as they arrive. This is the concept of streaming. The bits are played as they are being
received from a server on a network and are usually not saved on your hard disk drive.

With streaming media, you get instant gratification—there is no download wait. Streaming an
audio or video file is like playing a CD or tape. You have all the same playback controls, like
play, pause, stop, and rewind. The only thing you don't have is the physical media. That is, the
tape or CD. You can choose what you want to listen to and when you listen to it.

Streaming also enables you to do live broadcasting, just like a radio or television station, except
over the Internet. You can eliminate the need for files altogether. Windows Media Encoder sends
the bits it creates directly over a network to a player, instead of to a file.

For streaming to work, the bit rate of the media must be lower than the bandwidth of the
network. Bit rate is the speed at which data is sent across the network. Returning to the plumbing
metaphor, if bandwidth is the size of the pipe, the bit rate is the amount of water—or data per
second—that can travel through the pipe. Because you are playing the digital media as it is being
received, if the network bandwidth is lower than the bit rate of the media, the media will not play
properly.

If you download a still image over a slow connection, the image quality will not be affected. It
will just take longer for all the bits to get to your computer. The still image itself does not have a
bit rate. On the other hand, streaming media does have a bit rate. As long as the content is
playing in Windows Media Player, the bits are streaming at a steady and continuous rate. The
player must receive a stream of bits continuously or the picture and sound will either stop or will
play back unevenly. Think of it this way: when you encode a file for downloading, file size is
important and bit rate is irrelevant. When you encode a file for streaming, file size is irrelevant
and bit rate is important. You can easily stream a very large file, even one that has an
undetermined size (such as a live stream), as long as the bit rate is within a client's bandwidth.

Compressing
The bit rate of high-resolution, full-frame, broadcast video is about 128 megabits per second
(Mbps). To download one second of broadcast video over a 28.8 kilobit per second (Kbps)
connection using a modem would take one hour and 14 minutes. Streaming this type of video
would be impossible over a network. To recreate every detail of a video frame would require so
many instructions that most computers couldn't even play the video. It would also require a huge
amount of storage space for the file. Windows Media Technologies handles this problem by
using compression. Compression lowers the bit rate while maintaining the best possible quality.

A compression algorithm analyzes the data and removes or changes bits so that the integrity of
the original content is maintained as much as possible, while reducing the file size and bit rate.
Windows Media Encoder compresses the data when you create a Windows Media file, and
Windows Media Player decompresses the data when you play it.

There are two types of compression: lossless and lossy. As the names suggest, with lossless
compression, data can be compressed and decompressed, and the decompressed data matches the
original data exactly. With lossy compression, data is lost during the compression process and
cannot be recovered during decompression. The amount of data lost depends on the quality of the
compression algorithm and the amount of compression applied to the data. To achieve the low
bit rates necessary to stream audio and video over the Internet, streaming media compression and
decompression algorithms (called codecs) are lossy.

Windows Media Technologies has been engineered to get the highest quality possible at a
number of bandwidths and to automatically adjust the stream to accommodate unevenness in
available Internet bandwidth. When you select a quality option in Windows Movie Maker or
Windows Media Encoder, the digital content is compressed so that it does not exceed a given
bandwidth. Therefore, you can create content with a bit rate of 20 Kbps, for example, that will
play correctly on a computer that is receiving the movie over a 28.8 Kbps connection. You can
also create a movie at 384 Kbps that will stream over a high-speed connection, also known as
a broadband connection, such as when using ISDN, DSL, or a cable modem. A consequence of
reducing the bit rate is a reduction in file size. A file that has been encoded for streaming may
also be suitable for downloading or copying to a disk.

The Windows Media Audio and Windows Media Video codecs are used to compress your digital
content. Aside from enabling high-quality playback of audio and video, they are designed to help
the stream withstand highly variable bandwidth conditions. For example, when data is lost in
transmission, the video codec attempts to fill in the missing parts of the frame. The audio codec
enables you to get very good audio quality at relatively low bit rates. For example, you can get
close to CD-quality audio at a small fraction of the bit rate and file size of uncompressed CD
audio. A standard CD can hold a little over an hour of music. If you compress the music with the
Windows Media Audio codec, you could have near CD-quality playback and fit 10 or more
hours of music on one CD.

Encoding
When Windows Media Encoder converts a file or captured audio and video, it first compresses
the data, and then encodes it with the Windows Media Format. After digital media has been
compressed and encoded, it can be saved as a Windows Media file. If the digital media is a live
broadcast, the media is delivered in real-time to a Windows Media server, from which it is
streamed to players that are connected to the server.

8.2: Digital Video and electronic Commerce

E-commerce and Video distribution, a series of blogs that will serve to inform and foster
discussion of the various methods, platforms and issues regarding the impact that e-commerce
has had on physical and digital distribution of online download and streaming video media. In
this installment we will discuss the download and streaming mediums of digital video
distribution (at a non technical level) and how the internet and e-commerce have been embraced
to optimize their distribution.

In the initial installment of this blog series physical mediums of video distribution were
discussed, also introduced were the newer means of digital media distribution. However reluctant
older generations may be to abandon their traditional television sets, DVDs and higher quality
Blu-ray discs, younger generations have already largely left them behind; opting for the
instantaneous access to content that the internet provides (3). The Hollywood community,
television and cable networks, independent film producers, distributors and innovative service
providing companies have become aware of this trend and have already(in varying degrees)
begun to form business models that incorporate, strategize, invest in, and map out the transition
to this new frontier of video distribution. Though this new medium clearly has already
demonstrated amazing promise, it is also plagued with the same obstacles that the emerging
physical mediums have faced. That is: format disputes, content availability, concerns of security
of content rights and how to manage those rights, improving quality, monetization of content
distribution and advertisement, and as previously mentioned technology adoption and
convergence issues(1, 4).

Digital distribution is the dissemination of content over the internet in the form of products or
services, such as software, video games, books, music, television programs, and films(1).
Content such as this is easily digitized and cost effectively transferable over the internet and
other networks. Digital distribution has increased in popularity and accessibility since the turn of
the century, due largely in part to the burgeoning consumer availability of broadband
connections (1). Of course underscoring this growing popularity is the improvement in PC
technologies. Particularly innovations that have lead to the PC becoming an entertainment
platform such as increased processing power, connectivity to a variety of displays and increased
compression and decompression of high quality video and audio
Video on Demand, Digital Downloads and Streaming Video
Video on demand (VOD) is the term used to describe means for online and cable/satellite video
distribution that allows users to access content at their convenience. As early as 1994, cable
companies and the first generation of online digital distribution were set into motion. Content
can be purchased on a pay-per-view, micropayment basis and has increasingly become free in
many instances. In addition to the convenience of anytime access, the user is provided with
familiar functionality such as pause, fast forward and rewind options. Lending to its
attractiveness, as this functionality is typically not available with live TV. This emerging
industry is quickly becoming saturated with providers yet as with the physical mediums, no clear
standardization exists among the competition. While the instantaneous access to plug in players
is available, and various set top converter boxes have been manufactured, those who are still
turned off by the fact that they must view this content on their PC are holding out for a
standardized format(5).

VOD systems either allow users to download content directly to their PC or compatible set top
box for later play back, or allow users to stream video live. Downloads have their benefits and
disadvantages. For one, typically a higher quality product is obtained and in some instances can
be transferred to physical mediums. The downside is the often long periods of time required for
downloading the content, and the amount of space that each download requires. Streaming video
is a growing method for acquiring multimedia formats quickly, particularly for users who do not
have fast enough connections, the patience to download video content in a timely fashion, or the
required memory space. Streaming is a technique for transferring data so that it is processed by
the receiving application as a steady stream of data. Streaming utilizes a buffer that collects and
saves excess data and steadily streams it to a plug in player application that can convert the data
to sound and pictures before the entire file is downloaded (2).

For the artist, independent film producer and distributor, the direct nature of the internet has
allowed some to bypass the entrenched traditional publishing industry. Providing the opportunity
for smaller and largely unfunded artist to implement and in some cases develop new business
models to distribute their content. The artist, independent producer or distributor can get their
work or product into the public sphere with relatively little cost and despite a lack of industry
connections that have traditionally dominated the market. Clearly the obvious advantage of
utilizing the established publishing industry is that they have established avenues and capital to
fund the creation, as well as the means to advertise and distribute work to retail outlets on behalf
of the artist. However, these traditional chains do have some draw backs, for example limited
acceptance of artists and genres, decreased profitability, and loss of control over the direction
and creativity of content produced. Digital distribution, the Internet, and e-commerce, have
opened up the same distribution channels that major publishers and distributors utilize, while
also providing new marketing and promotional services. Furthermore, reduced manufacturing
costs of media content has the potential of leading to lower prices for the consumer, increased
revenues for the artist and subsequently increased freedom of artistic expression.

From consumer and business perspectives, digital distribution has many advantages. One such
advantage is the global availability of content (however existing content rights issues limit this
international availability). For the consumer, access is granted as long as he or she has an active
and sufficient internet connection. Time is no longer an issue, as content is directly transferred at
the purchaser’s convenience. For the traditional brink and mortar shopper, time taken and
resources needed to obtain products, as well as limited local availability are no longer issues. For
the ever growing populace of internet shoppers, time spent in anticipation for the product to
arrive (though this may be relative) and the related shipping costs for those products are
eliminated. For businesses, costs related to producing, shipping, housing and protecting physical
copies of the work are greatly reduced. Another strength of digital distribution is that large back
catalog's can be maintained and easily managed as they do not require the immense warehouse,
physical shelf space and resources that they would require in traditional brick and mortar retail
stores, more innovative click and mortar retailers or solely internet based operations (1).
Furthermore, given the nature of the Internet, content is introduced and aimed at a substantially
larger market with 24 hour a day, 7 day a week, Yearlong access. These strengths provide a
definite advantage over competition that solely relies on costly constraint of dealing with
physical forms of media and who do not embrace the new digital distribution mediums. However
as we will later learn, there is substantial reluctance in the industry to promote digital distribution
that will in anyway minimize the revenue generated from advertisement and direct sales of video
content via physical playback and television distribution.

Digital Distribution and Marketing

The increased popularity and availability of streaming and downloadable content, such as
television shows and viral videos, has created a medium or better yet an incentive for advertisers
to reach customers who routinely view such content. Undoubtedly for the readers of this blog,
the notion that failure to quickly establish standardized formats and platforms from which to
distribute and market videos, has created long and costly “format wars” that stifle their
penetration into the marketplace and ultimate success, is a well ingrained concept. As a report
released by LiveRail indicates, the multitude of formats, video players, reporting methods, and
even lack of consensus on terminology in the industry of video advertising has created an
environment of confusion that has also stifled the effectiveness and thus the confidence of online
advertisers; having a detrimental impact on the ease that they can distribute their content among
the various content service providers and vice versa. Ultimately reducing the motivation of
content providers to allow free access of to their material, or for that matter for a fee. Another
issue, which I will discuss, is the reluctance of many advertisers and networks to fully embrace
the potential of online video advertising, particularly with streaming video content, due to the
indication of a widespread consumer preference for viewing content on their television sets. In
addition is the time honored day/time slots with specific relevancy and demographics that
advertisers have traditionally reached and relied upon during normal television cable broadcast
times.

A great example of TV preference over online, is that of the 2008 Olympics provided by
LiveRail’s report. Interestingly, while they did procure 1.2 billion web page views, this was
comparable to sites like Yahoo Sports. Though NBC took it upon themselves to generate buzz
about their web coverage of the Olympics, they also feared they would harm their attractiveness
toward advertisers and the revenues they could generate via traditional broadcast mediums and
so limited the availability of their web content. Undoubtedly hindering the advertising
monetization that they could have generated had they not do so. This was quite likely an
unwarranted precaution. As LiveRail mentions, surveys of viewer’s usage and preferences would
indicate otherwise. Other sources suggest that preference for viewing content on their larger
television sets will remain despite the availability of video on demand via web and other sources.
One projection estimates that monthly television watching time will remain unchanged and only
be augmented by an addition of 38% or nearly two additional hours of viewing time online and
via other video on demand sources by 2012.

Although stated earlier as an unwarranted precaution, it is clear that most of network and cable
TV broadcasters are reliant on advertising dollars and sales of specific time slots to be viewed on
traditional mediums to produce their revenues. Hence they do not want to endanger their
longstanding and proven business models. They have come to rely on certain demographics
watching on certain days and at certain times and charge for these slots accordingly. There are
also time relevant advertisements that attach themselves to certain shows, which attempt to
attract customers during normal business hours, sales times, or even the ads to get you into the
open till 2am burger joints. It has been a big fear that these ads will not have their relevance if a
video can then be viewed at any time the viewer wishes to watch them. It appears that advertisers
however have not considered the potential to more efficiently target perspective customers using
the data collection tools that things such as individual preferences and search histories provide.
They also fear that given the option, viewers will opt to skip advertisements if given the choice.
This is simply not the case if the figures presented by LiveRail are accurate. They report that
average completion rate of 15 and 30 second in stream pre rolls are 79 and 84%. To clarify
stream rolls are advertisements that appear during streaming video content, usually pre (before)
mid (during) or post (following). Given these completion rates and the potential there is to
produce advertising revenues and as formats become more standardized, advertisements will
increase and almost every streaming video will have some sort of advertisement attached to it.
The industry will soon reach critical mass as online video advertisement becomes a more
effective and efficient medium for reaching a vast number of people that may have been missed
on TV or possibly which can be reached on TV and online and whatever other medium they use
to advertise. Interestingly Youtube has announced that it will begin to air post roll adds on some
of its videos and I am sure others will follow. The finding as reported by LiveRail, that only
20.9% of streaming videos is being monetized by some sort of advertisement will likely increase
very soon. This may be specific to their content but they have found that pre rolls and overlays
do turn off the viewer and reduce their potential of being viewed, however viewers are more
likely to view post rolls.

Conclusion

Most believe that electronic distribution will and to some extent has become a viable and
mainstream option for media distribution and acquisition. However the amazing penetration that
the DVD market (and likely the Blu-ray market) has had and continues to have in US households
cannot be ignored. It is also very evident that digital distribution and its monetization is not
immune to the so called format wars and their influence on consumer behavior as well as the rate
at which victorious formats and resultant products penetrate the market. It is clear that regardless
of format or medium, the power that the internet and e-commerce provide in capitalizing on the
video distribution industry is immense. As with other enterprises the success of online digital
video distribution is dependent on standardization, leadership and business models that absorb
lessons in innovation, in letting the marketplace determine what works and doesn’t work as well
as what it wants. The ability to incorporate, anticipate and fearlessly confront technological
change in an ever changing industry is essential to the survival of a video distribution company.

Thank you for reading this second installment of the E-commerce and Video Distribution blog
series. I hope that it has been and enjoyable experience and that it has informed and fostered
some points for discussion. Please feel free to comment and provide additional or updated
information, as your participation is crucial for the enlightenment of the author and the
readership. Stay tuned to the next installment that will discuss digital rights management and
piracy issues.

8.3: Desktop video processing & Desktop video conferencing

8.3.1: Video Processing – The Basics

The camera on the video processing lab bench generates a video signal in NTSC format. NTSC
is a standard for transmitting and displaying video that is used in television. The signal from the
camera is connected to the "composite input" on the IDK board (the yellow plug). This is
illustrated in Figure 2-1 on page 2-3 of the IDK User's Guide. Notice that the IDK board is
actually two boards stacked on top of each other. The bottom board contains the C6711 DSP,
where your image processing algorithms will run. The daughterboard is on top, it contains the
hardware for interfacing with the camera input and monitor output. For future video processing
projects, you may connect a video input other than the camera, such as the output from a DVD
player. The output signal from the IDK is in RGB format, so that it may be displayed on a
computer monitor.

At this point, a description of the essential

terminology of the IDK environment is in
order. The video input is first decoded and
then sent to the FPGA, which resides on the
daughterboard. The FPGA is responsible
for video capture and for the filling of the
input frame buffer (whose contents we will
read). For a detailed description of the
FPGA and its functionality, we advise you
to read Chapter 2 of the IDK User's Guide.

The Chip Support Library (CSL) is an abstraction layer that allows the IDK daughterboard to be
used with the entire family of TI C6000 DSPs (not just the C6711 that we're using); it takes care
of what is different from chip to chip.

The Image Data Manager (IDM) is a set of routines responsible for moving data between on-chip
internal memory, and external memory on the board, during processing. The IDM helps the
programmer by taking care of the pointer updates and buffer management involved in
transferring data. Your DSP algorithms will read and write to internal memory, and the IDM will
transfer this data to and from external memory. Examples of external memory include temporary
"scratch pad" buffers, the input buffer containing data from the camera, and the output buffer
with data destined for the RGB output.

The two different memory units exist to provide rapid access to a larger memory capacity. The
external memory is very large in size – around 16 MB, but is slow to access. But the internal is
only about 25 KB or so and offers very fast access times. Thus we often store large pieces of
data, such as the entire input frame, in the external memory. We then bring it in to internal
memory, one small portion at a time, as needed. A portion could be a line or part of a line of the
frame. We then process the data in internal memory and then repeat in reverse, by outputting the
results line by line (or part of) to external memory. This is full explained in Project Lab 2, and
this manipulation of memory is important in designing efficient systems.

The TI C6711 DSP uses a different instruction set than the 5400 DSP's you are familiar with in
lab. The IDK environment was designed with high level programming in mind, so that
programmers would be isolated from the intricacies of assembly programming. Therefore, we
strongly suggest that you do all your programming in C. Programs on the IDK typically consist
of a main program that calls an image processing routine.

The main program serves to setup the memory spaces needed and store the pointers to these in
objects for easy access. It also sets up the input and output channels and the hardware modes
(color/grayscale ...). In short it prepares the system for our image processing algorithm.

The image processing routine may make several calls to specialized functions. These specialized
functions consist of an outer wrapper and an inner component. The wrapper oversees the
processing of the entire image, while the component function works on parts of an image at a
time. And the IDM moves data back and forth between internal and external memory.

As it brings in one line in from external memory, the component function performs the
processing on this one line. Results are sent back to the wrapper. And finally the wrapper
contains the IDM instructions to pass the output to external memory or wherever else it may be
needed.

Please note that this is a good methodology used in programming for the IDK. However it is very
flexible too, the "wrapper" and "component functions" are C functions and return values, take in
parameters and so on too. And it is possible to extract/output multiple lines or block etc. as later
shown.

In this lab, you will modify a component to implement the flipping and inverting algorithm. And
you will perform some simple auto-contrasting as well as work with color.
In addition, the version of Code Composer that the IDK uses is different from the one you have
used previously. The IDK uses Code Composer Studio v2.1. It is similar to the other version, but
the process of loading code is slightly different.

Code Description
This section provides a hands-on introduction to the IDK environment that will prepare you for
the lab exercise. First, connect the power supply to the IDK module. Two green lights on the
IDK board should be illuminated when the power is connected properly.

You will need to create a directory img_proc for this project in your home directory. Enter this
new directory, and then copy the following files as follows (again, be sure you're in the directory
img_proc when you do this):

• copy V:\ece320\idk\c6000\IDK\Examples\NTSC\img_proc

• copy V:\ece320\idk\c6000\IDK\Drivers\include

• copy V:\ece320\idk\c6000\IDK\Drivers\lib

After the IDK is powered on, open Code Composer 2 by clicking on the "CCS 2" icon on the
desktop. From the "Project" menu, select "Open," and then open img_proc.pjt. You should see a
new icon appear at the menu on the left side of the Code Composer window with the label
img_proc.pjt. Double click on this icon to see a list of folders. There should be a folder labeled
"Source." Open this folder to see a list of program files.

The main.c program calls the img_proc.c function that displays the output of four image
processing routines in four quadrants on the monitor. The other files are associated with the four
image processing routines. If you open the "Include" folder, you will see a list of header files. To
inspect the main program, double click on the main.c icon. A window with the C code will
appear to the right.

Scroll down to the tskMainFunc() in the main.c code. A few lines into this function, you will see
the line LOG_printf(&trace,"Hello\n"). This line prints a message to the message log, which can
be useful for debugging. Change the message "Hello\n" to "Your Name\n" (the "\n" is a carriage
return). Save the file by clicking the little floppy disk icon at the top left corner of the Code
Composer window.

To compile all of the files when the ".out" file has not yet been generated, you need to use the
"Rebuild All" command. The rebuild all command is accomplished by clicking the button
displaying three little red arrows pointing down on a rectangular box. This will compile every
file the main.c program uses. If you've only changed one file, you only need to do a "Incremental
Build," which is accomplished by clicking on the button with two little blue arrows pointing into
a box (immediately to the left of the "Rebuild All" button). Click the "Rebuild All" button to
compile all of the code. A window at the bottom of Code Composer will tell you the status of the
compiling (i.e., whether there were any errors or warnings). You might notice some warnings
after compilation - don't worry about these.

Click on the "DSP/BIOS" menu, and select "Message Log." A new window should appear at the
bottom of Code Composer. Assuming the code has compiled correctly, select "File" -> "Load
Program" and load img_proc.out (the same procedure as on the other version of Code
Composer). Now select "Debug" -> "Run" to run the program (if you have problems, you may
need to select "Debug" -> "Go Main" before running). You should see image processing routines
running on the four quadrants of the monitor. The upper left quadrant (quadrant 0) displays a low
pass filtered version of the input. The low pass filter "passes" the detail in the image, and
attenuates the smooth features, resulting in a "grainy" image. The operation of the low pass filter
code, and how data is moved to and from the filtering routine, was described in detail in the
previous section. The lower left quadrant (quadrant 2) displays the output of an edge detection
algorithm. The top right and bottom right quadrants (quadrants 1 and 3, respectively), show the
original input displayed unprocessed. At this point, you should notice your name displayed in the
message log.

The program flow for image processing applications may be a bit different from your previous
experiences in C programming. In most C programs, the main function is where program
execution starts and ends. In this real-time application, the main function serves only to setup
initializations for the cache, the CSL, and the DMA (memory access) channel. When it exits, the
main task, tskMainFunc(), will execute automatically, starting the DSP/BIOS. It will loop
continuously calling functions to operate on new frames and this is where our image processing
application begins.

The tskMainFunc (), in main.c, opens the handles to the board for image capture (VCAP_open())
and to the display (VCAP_open()) and calls the grayscale function. Here, several data structures
are instantiated that are defined in the file img_proc.h. The IMAGE structures will point to the
data that is captured by the FPGA and the data that will be output to the display. The
SCRATCH_PAD structure points to our internal and external memory buffers used for
temporary storage during processing. LPF_PARAMS is used to store filter coefficients for the
low pass filter.

The call to img_proc() takes us to the file img_proc.c. First, several variables are declared and
defined. The variable quadrant will denote on which quadrant of the screen we currently want
output; out_ptr will point to the current output spot in the output image; and pitch refers to the
byte offset (distance) between two lines. This function is the high level control for our image-
processing algorithm. See algorithm flow.

Figure 1: Algorithm Flow

The first function called is the pre_scale_image function in the file pre_scale_image.c. The
purpose of this function is to take the 640x480 image and scale it down to a quarter of its size by
first downsampling the input rows by two and then averaging every two pixels horizontally. The
internal and external memory spaces, pointers to which are in the scratch pad, are used for this
task. The vertical downsampling occurs when every other line is read into the internal memory
from the input image. Within internal memory, we will operate on two lines of data (640
columns/line) at a time, averaging every two pixels (horizontal neighbors) and producing two
lines of output (320 columns/line) that are stored in the external memory.

To accomplish this, we will need to take advantage of the IDM by initializing the input and
output streams. At the start of the function, two instantiations of a new structure dstr_t are
declared. You can view the structure contents of dstr_t on p. 2-11 of the IDK Programmer's
Guide. These structures are stream "objects". They give us access to the data when using the
dstr_open() command. In this case dstr_i is an input stream as specified in the really long
command dstr_open(). Thus after opening this stream we can use the get_data command to get
data one line at a time. Streams and memory usage are described in greater detail in the second
project lab. This data flow for the pre-scale is shown in data flow.

Figure 2: Data flow of input and output streams.

To give you a better understanding of how these streams are created, let's analyze the parameters
passed in the first call to dstr_open() which opens an input stream.

External address: in_image->data This is a pointer to the place in external memory serving as the
source of our input data (it's the source because the last function parameter is set to
DSTR_INPUT). We're going to bring in data from external to internal memory so that we can
work on it. This external data represents a frame of camera input. It was captured in the main
function using the VCAP_getframe() command.
External size: (rows + num_lines) * cols = (240 + 2) * 640 This is the total size of the input data
which we will bring in. We will only be taking two lines at a time from in_image->data, so only
240 rows. The "plus 2" represents two extra rows of input data which represent a buffer of two
lines - used when filtering, which is explained later.

Internal address: int_mem This is a pointer to an 8x640 array, pointed to by scratchpad-

>int_data. This is where we will be putting the data on each call to dstr_get(). We only need part
of it, as seen in the next parameter, as space to bring in data.

Internal size: 2 * num_lines * cols = 2 * 2 * 640 The size of space available for data to be input
into int_mem from in_image->data. We pull in two lines of the input frame so it num_lines *
cols. We have the multiply by 2 as we are using double buffering for bringing in the data. We
need double the space in internal memory than the minimum needed, the reason is fully
explained in IDK Programmer's Guide.

Number of bytes/line: cols = 640, Number of lines: num_lines = 2 Each time dstr_get_2D() is
called, it will return a pointer to 2 new lines of data, 640 bytes in length. We use the function
dstr_get_2D(), since we are pulling in two lines of data. If instead we were only bringing in one
line, we would use dstr_get() statements.

External memory increment/line: stride*cols = 1*640 The IDM increments the pointer to the
external memory by this amount after each dstr_get() call.

Window size: 1 for double buffered single line of data (Look at the three documentation pdfs for
a full explanation of double buffering) The need for the window size is not really apparent here.
It will become apparent when we do the 3x3 block convolution. Then, the window size will be
set to 3 (indicating three lines of buffered data). This tells the IDM to send a pointer to extract 3
lines of data when dstr_get() is called, but only increment the stream's internal pointer by 1
(instead of 3) the next time dstr_get() is called. Thus you will get overlapping sets of 3 lines on
each dstr_get() call. This is not a useful parameter when setting up an output stream.

Direction of input: DSTR_INPUT Sets the direction of data flow. If it had been set to
DSTR_OUTPUT (as done in the next call to dstr_open()), we would be setting the data to flow
from the Internal Address to the External Address.

We then setup our output stream to write data to a location in external memory which we had
previously created.

Once our data streams are setup, we can begin processing by first extracting a portion of input
data using dstr_get_2D(). This command pulls the data in and we setup a pointer (in_data) to
point to this internal memory spot. We also get a pointer to a space where we can write the
output data (out_data) when using dstr_put(). Then we call the component function pre_scale()
(in pre_scale.c) to operate on the input data and write to the output data space, using these
pointers.

The prescaling function will perform the horizontal scaling by averaging every two pixels. This
algorithm operates on four pixels at a time. The entire function is iterated within
pre_scale_image() 240 times, which results in 240 * 2 rows of data being processed – but only
half of that is output.

Upon returning to the wrapper function, pre_scale_image, a new line is extracted; the pointers
are updated to show the location of the new lines and the output we had placed in internal
memory is then transferred out. This actually happens in the dstr_put() function – thus is serves a
dual purpose; to give us a pointer to internal memory which we can write to, and the transferring
of its contents to external memory.

Before pre_scale_image() exits, the data streams are closed, and one line is added to the top and
bottom of the image to provide context necessary for the next processing steps (The extra two
lines - remember?). Also note, it is VERY important to close streams after they have been used.
If not done, unusual things such as random crashing and so may occur which are very hard to
track down.

Now that the input image has been scaled to a quarter of its initial size, we will proceed with the
four image processing algorithms. In img_proc.c, the set_ptr() function is called to set the
variable out_ptr to point to the correct quadrant on the 640x480 output image. Then
copy_image(), copy_image.c, is called, performing a direct copy of the scaled input image into
the lower right quadrant of the output.

Next we will set the out_ptr to point to the upper right quadrant of the output image and call
conv3x3_image() in conv3x3_image.c. As with pre_scale_image(), the _image indicates this is
only the wrapper function for the ImageLIB (library functions) component, conv3x3(). As
before, we must setup our input and output streams. This time, however, data will be read from
the external memory (where we have the pre-scaled image) and into internal memory for
processing, and then be written to the output image. Iterating over each row, we compute one
line of data by calling the component function conv3x3() in conv3x3.c.

In conv3x3(), you will see that we perform a 3x3 block convolution, computing one line of data
with the low pass filter mask. Note here that the variables IN1[i], IN2[i], and IN3[i] all grab only
one pixel at a time. This is in contrast to the operation of pre_scale() where the variable in_ptr[i]
grabbed 4 pixels at a time. This is because in_ptr was of type unsigned int, which implies that it
points to four bytes (the size of an unsigned int is 4 bytes) of data at a time. IN1, IN2, and IN3
are all of type unsigned char, which implies they point to a single byte of data. In block
convolution, we are computing the value of one pixel by placing weights on a 3x3 block of
pixels in the input image and computing the sum. What happens when we are trying to compute
the rightmost pixel in a row? The computation is now bogus. That is why the wrapper function
copies the last good column of data into the two rightmost columns. You should also note that
the component function ensures output pixels will lie between 0 and 255. For the same reason we
provided the two extra "copied" lines when performing the prescale.

Back in img_proc.c, we can begin the edge detection algorithm, sobel_image(), for the lower left
quadrant of the output image. This wrapper function, located in sobel_image.c, performs edge
detection by utilizing the assembly written component function sobel() in sobel.asm. The
wrapper function is very similar to the others you have seen and should be straightforward to
understand. Understanding the assembly file is considerably more difficult since you are not
familiar with the assembly language for the c6711 DSP. As you'll see in the assembly file, the
comments are very helpful since an "equivalent" C program is given there.

The Sobel algorithm convolves two masks with a 3x3 block of data and sums the results to
produce a single pixel of output. One mask has a preference for vertical edges while the other
mask for horizontal ones. This algorithm approximates a 3x3 nonlinear edge enhancement
operator. The brightest edges in the result represent a rapid transition (well-defined features), and
darker edges represent smoother transitions (blurred or blended features)

8.3.2: Video Conferencing

A videoconference or video conference (also known as a video teleconference) is a set of
interactive telecommunication technologies which allow two or more locations to interact via
two-way video and audio transmissions simultaneously. It has also been called 'visual
collaboration' and is a type of groupware.

History
Videoconferencing differs from videophone calls in that it's designed to serve a conference rather
than individuals. It is an intermediate form of video telephony, first deployed commercially
by AT&T during the early 1970s using their Picture phone technology.

Videoconferencing uses telecommunications of audio and video to bring people at different sites
together for a meeting. This can be as simple as a conversation between two people in private
offices (point-to-point) or involve several sites (multi-point) with more than one person in large
rooms at different sites. Besides the audio and visual transmission of meeting activities,
videoconferencing can be used to share documents, computer-displayed information, and
whiteboards.

Simple analog videoconferences could be established as early as the invention of the television.
Such videoconferencing systems usually consisted of two closed-circuit television systems
connected via coax cable or radio. An example of that was the German Reich Postzentralamt
(Post Office) network set up in Berlin and several other cities from 1936 to 1940.

During the first manned space flights, NASA used two radiofrequency (UHF or VHF) links, one
in each direction. TV channels routinely use this kind of videoconferencing when reporting from
distant locations, for instance. Then mobile links to satellites using specially equipped trucks
became rather common.

This technique was very expensive, though, and could not be used for applications such
as telemedicine, distance education, and business meetings. Attempts at using
normal telephony networks to transmit slow-scan video, such as the first systems developed
by AT&T, failed mostly due to the poor picture quality and the lack of efficient
video compression techniques. The greater 1 MHz bandwidth and 6 Mbit/s bit rate of Picture
phone in the 1970s also did not cause the service to prosper.

It was only in the 1980s that digital telephony transmission networks became possible, such
as ISDN, assuring a minimum bit rate (usually 128 kilobits/s) for compressed video and audio
transmission. During this time, there was also research into other forms of digital video and
audio communication. Many of these technologies, such as the Media space, are not as widely
used today as videoconferencing but were still an important area of research. The first dedicated
systems started to appear in the market as ISDN networks were expanding throughout the world.
One of the first commercial Videoconferencing systems sold to companies came from PictureTel
Corp. who had an Initial Public Offering in November, 1984. Videoconferencing systems
throughout the 1990s rapidly evolved from very expensive proprietary equipment, software and
network requirements to standards based technology that is readily available to the general
public at a reasonable cost.

Finally, in the 1990s, IP (Internet Protocol) based videoconferencing became possible, and more
efficient video compression technologies were developed, permitting desktop, or personal
computer (PC)-based videoconferencing. In 1992 CU-SeeMe was developed at Cornell by Tim
Dorcey et al. In 1995 the First public videoconference and peacecast between the continents of
North America and Africa took place, linking a technofair in San Francisco with a techno-rave
and cyberdeli in Cape Town. At the Winter Olympics opening ceremony in Nagano, Japan, Seiji
Ozawa conducted the Ode to Joy from Beethoven's Ninth Symphony simultaneously across five
continents in near-real time.

While videoconferencing technology was initially used primarily within internal corporate
communication networks, one of the first community service usages of the technology started in
1992 through a unique partnership with PictureTel and IBM Corporations which at the time were
promoting a jointly developed desktop based videoconferencing product known as the PCS/1.
Over the next 15 years,Project DIANE (Diversified Information and Assistance Network) grew
to utilize a variety of videoconferencing platforms to create a multistate cooperative public
service and distance education network consisting of several hundred schools, neighborhood
centers, libraries, science museums, zoos and parks, public assistance centers, and other
community oriented organizations.

In the 2000s, videotelephony was popularized via free Internet services such as Skype and iChat,
web plugins and on-line telecommunication programs which promoted low cost, albeit low-
quality, videoconferencing to virtually every location with an Internet connection.

In May 2005, the first high definition video conferencing systems, produced by LifeSize
Communications, were displayed at the Interop trade show in Las Vegas, Nevada, able to
provide 30 frames per second at a 1280 by 720 display resolution. Polycom introduced its first
high definition video conferencing system to the market in
2006. Currently, high definition resolution has now become
a standard feature, with most major suppliers in the
videoconferencing market offering it.

Technology

The core technology used in a videoconferencing system is

digital compression of audio and video streams in real time.
The hardware or software that performs compression is
called a codec (coder/decoder). Compression rates of up to 1:500 can be achieved. The resulting
digital stream of 1s and 0s is subdivided into labeled packets, which are then transmitted through
a digital network of some kind (usually ISDN or IP). The use of audio modems in the
transmission line allow for the use of POTS, or the Plain Old Telephone System, in some low-
speed applications, such as video telephony, because they convert the digital pulses to/from
analog waves in the audio spectrum range.

The other components required for a videoconferencing system include:

Video input : video camera or webcam

Video output: computer monitor , television or projector

Audio input: microphones, CD/DVD player, cassette player, or any other source of PreAmp
audio outlet.

Audio output: usually loudspeakers associated with the display device or telephone

Data transfer: analog or digital telephone network, LAN or Internet

Computer: a data processing unit that ties together the other components, does the
compressing and decompressing, and initiates and maintains the data linkage via the network.

There are basically two kinds of videoconferencing systems:

1. Dedicated systems have all required components packaged into a single piece of
equipment, usually a console with a high quality remote controlledvideo camera. These
cameras can be controlled at a distance to pan left and right, tilt up and down, and zoom.
They became known as PTZ cameras. The console contains all electrical interfaces, the
control computer, and the software or hardware-based codec. Omnidirectional
microphones are connected to the console, as well as a TV monitor with loudspeakers
and/or a video projector. There are several types of dedicated videoconferencing devices:

1. Large group videoconferencing is non-portable, large, more expensive devices

used for large rooms and auditoriums.
2. Small group videoconferencing is non-portable or portable, smaller, less
expensive devices used for small meeting rooms.
3. Individual videoconferencing are usually portable devices, meant for single users,
have fixed cameras, microphones and loudspeakers integrated into the console.

2. Desktop systems are add-ons (hardware boards, usually) to normal PCs, transforming
them into videoconferencing devices. A range of different cameras and microphones can
be used with the board, which contains the necessary codec and transmission interfaces.
Most of the desktops systems work with the H.323 standard. Videoconferences carried
out via dispersed PCs are also known as e-meetings.

Conferencing layers
The components within a Conferencing System can be divided up into several different layers:
User Interface, Conference Control, Control or Signal Plane and Media Plane.
Video Conferencing User Interfaces could either be graphical or voice responsive. Many of us
have encountered both types of interfaces; normally we encounter graphical interfaces on the
computer or television, and Voice Responsive we normally get on the phone, where we are told
to select a number of choices by either saying it or pressing a number. User interfaces for
conferencing have a number of different uses; it could be used for scheduling, setup, and making
the call. Through the User Interface the administrator is able to control the other three layers of
the system.

Conference Control performs resource allocation, management and routing. This layer along
with the User Interface creates meetings (scheduled or unscheduled) or adds and removes
participants from a conference.

Control (Signaling) Plane contains the stacks that signal different endpoints to create a call
and/or a conference. Signals can be, but aren’t limited to, H.323 and Session Initiation Protocol
(SIP) Protocols. These signals control incoming and outgoing connections as well as session
parameters.

The Media Plane controls the audio and video mixing and streaming. This layer manages Real-
Time Transport Protocols, User Datagram Packets (UDP) and Real-Time Transport Control
Protocols (RTCP). The RTP and UDP normally carry information such the payload type which is
the type of codec, frame rate, video size and many others. RTCP on the other hand acts as a
quality control Protocol for detecting errors during streaming.

Multipoint videoconferencing
Simultaneous videoconferencing among three or more remote points is possible by means of
a Multipoint Control Unit (MCU). This is a bridge that interconnects calls from several sources
(in a similar way to the audio conference call). All parties call the MCU unit, or the MCU unit
can also call the parties which are going to participate, in sequence. There are MCU bridges for
IP and ISDN-based videoconferencing. There are MCUs which are pure software, and others
which are a combination of hardware and software. An MCU is characterised according to the
number of simultaneous calls it can handle, its ability to conduct transposing of data rates and
protocols, and features such as Continuous Presence, in which multiple parties can be seen on-
screen at once. MCUs can be stand-alone hardware devices, or they can be embedded into
dedicated videoconferencing units.

The MCU consists of two logical components:

1. A single multipoint controller (MC), and

2. Multipoint Processors (MP), sometimes referred to as the mixer.

The MC controls the conferencing while it is active on the signaling plane, which is simply
where the system manages conferencing creation, endpoint signaling and in-conferencing
controls. This component negotiates parameters with every endpoint in the network and controls
conferencing resources While the MC controls resources and signaling negotiations, the MP
operates on the media plane and receives media from each endpoint. The MP generates output
streams from each endpoint and redirects the information to other endpoints in the conference.
Some systems are capable of multipoint conferencing with no MCU, stand-alone, embedded or
otherwise. These use a standards-based H.323 technique known as "decentralized multipoint",
where each station in a multipoint call exchanges video and audio directly with the other stations
with no central "manager" or other bottleneck. The advantages of this technique are that the
video and audio will generally be of higher quality because they don't have to be relayed through
a central point. Also, users can make ad-hoc multipoint calls without any concern for the
availability or control of an MCU. This added convenience and quality comes at the expense of
some increased network bandwidth, because every station must transmit to every other station
directly.

Videoconferencing modes
Videoconferencing systems have several common operating modes that are used:

1. Voice-Activated Switch (VAS);

2. Continuous Presence.

In VAS mode, the MCU switches which endpoint can be seen by the other endpoints by the
levels of one’s voice. If there are four people in a conference, the only one that will be seen in
the conference is the site which is talking; the location with the loudest voice will be seen by the
other participants.

Continuous Presence mode display multiple participants at the same time. The MP in this mode
puts together the streams from the different endpoints and puts them all together into a single
video image. In this mode, the MCU normally sends the same type of images to all participants.
Typically these types of images are called “layouts” and can vary depending on the number of
participants in a conference.

Echo cancellation
A fundamental feature of professional videoconferencing systems is Acoustic Echo
Cancellation (AEC). Echo can be defined as the reflected source wave interference with new
wave created by source. AEC is an algorithm which is able to detect when sounds or utterances
reenter the audio input of the videoconferencing codec, which came from the audio output of the
same system, after some time delay. If unchecked, this can lead to several problems including:

1. the remote party hearing their own voice coming back at them (usually significantly
delayed)
2. strong reverberation, rendering the voice channel useless as it becomes hard to
understand and
3. Howling created by feedback. Echo cancellation is a processor-intensive task that usually
works over a narrow range of sound delays.

Desktop Video Conferencing

In the last few years, desktop video conferencing emerged as part of daily processes and
communication routines within companies and organizations of any size and industry, all over
the world, complementing (and in some cases replacing) traditional room systems.
Gartner says that more than 200 million workers worldwide will run corporate-supplied video
conferencing from their desktops by 2015, compared to 7 million in 2008.

Desktop video conferencing can be defined as the use of video conferencing software on a
personal computer, or more generally without the need of additional dedicated equipment. It
contrasts with "room video conferencing" where participants have to move to a dedicated
conference room equipped for video conference.

In the last few years, desktop video conferencing emerged as part of daily processes and
communication routines within companies and organizations of any size and industry, all over
the world, complementing (and in some cases replacing) traditional room systems.

Gartner says that more than 200 million workers worldwide will run corporate-supplied video
conferencing from their desktops by 2015, compared to 7 million in 2008. Spending on
corporate-sanctioned video conferencing to the desktop will grow from 13.9% of IT budgets, to
account for one-third of corporate spending on video conferencing

This white paper analyzes the latest trends in desktop video conferencing, highlighting the best
practices for its deployment. The primary focus will be on Enterprises bearing anyway in mind
that all the features/benefits described can be adapted to any specific need of other scenarios
such as Education and Tele health environments

Scenario and benefits

Even if the need to reduce cost and increase productivity strengthened by the economic downturn
pushed companies towards more affordable video communication solutions, the growth of
desktop video conference has been mainly driven by other factors. On one side, the
transformation of workspaces due to the rise of mobile and remote workers combined with the
comfort of having video conference software directly on your laptop, and on the other side the
dramatic improvements in video and audio quality that enable an amazing experience quality.

Though enrichment of user experience impacted other video communication solutions, such as
telepresence, desktop video conferencing provides unique benefits in terms of:

• Flexibility
• Cost effectiveness
• Scalability and manageability

Desktop video enables people to meet on the fly, collaborate when they need, fasten decision
making and increase business agility without need to schedule resources or require IT support,
while centralized management and deployment allow IT Managers to maintain control over their
infrastructure.

Driving a successful deployment

As desktop video conferencing offers grows, it becomes essential to focus on what makes it an
high-value choice and key asset for the company. This chapter describes some important
elements that need to be taken into account when planning a desktop video conferencing
service.

Making the most out of existing infrastructure New generation solutions should be designed to
integrate with existing infrastructure, which means they should interoperate with any standard
based device (H.323 or SIP), be available for multiple platforms (PC or Mac OS X) and being
able to integrate with existing company directories (eg: LDAP).

Solve Network Related Issues

The need of connecting with mobile workers, customers and partners that is outside company
network makes essential the ability to solve Firewall/NAT traversal issues. Another key factor,
with the increased number of people given the opportunity to use Full-HD video conferencing
inside the organization, is bandwidth shaping, supported by the ability to automatically adapt to
changing network condition.

Manage and Scale -Depending on company structure and number of users, different needs arise
in terms of manageability. Key aspects include centralized management, a suitable licensing
model, tracking and reporting.

End user adoption

What employees want is to collaborate with their colleagues whenever they need to. On the other
hand many of them might be skeptical about video conferencing thinking of it as it was years
ago: working one time out of three, requiring IT support and providing rough audio and video
quality. In order to increase employee adoption and justify the investment in a new solution, IT
managers should offer their colleagues an easy to use software solution with collaboration,
multi-party conferencing and session recording features.

Architecture description
This paragraph describes the essential buildingblocks for the proposed architecture.

Architecture description
This paragraph describes the essential buildingblocks for the proposed architecture. Centralized
provisioning and management This is the core of the architecture. Here IT Administrators are
able to centrally manage all aspects of the solution.

Firewall/NAT Traversal solution

Provides seamless connectivity amongst users inside and outside of company LAN.

SIP-H.323 Gateway

Most of the deployed rooms systems worldwide are based on the older H.323 protocol, while the
newer SIP protocol is gaining momentum. It is fundamental being able to communicate
withboth protocols.

MCU (Multipoint Control Unit)

An MCU is needed to connect three or more participants in the same conference.

Video IVRA video IVR unit greatly simplifies the user experience, as acting as a centralized
guided directory can help connecting to other users by means of simple numeric extensions.

Software client

Installed on PCs, MACs and mobile devices provides a consistent video communication
experience across different devices.

Implementation

In this final chapter we describe how the proposed architecture can be easily implemented
with Mirial ClearSea.

Mirial Clear Sea

Mirial Clear Sea, built by Mirial on over 10 years of desktop video conferencing excellence,
embeds in a single box all elements described above.
Based on a client/server architecture, Clear Sea includes both a state-of-the-art PC and Mac HD
software client, and a server component providing centralized provisioning and management,
available as physical appliance or as a Virtual Appliance (VMware based).Thanks to Clear Sea,
desktop users inside or outside the company LAN can easily place video calls to each other or to
any standards-based H.323 or SIP room system or equipment, without the need of any additional
gateway or custom configurations. The same goes for any standard equipment, that is able to
connect to any desktop user directly or with the help of the Clear Sea embedded video
IVR.Besides supporting natively both SIP and H.323 protocols, Clear Sea acts as an IP gateway
and thus is able to solve firewall/NAT traversal issues for any device. ClearSea provides
multiconferencingcapabilities, and is able to leverage on the internal centralized directory or to
connect to an external LDAP directory.

Problems
Some observers argue that three outstanding issues have prevented videoconferencing from
becoming a standard form of communication, despite the ubiquity of videoconferencing-capable
systems. These issues are:

1. Eye Contact: Eye contact plays a large role in conversational turn-taking, perceived
attention and intent, and other aspects of group communication. While traditional
telephone conversations give no eye contact cues, many videoconferencing systems are
arguably worse in that they provide an incorrect impression that the remote interlocutor
is avoiding eye contact. Some telepresence systems have cameras located in the screens
that reduce the amount of parallax observed by the users. This issue is also being
addressed through research that generates a synthetic image with eye contact using stereo
reconstruction.

Telcordia Technologies, formerly Bell Communications Research, owns a patent for eye-
to-eye videoconferencing using rear projection screens with the video camera behind it,
evolved from a 1960s U.S. military system that provided videoconferencing services
between the White House and various other government and military facilities. This
technique eliminates the need for special cameras or image processing

2. Appearance Consciousness: A second psychological problem with videoconferencing is

being on camera, with the video stream possibly even being recorded. The burden of
presenting an acceptable on-screen appearance is not present in audio-only
communication. Early studies by Alphonse Chapanis found that the addition of video
actually impaired communication, possibly because of the consciousness of being on
camera.

3. Signal latency: The information transport of digital signals in many steps needs time. In
a telecommunicated conversation, an increased latency larger than about 150–300 ms
becomes noticeable and is soon observed as unnatural and distracting. Therefore, next to
a stable large bandwidth, a small total round-trip time is another major technical
requirement for the communication channel for interactive videoconferencing.
The issue of eye-contact may be solved with advancing technology, and presumably the issue of
appearance consciousness will fade as people become accustomed to videoconferencing.

Present day usage

Using such video equipment in the present day, the deaf, hard-of-
hearing and speech-impaired can communicate between themselves
and with hearing individuals using sign language. The United States
and several other countries compensate companies to provide 'Video
Relay Services' (VRS). Telecommunication equipment can be used to
talk to others via a sign language interpreter, who uses a conventional
telephone at the same time to communicate with the deaf person's
party. Video equipment is also used to do on-site sign language
translation via Video Remote Interpreting (VRI). The relative low
cost and widespread availability of 3G mobile phone technology with
video calling capabilities have given deaf and speech-impaired users a greater ability to
communicate with the same ease as others. Some wireless operators have even started free sign
language gateways.

Sign language interpretation services via VRS or by VRI are useful in the present-day where one
of the parties is deaf, hard-of-hearing or speech-impaired (mute). In such cases the interpretation
flow is normally within the same principal language, such as French Sign Language (LSF) to
spoken French,Spanish Sign Language (LSE) to spoken Spanish, British Sign Language (BSL)
to spoken English, and American Sign Language (ASL) also to spoken English (since BSL and
ASL are completely distinct), and so on.

Multilingual sign language interpreters, who can also

translate as well across principal languages (such as to
and from SSL, to and from spoken English), are also
available, albeit less frequently. Such activities
involve considerable effort on the part of the
translator, since sign languages are distinct natural
languages with their
own construction, semantics and syntax, different
from the aural version of the same principal language.

With video interpreting, sign language interpreters work

remotely with live video and audio feeds, so that the
interpreter can see the deaf or mute party, and converse with
the hearing party, and vice versa. Much like telephone
interpreting, video interpreting can be used for situations in
which no on-site interpreters are available. However, video
interpreting cannot be used for situations in which all
parties are speaking via telephone alone. VRI and VRS interpretation requires all parties to have
the necessary equipment. Some advanced equipment enables interpreters to control the video
camera remotely, in order to zooming and out or to point the camera toward the party that is
signing.

Impact on education

Videoconferencing provides students with the

opportunity to learn by participating in two-
way communication forums. Furthermore,
teachers and lecturers worldwide can be
brought to remote or otherwise isolated
educational facilities. Students from diverse
communities and backgrounds can come
together to learn about one another,
although language barriers will continue to
persist. Such students are able to explore,
communicate, analyze and share information
and ideas with one another. Through videoconferencing students can visit other parts of the
world to speak with their peers, and visit museums and educational facilities. Such virtual field
trips can provide enriched learning opportunities to students, especially those in geographically
isolated locations, and to the economically disadvantaged. Small schools can use these
technologies to pool resources and provide courses, such as in foreign languages, which could
not otherwise be offered.

A few examples of benefits that videoconferencing can provide in campus environments include:

faculty members keeping in touch with classes while attending conferences;

guest lecturers brought in classes from other institutions;

researchers collaborating with colleagues at other institutions on a regular basis without loss
of time due to travel;

schools with multiple campuses collaborating and sharing professors;

faculty members participating in thesis defenses at other institutions;

administrators on tight schedules collaborating on budget preparation from different parts of
campus;

faculty committee auditioning scholarship candidates;

researchers answering questions about grant proposals from agencies or review committees;

student interviews with an employers in other cities, and

Tele seminars.

Impact on medicine and health

Videoconferencing is a highly useful technology for real-
time telemedicine and telenursing applications, such as diagnosis, consulting, transmission
of medical images, etc... With videoconferencing, patients may
contact nurses and physicians in emergency or routine situations; physicians and
other paramedical professionals can discuss cases across large distances. Rural areas can use this
 technology for diagnostic purposes, thus saving lives and
making more efficient use of health care money.

For example, a rural medical center in Ohio, United States,

used videoconferencing to successfully cut the number of
transfers of sick infants to a hospital 70 miles (110 km) away.
This had previously cost nearly $10,000 per transfer.

Special peripherals such as microscopes fitted with digital cameras, video endoscopes, medical
ultrasound imaging devices, otoscopes, etc., can be used in conjunction with videoconferencing
equipment to transmit data about a patient.

TELEMEDICINE

Telemedicine is a rapidly developing application of clinical medicine where medical

information is transferred through interactive audiovisual media for the purpose of consulting,
and sometimes remote medical procedures or examinations.

Telemedicine may be as simple as two health

professionals discussing a case over the
telephone, or as complex as using satellite
technology and videoconferencing equipment to
conduct a real-time consultation between medical
specialists in two different countries.
Telemedicine generally refers to the use
of communications and information
technologies for the delivery of clinical care.

Care at a distance (also called in absentia care),

an old practice which was often conducted via
post. There has been a long and successful history
of in absentia health care which, thanks to modern
communication technology, has evolved into what
we know as modern telemedicine.
In its early manifestations, African villagers used smoke signals to warn people to stay away
from the village in case of serious disease. In the early 1900s, people living in remote areas
of Australia used two-way radios, powered by a dynamo driven by a set of bicycle pedals, to
communicate with the Royal Flying Doctor Service of Australia.

The terms eHealth and telehealth are at times incorrectly interchanged with telemedicine. Like
the terms "medicine" and "health care", telemedicine often refers only to the provision of clinical
services while the term telehealth can refer to clinical and non-clinical services such as medical
education, administration, and research. The term eHealth is often, particularly in the U.K. and
Europe, used as an umbrella term that includes telehealth, electronic medical records, and other
components of health IT.
Types of telemedicine

Telemedicine can be broken into three main categories: store-and-forward, remote

monitoring and interactive services.

Store-and-forward telemedicine involves acquiring medical data (like medical

images, biosignals etc) and then transmitting this data to a doctor or medical specialist at a
convenient time for assessment offline. It does not require the presence of both parties at the
same time. Dermatology (cf: teledermatology), radiology, and pathology are common specialties
that are conducive to asynchronous telemedicine. A properly structured medical
record preferably in electronic form should be a component of this transfer. A key difference
between traditional in-person patient meetings and telemedicine encounters is the omission of an
actual physical examination and history. The 'store-and-forward' process requires the clinician to
rely on a history report and audio/video information in lieu of a physical examination.

Remote monitoring, also known as self-monitoring or testing, enables medical professionals to

monitor a patient remotely using various technological devices. This method is primarily used
for managing chronic diseases or specific conditions, such as heart disease, diabetes mellitus, or
asthma. These services can provide comparable health outcomes to traditional in-person patient
encounters, supply greater satisfaction to patients, and may be cost-effective.

Interactive telemedicine services provide real-time interactions between patient and provider, to
include phone conversations, online communication and home visits. Many activities such as
history review, physical examination, psychiatric evaluations and ophthalmology assessments
can be conducted comparably to those done in traditional face-to-face visits. In addition,
“clinician-interactive” telemedicine services may be less costly than in-person clinical visit
Emergencies Telemedicine

The most common Emergency Telemand current daily Telemedecine is done by SAMU's
Regulator Physician in the word like in France ,Spain, Chile, Brazil. Onboard aircraft or
maritime emergency telemedecine is also current in Paris Lisbon Toulouse Samus.

Benefits and uses

Telemedicine can be extremely beneficial for people living in isolated communities and remote
regions and is currently being applied in virtually all medical domains. Patients who live in such
areas can be seen by a doctor or specialist, who can provide an accurate and complete
examination, while the patient may not have to travel or wait the normal distances or times like
those from conventional hospital or GP visits.

Specialties that use telemedicine often use a 'tele-' prefix; for example, telemedicine as applied
by radiologists is called 'teleradiology'. Similarly telemedicine as applied by cardiologists is
termed as 'telecardiology', etc...

Telemedicine is also useful as a communication tool between a general practitioner and a

specialist available at a remote location. Telemedicine can be used as a teaching tool, by which
experienced medical staff can observe, show and instruct medical staff in another location, more
effective or faster examination techniques. It improved access to healthcare for patients in remote
locations. "Telemedicine has been shown to reduce the cost of healthcare and increase efficiency
through better management of chronic diseases,shared health professional staffing, reduced
travel times, and fewer or shorter hospital stays." Several studies have documented increase
patient satisfaction of telemedicine over past fifteen years.

The first interactive telemedicine system, operating over standard telephone lines, for remotely
diagnosing and treating patients requiring cardiac resuscitation (defibrillation) was developed
and marketed by MedPhone Corporation Telemonitoring is a medical practice that involves
remotely monitoring patients who are not at the same location as the health care provider. In
general, a patient will have a number of monitoring devices at home, and the results of these
devices will be transmitted via telephone to the health care provider. Telemonitoring is a
convenient way for patients to avoid travel and to perform some of the more basic work of
healthcare for themselves.

In addition to objective technological monitoring, most telemonitoring programs include

subjective questioning regarding the patient's health and comfort. This questioning can take place
automatically over the phone, or telemonitoring software can help keep the patient in touch with
the health care provider. The provider can then make decisions about the patient's treatment
based on a combination of subjective and objective information similar to what would be
revealed during an on-site appointment.

Some of the more common things that telemonitoring devices keep track of include blood
pressure, heart rate, weight, blood glucose, and hemoglobin. Telemonitoring is capable of
providing information about any vital signs, as long as the patient has the necessary monitoring
equipment at his or her location. Depending on the severity of the patient's condition, the
provider may check these statistics on a daily or weekly basis to determine the best course of
treatment.

Cardiac MonitorRemote Patient MonitoringVital Signs MonitorTelemedicine SystemPortable

Heart MonitorHolter MonitorPortable Ekg Monitor in 1989 under the leadership of its president
and founder, S.Eric Wachtel. A year later the company introduced a mobile cellular version, the
MDphone. Twelve hospitals in the U.S. served as receiving and treatment centers.

The first Ayurvedic telemedicine center was established in India in 2007 by Partap Chauhan, a
well-known Indian Ayurvedic doctor.

Monitoring a patient at home using known devices like blood pressure monitors and transferring
the information to a caregiver is a fast growing emerging service. These remote monitoring
solutions have a focus on current high morbidity chronic diseases and are mainly deployed for
the First World. In developing countries a new way of practicing telemedicine is emerging better
known as Primary Remote Diagnostic Visits, whereby a doctor uses devices to remotely examine
and treat a patient. This new technology and principle of practicing medicine holds significant
promise of improving on major health care delivery problems, in for instance, Southern Africa,
because Primary Remote Diagnostic Consultations not only monitors an already diagnosed
chronic disease, but has the promise to diagnose and manage the diseases a patient will typically
visit a general practitioner for.

Telecardiology
ECGs, or electrocardiographs, can be transmitted using telephone and wireless. Willem
Einthoven, the inventor of the ECG, actually did tests with transmission of ECG via telephone
lines. This was because the hospital did not allow him to move patients outside the hospital to his
laboratory for testing of his new device. In 1906 Einthoven came up with a way to transmit the
data from the hospital directly to his lab.

Teletransmission of ECG using indigenous methods. One of the oldest known telecardiology
system (teletransmission of ECG) was established in Gwalior, India in 1975 at GR Medical
college by Dr. Ajai Shanker, Dr. S. Makhija, P.K. Mantri using indegenous technique for the first
time in India.

This system enabled wireless transmission of ECG from the moving ICU van or the patients
home to the central station in ICU of the department of Medicine. Transmission using wireless
was done using frequency modulation which eliminated noise. Transmission was also done
through telephone lines. The ECG output was connected to the telephone input using a
modulator which converted ECG into high frequency sound. At the other end a demodulator
reconverted the sound into ECG with a good gain accuracy. The ECG was converted to sound
waves with a frequency varying from 500 Hz to 2500 Hz with 1500 Hz at baseline.

This system was also used to monitor patients with pacemakers in remote areas. The central
control unit at the ICU was able to correctly interpret arrhythmia. This technique helped medical
aid reach in remote areas.

In addition, Electronic stethoscopes can be used as recording devices, which is helpful for
purposes of telecardiology.

In Pakistan three pilot projects in telemedicine was initiated by the Ministry of IT & Telecom,
Government of Pakistan (MoIT) through Electronic Government Directorate in collaboration
with Oratier Technologies (a pioneer company within Pakistan dealing with healthcare and
HMIS) and PakDataCom (a bandwidth provider). Three hub stations through were linked with
Pak Sat-I (Satellite Network) and four districts were linked with another hub. A 312 Kb link was
also established with remote sites and 1 Mbps bandwidth was provided at each hub. Three Hubs,
i.e. Mayo Hospital (the largest hospital in Asia), JPMC Karachi and Holy Family Rawalpindi
were established. These 12 remote sites were connected and on average 1500 dpatient were
being treated per month by a single hub. The project is still running smoothly after two years.

Teleradiology
Teleradiology is the ability to send radiographic images (x-rays, CT, MR, PET/CT, SPECT/CT,
MG, US...) from one location to another. For this process to be implemented, three essential
components are required, an image sending station, a transmission network, and a receiving-
image review station. The most typical implementation are two computers connected via the
Internet. The computer at the receiving end will need to have a high-quality display screen that
has been tested and cleared for clinical purposes. Sometimes the receiving computer will have a
printer so that images can be printed for convenience.

The teleradiology process begins at the image sending station. The radiographic image and a
modem or other connection are required for this first step. The image is scanned and then sent
via the network connection to the receiving computer.

Today's high-speed broadband based Internet enables the use of new technologies for
teleradiology : the image reviewer can now have access to distant servers in order to view an
exam. Therefore, they do not need particular workstations to view the images ; a
standard Personal Computer (PC) and Digital Subscriber Line (DSL) connection is enough to
reach keosys central server. No particular software is necessary on the PC and the images can be
reached from wherever in the world.

Teleradiology is the most popular use for telemedicine and accounts for at least 50% of all
telemedicine usage.

Telepsychiatry

Telepsychiatry, another aspect of telemedicine, also utilizes videoconferencing for patients

residing in underserved areas to access psychiatric services. It offers wide range of services to
the patients and providers, such as consultation between the psychiatrists, educational clinical
program, diagnosis and assessment, medication therapy management, etc.

The following are some of the model programs and projects which are undergoing for
implementation of telepsychiatry in rural areas in the US.

1. University of Colorado Health Sciences Center (UCHSC) supports two programs

for American Indian and Alaskan Native populations
2.
a. The Center for Native American Telehealth and Tele-education (CNATT) and
b. Telemental Health Treatment for American Indian Veterans with Posttraumatic Stress
Disorder (PTSD)

2. Military Psychiatry, Walter Reed Army Medical Center.

Links for several sites related to telemedicine, telepsychiatry policy, guidelines, and
networking are available at the website for the American Psychiatric Association.
Telepharmacy
Telepharmacy is another growing trend for providing pharmaceutical care to the
patients at remote locations where they may not have physical contact with
pharmacists. It encompasses drug therapy monitoring, patient counseling, prior
authorization, refill authorization, monitoring formulary compliance with the aid of
teleconferencing or videoconferencing. In addition, video-conferencing is vastly
 utilized in pharmacy for other purposes, such as providing education, training, and
performing several management functions.

A notable telepharmacy program in the United States conducted at a federally qualified

community health center, Community Health Association of Spokane (CHAS) in
2001, which allowed the low cost medication dispensing under federal government’s
program. This program utilized video telephony for dispensing medication and patient
counseling at six urban and rural clinics. There were one base pharmacy and five
remote clinics in several areas of Spokane, Washington under the telepharmacy
program at CHAS. “The base pharmacy provided traditional pharmacy study to the
clients at Valley clinic and served as the hub pharmacy for the other remote clinics.”

The remote site dispensing and patient education process was described as follows:
once the prescription is sent from the remote clinics to the base pharmacy, the
pharmacist verifies the hard copy and enters the order. The label is also generated
simultaneously, and the label queue is transmitted to the remote site. When the label
queue appears on the medication dispensing cabinet known as ADDS, the authorized
person can access the medicine from ADDS followed by medication barcode scanning,
and the printing and scanning of labels. Once those steps are done, the remote site
personnel are connected to the pharmacist at base pharmacy via videoconferencing for
medication verification and patient counseling.

In recent time, the U.S. Navy Bureau of Medicine took a significant step in advancing
telepharmacy worldwide. The telepharmacy program was piloted in 2006 “in the
regions served by Naval Hospital Pensacola, Florida, and Naval Hospital Bremerton,
Washington.” Starting from March 2010, the Navy expanded its telepharmacy system
to more sites throughout the world. According to Navy Lieutenant Justin Eubanks at
Navy Hospital Pensacola, Florida, telepharmacy would be initiated at more than 100
Navy sites covering four continents by the end of 2010.

Licensing, regulatory issues & telemedicine

Restrictive licensure laws in the United States require a practitioner to obtain a full
license to deliver telemedicine care across state lines. Typically, states with restrictive
licensure laws also have several exceptions (varying from state to state) that may
release an out-of-state practitioner from the additional burden of obtaining such a
license. A number of States require practitioners who seek compensation to frequently
deliver interstate care to acquire a full license. If a practitioner serves several states,
obtaining this license in each state could be an expensive and time-consuming
proposition. Even if the practitioner never practices medicine face-to-face with a
patient in another state, he/she still must meet a variety of other individual state
requirements, including paying substantial licensure fees, passing additional oral and
written examinations, and traveling for interviews. Regulations concerning the practice
of Telemedicine vary from state to state. Physicians who will be prescribing over the
Internet to patients should mandate strict controls on their practice to insure that they
 stay compliant with the various State Medical Board Regulations concerning Internet
Prescribing.

Impact on business
Videoconferencing can enable individuals in distant
locations to participate in meetings on short notice, with
time and money savings. Technology such as VoIP can
be used in conjunction with desktop videoconferencing to
enable low-cost face-to-face business meetings without
leaving the desk, especially for businesses with
widespread offices. The technology is also used for
telecommuting, in which employees work from home.
One research report based on a sampling of 1,800
corporate employees showed that, as of June 2010, 54% of the respondents with access to video
conferencing used it “all of the time” or “frequently”.

Videoconferencing is also currently being introduced on online networking websites, in order to

help businesses form profitable relationships quickly and efficiently without leaving their place
of work. This has been leveraged by banks to connect busy banking professionals with customers
in various locations using video banking technology.

Although videoconferencing has frequently proven its value, research has shown that some non-
managerial employees prefer not to use it due to several factors, including anxiety. Some such
anxieties can be avoided if managers use the technology as part of the normal course of business.
Researchers also find that attendees of business and medical videoconferences must work harder
to interpret information delivered during a conference than they would if they attended face-to-
face. They recommend that those coordinating videoconferences make adjustments to their
conferencing procedures and equipment.

Impact on law
In the United States, videoconferencing has allowed testimony to be used for an individual who
is unable or prefers not to attend the physical legal settings, or would be subjected to severe
psychological stress in doing so, however there is a controversy on the use of testimony by
foreign or unavailable witnesses via video transmission, regarding the violation of
the Confrontation Clause of the Sixth Amendment of the U.S. Constitution.

In a military investigation in State of North Carolina, Afghan witnesses have testified via
videoconferencing.

In Hall County, Georgia, videoconferencing systems are used for initial court appearances. The
systems link jails with court rooms, reducing the expenses and security risks of transporting
prisoners to the courtroom.

The U.S. Social Security Administration (SSA), which oversees the largest administrative
judicial system in the world, under its Office of Disability Adjudication and Review (ODAR) has
made extensive use of video teleconferencing (VTC) to conduct hearings at remote locations. In
FY 2009, SSA conducted 86,320 VTC hearings, a 55% increase over FY 2008. In August 2010,
the SSA opened its fifth and largest video-only National Hearing Center (NHC), in St. Louis,
Missouri. This continues SSA's effort to use video hearings as a means to clear its substantial
hearing backlog. Since 2007, the SSA has also established NHCs in Albuquerque, New Mexico,
Baltimore, Maryland, Falls Church, Virginia, and Chicago, Illinois.

Impact on media relations

The concept of press videoconferencing was developed in October 2007 by the PanAfrican Press
Association (APPA), a Paris France based non-governmental organization, to allow African
journalists to participate in international press conferences on developmental and good
governance issues.
Press videoconferencing permits international press conferences via videoconferencing over the
Internet. Journalists can participate on an international press conference from any location,
without leaving their offices or countries. They need only be seated by a computer connected to
the Internet in order to ask their questions to the speaker.

In 2004, the International Monetary Fund introduced the Online Media Briefing Center, a
password-protected site available only to professional journalists. The site enables the IMF to
present press briefings globally and facilitates direct questions to briefers from the press. The site
has been copied by other international organizations since its inception. More than 4,000
journalists worldwide are currently registered with the IMF.

Video telephony descriptive names & terminology

Videophone calls (also: video calls and video chat), differ from videoconferencing in that they
expect to serve individuals, not groups. However that distinction has becoming increasingly
blurred with technology improvements such as increased bandwidth and sophisticated software
clients that can allow for multiple parties on a call. In general everyday usage the
term videoconferencing is now frequently used instead of videocall for point-to-point calls
between two units. Both videophone calls and videoconferencing are also now commonly
referred to as a video link.

Webcams are popular, relatively low cost devices which can provide live video and audio
streams via personal computers, and can be used with many software clients for both video calls
and videoconferencing.

A videoconference system is generally higher cost than a videophone and deploys greater
capabilities. A videoconference (also known as a videoteleconference) allows two or more
locations to communicate via live, simultaneous two-way video and audio transmissions. This is
often accomplished by the use of a multipoint control unit (a centralized distribution and call
management system) or by a similar non-centralized multipoint capability embedded in each
videoconferencing unit. Again, technology improvements have circumvented traditional
definitions by allowing multiple party videoconferencings via web-based applications. A separate
webpage article is devoted to videoconferencing.
A telepresence system is a high-end videoconferencing system and service usually employed
by enterprise-level corporate offices. Telepresence conference rooms use state-of-the art room
designs, video cameras, displays, sound-systems and processors, coupled with high-to-very-high
capacity bandwidth transmissions.

Typical uses of the various technologies described above include video calling or
videoconferencing on a one-to-one, one-to-many or many-to-many basis for personal, business,
educational, deaf Video Relay Service and tele-medical, diagnostic and rehabilitative use or
services. New services utilizing videocalling and videoconferencing, such as personal videocalls
to inmates incarcerated in penitentiaries, and videoconferencing to resolve airline engineering
issues at maintenance facilities, are being created or evolving on an on-going basis.

8.4. GLOSSARY
This glossary contains definitions for terms used in the Windows Multimedia documentation.
Adaptive Differential Pulse Code Modulation (ADPCM)
An audio-compression technique.
ADPCM
See Adaptive Differential Pulse Code Modulation (ADPCM).
break key
In Media Control Interface (MCI), a keystroke that interrupts a wait operation. By default, MCI
defines this key as CTRL+BREAK. An application can redefine this key using the
MCI_BREAK command message.
CD-ROM extended architecture (CD-XA)
An extension of the CD-ROM standard that provides for storage of compressed audio data along
with other data on a compact disc. This standard also defines the way data is read from a disc.
Audio signals are combined with text and graphic data on a single track so they can be read at
virtually the same time.
channel
A method, provided by Musical Instrument Digital Interface (MIDI), for sending messages to an
individual device within a MIDI setup. There are 16 MIDI channel numbers. Devices in a MIDI
setup can be directed to respond only to messages marked with a channel number specific to the
device.
channel map
A channel map, provided by the MIDI Mapper, that can redirect Musical Instrument Digital
Interface (MIDI) messages from one channel to another. See also MIDI Mapper,Musical
Instrument Digital Interface (MIDI).
chunk
The basic building block of a Resource Interchange File Format (RIFF) file, consisting of an
identifier (called a chunk identifier), a chunk-size variable, and a chunk data area of variable
size.
command message
In Media Control Interface (MCI), a symbolic constant that represents a unique command for an
MCI device. Command messages have associated data structures that provide information a
device requires to carry out a request.
command string
In Media Control Interface (MCI), a null-terminated character string that represents a command
for an MCI device. The text string contains all the information that an MCI device needs to carry
out a request. MCI parses the text string and translates it into an equivalent command message
and data structure that it then sends to an MCI device driver.
compact disc - digital audio (CD-DA)
An optical data-storage format that provides for the storage of up to 73 minutes of high-quality
digital-audio data on a compact disc. Also known as Red Book audio.
compact disc - read-only memory (CD-ROM)
An optical data-storage technology that allows large quantities of data to be stored on a compact
disc.
compound device
A Media Control Interface (MCI) device that requires a device element, usually a data file. An
example of a compound device is the MCI waveform audio driver. See also device element.
control change
See MIDI control-change message.
device element
Data required for operation of Media Control Interface (MCI) compound devices. The device
element is generally an input or output data file.
division type
The technique used to represent the time between Musical Instruments Digital Interface (MIDI)
events in a MIDI sequencer.
file element
A complete file contained in a Resource Interchange File Format (RIFF) compound file.
FM synthesizer
See frequency modulation (FM) synthesizer.
FOURCC (Four-Character Code)
A code used to identify Resource Interchange File Format (RIFF) chunks. A FOURCC is a 32-
bit quantity represented as a sequence of one to four ASCII alphanumeric characters, padded on
the right with blank characters.
frequency modulation (FM) synthesizer
A synthesizer that creates sounds by combining the output of digital oscillators using a frequency
modulation technique.
General MIDI
A synthesizer specification created by the MIDI Manufacturers Association (MMA) defining a
common configuration and set of capabilities for consumer Musical Instrument Digital Interface
(MIDI) synthesizers.
HMS time format
A time format used by Media Control Interface (MCI) to express time in hours, minutes, and
seconds. The HMS time format is used primarily by videodisc devices.
IMA
See Interactive Multimedia Association (IMA) and International MIDI Association (IMA).
Interactive Multimedia Association (IMA)
A professional trade association of companies, institutions, and individuals involved in
producing and using interactive multimedia technology.
International MIDI Association (IMA)
The nonprofit organization that circulates information about the Musical Instrument Digital
Interface (MIDI) specification.
LIST chunk
A Resource Interchange File Format (RIFF) chunk with a chunk identifier of LIST. LIST chunks
contain a series of subchunks.
list type
A four-character code (FOURCC) identifying the type of data contained in a Resource
Interchange File Format (RIFF) chunk with a chunk identifier of LIST. For example, a LIST
chunk with a list type of INFO contains a list of information about a file, such as the creation
date and author.
MCI
See Media Control Interface.
Media Control Interface (MCI)
High-level control software that provides a device-independent interface to multimedia devices
and media files. MCI includes a command-message interface and a command-string interface.
MIDI
See Musical Instrument Digital Interface.
MIDI control-change message
A Musical Instrument Digital Interface (MIDI) message sent to a synthesizer to change different
synthesizer control settings. An example of a control-change message is the volume controller
message, which changes the volume of a specific MIDI channel.
MIDI Manufacturers Association (MMA)
A collective organization composed of Musical Instrument Digital Interface (MIDI) instrument
manufacturers and MIDI software companies. The MMA works with the MIDI Standard
Committee to maintain the MIDI specification.
MIDI Mapper
Windows systems software that modifies Musical Instrument Digital Interface (MIDI) output
messages and redirects them to a MIDI output device using values stored in a MIDI setup map.
The MIDI Mapper can change the destination channel and output device for a message, as well
as modify program-change messages, volume values, and key values.
MIDI mapping
The process of translating and redirecting Musical Instrument Digital Interface (MIDI) messages
according to data defined in a MIDI map setup.
MIDI program-change message
A Musical Instrument Digital Interface (MIDI) message sent to a synthesizer to change the patch
on a specific MIDI channel.
MIDI sequence
Musical Instrument Digital Interface (MIDI) data that can be played by a MIDI sequencer.
MIDI sequencer
A program that creates or plays songs stored as Musical Instrument Digital Interface (MIDI)
files. When a sequencer plays MIDI files, it sends MIDI data from the file to a MIDI synthesizer,
which produces the sounds. Windows provides a MIDI sequencer, accessible through media
control interface (MCI), that plays MIDI files. See also Media Control Interface (MCI).
MIDI setup map
A complete set of data for the Musical Instrument Digital Interface (MIDI) Mapper to use when
redirecting MIDI messages. Only one setup map can be in effect at a given time, but the user can
have several setup maps available and can choose between them by using the MIDI Mapper
Control Panel option.
MMA
See MIDI Manufacturers Association.
MSF time format
A time format used by Media Control Interface (MCI) to express time in minutes, seconds, and
frames. The number of frames in a second depends on the type of device being used; compact
disc audio devices use 75 frames per second. The MSF time format is used primarily by compact
disc audio devices.
Musical Instrument Digital Interface (MIDI)
A standard protocol for communication between musical instruments and computers.
parts per quarter note (PPQN)
A time format used for Musical Instrument Digital Interface (MIDI) sequences. PPQN is the
most common time format used with standard MIDI files.
patch
A particular setup of a Musical Instrument Digital Interface (MIDI) synthesizer that results in a
particular sound, usually a sound simulating a specific musical instrument. Patches are also
called programs. A MIDI program-change message changes the patch setting in a synthesizer.
Patch also refers to the connection or connections between MIDI devices. See also Musical
Instrument Digital Interface (MIDI).
patch caching
A technique that enables some internal Musical Instrument Digital Interface (MIDI) synthesizer
device drivers to preload their patch data, reducing the delay between the moment the
synthesizer receives a MIDI program-change message and the moment it plays a note using the
new patch. Patch caching also ensures that required patches are available (the synthesizer might
load only a subset of its patches). See also Musical Instrument Digital Interface (MIDI), patch.
pitch scale factor
In waveform audio, the amount by which a waveform audio driver scales the pitch. A scale
factor of two results in a one-octave increase in pitch. Pitch scaling requires specialized
hardware. The playback rate and sample rate are not changed.
playback rate scale factor
In waveform audio, the amount by which the waveform audio driver scales the playback rate.
Playback scaling is accomplished through software; the sample rate is not changed, but the driver
interpolates by skipping or synthesizing samples. For example, if the playback rate is changed by
a factor of two, the driver skips every other sample.
polyphony
The maximum number of notes that a Musical Instrument Digital Interface (MIDI) output device
can play simultaneously.
PPQN
See parts per quarter note.
preimaging
The process of building a movie frame in a memory buffer before it is displayed.
Red Book audio
See compact disc - digital audio (CD-DA).
Resource Interchange File Format (RIFF)
A tagged-file specification used to define standard formats for multimedia files. Tagged-file
structure helps prevent compatibility problems that often occur when file-format definitions
change over time. Because each piece of data in the file is identified by a standard header, an
application that does not recognize a given data element can skip over the unknown information.
See also tagged file format.
RIFF
See Resource Interchange File Format (RIFF).
RIFF chunk
A chunk with chunk identifier Resource Interchange File Format (RIFF) that includes an
identifying code and zero or more sub chunks, the contents of which depend on the form type.
RIFF file
A file whose format complies with one of the published Resource Interchange File Format
(RIFF) forms. Examples of RIFF files include WAVE files for waveform audio data, RMID files
for Musical Instrument Digital Interface (MIDI) sequences, and RDIB files for device-
independent bitmaps.
RIFF form
A file-format specification based on the Resource Interchange File Format (RIFF) standard.
sample
A discrete piece of waveform data represented by a single numerical value. Sampling is the
process of converting analog data to digital data by taking samples of the analog waveform at
regular intervals.
sampling rate
The rate at which a waveform audio driver performs audio-to-digital or digital-to-audio
conversion. For compact disc - digital audio (CD-DA), the sampling rate is 44.1 kHz. See
also compact disc - digital audio
sequence
See MIDI sequence.
sequencer
See MIDI sequencer.
simple device
A media control interface (MCI) device that does not require a device element (data file) for
playback. The MCI compact disc audio driver is an example of a simple device.
SMPTE
See Society of Motion Picture and Television Engineers.
SMPTE division type
One of four SMPTE timing formats. SMPTE time is expressed in hours, minutes, seconds, and
frames. The SMPTE division type specifies the frames-per-second value corresponding to a
given SMPTE time. For example, a SMPTE time of one hour, 30 minutes, 24 seconds, and 15
frames is useful only if the frames-per-second value, or SMPTE division type, is known.
SMPTE offset
A Musical Instrument Digital Interface (MIDI) event that designates the SMPTE time at which
playback of a MIDI file is to start. SMPTE offsets are used only with MIDI files using SMPTE
division type.
SMPTE time
A standard representation of time developed for the video and film industries. SMPTE time is
used with Musical Instrument Digital Interface (MIDI) audio because many people use MIDI to
score films and video. SMPTE time is an absolute time format expressed in hours, minutes,
seconds, and frames. Standard SMPTE division types are 24, 25, and 30 frames per second.
Society of Motion Picture and Television Engineers (SMPTE)
An association of engineers involved in movie, television, and video production. SMPTE also
refers to SMPTE time, the timing standard that this group adopted.
square-wave synthesizer
A synthesizer that produces sound by adding square waves of various frequencies. A square
wave is a rectangular waveform.
system-exclusive data
In Musical Instrument Digital Interface (MIDI), messages understood only by MIDI devices
from a specific manufacturer. MIDI device manufacturers can use system-exclusive data to
define custom messages that can be exchanged between their MIDI devices. (The standard MIDI
specification defines only a framework for system-exclusive messages.) See also Musical
Instrument Digital Interface.
tagged file format
A file format in which data is tagged using standard headers that identify information type and
length. See also Resource Interchange File Format (RIFF).
tempo
The speed at which a Musical Instrument Digital Interface (MIDI) file is played. Tempo is
measured in beats per minute (BPM); typical MIDI tempo is 120 BPM. See also Musical
Instrument Digital Interface.
threshold
For the joystick interface, the amount, in device units, that the stick coordinates must change
before the application is notified of the movement. A high threshold reduces the number of
joystick messages sent to an application, but it also reduces the sensitivity of the joystick.
time stamp
A tag that enables a Musical Instrument Digital Interface (MIDI) sequencer to replay recorded
MIDI data at the proper moment. See also Musical Instrument Digital Interface.
TMSF time format
A time format used by Media Control Interface (MCI) to express time in tracks, minutes,
seconds, and frames. The number of frames in a second depends on the type of device being
used; compact disc audio devices use 75 frames per second. The TMSF time format is used
primarily by compact disc audio devices. See also Media Control Interface (MCI).
track
A sequence of sound on a compact disc - digital audio (CD-DA) disc. With a Musical Instrument
Digital Interface (MIDI) file, information can be separated into tracks, defined by the creator of
the file. MIDI file tracks can correspond to MIDI channels, or they can correspond to parts of a
song (such as melody or chorus); a CD-DA track usually corresponds to a song. See
also compact disc - digital audio.
Volume scalar
A component of a Musical Instrument Digital Interface (MIDI) Mapper patch map that adjusts
the volume of a patch on a synthesizer. For example, if the bass patch on a synthesizer is too
loud relative to the piano patch, the volume scalar can reduce the volume for the bass or increase
the volume for the piano. (Applications playing waveform audio can also adjust the output
volume.) See also MIDI Mapper, patch.
WAVE file
A standard file format for storing waveform audio data. WAVE files have a .WAV filename
extension.
Waveform audio
A technique of recreating an audio waveform from digital samples of the waveform.

H.323: an International Telecommunications Union (ITU) standard that provides specification

for audio/video communication over packet based networks.

LDAP (Lightweight Directory Access Protocol):an application protocol used to access a
directory listing. A directory is a set of objects with attributes organized in a logical and
hierarchical manner.

MCU (Multipoint Control Unit): a device used to moderate a video conference of three or more
end points.

SIP (Session Initiation Protocol): signalingprotocol used for establishing sessions in an IP

network.

Video IVR (Interactive Voice Response): an interactive voice response system that includes
video.

Virtual Appliance: a virtual machine image that includes the operating system and the
application design

8.5: SUMMARY
Multimedia is the term used to describe two or more types of media combined into a single
package—usually denoting a combination of some or all of the following: video, sound,
animation, text, and pictures. Multimedia gives the user the opportunity to influence the
presentation of material. The selection and manipulation of various aspects of the presentation
material is the interactive aspect of a multimedia presentation. Interactive features could range
from a question-and-answer function to choosing from a menu of particular subjects or aspects of
a presentation. One application of multimedia, for example, involves presenting the user with a
"what if" scenario, in which the choices the user makes affect the outcome of the presentation.
This affords the user a degree of control, not unlike directinga motion picture and having the
opportunity to make changes to the plot at various junctures.
The advent and ascension of the personal computer as well as the development and proliferation
of CD-ROMs have played significant roles in affording business the ability to affordably create
multimedia computer presentations. Potential uses of multimedia that were previously confined
within the province of computer science experts are now within the reach of a large segment of
the business and public communities. Today a relative neophyte can potentially create a polished
multimedia presentation with a computer and a commercially available presentation program. As
computer-processing power increases and the capacity of data-storage media like the CD-ROM
or DVD-ROM formats continues to grow, the ability of the average user to create multimedia
presentations will grow as well.

The Mechanics of Multimedia

The CD-ROM and its successor, the DVD-ROM, store data in the form of a binary code. The
binary code is placed onto the discs by a stamping process that impresses lands (flat areas that
represent the zero in binary code) and hollows (pits that represent the one in binary code) onto
the surface of the disc. When the discs are placed into a player or computer drive, the playing
mechanism spins the disc and flashes a laser beam over the surface of the disc. The reflected
light patterns caused by the embossed data contained on the surface of the disc are then decoded
by the reader/player and translated back into audio and video. The storage capacity of a CD-
ROM disc is 635 megabytes, while the storage capacity of a DVD-ROM disc can be as great as
5.2 gigabytes. Since sound, graphics, and other visuals take up considerably more data space
than text alone, the increased storage capacities of the CD-ROM and DVD-ROM discs have
played an integral part in making the use of multimedia more commonplace. The durability,
portability, and relatively low manufacturing cost of the discs also play a critical role in their
proliferation. While the Read Only Memory (ROM) format is still the most common for both
CDs and DVDs, today recordable disc drives are widely available to enable users to "burn" data
(write, erase, and/or rewrite data) to a disc on their own.

Uses of Multimedia
Multimedia devices have an almost innumerable variety of applications. They are used in home-
entertainment systems and can be extremely powerful educational tools. Educators, for example,
have been exceptionally creative in combining some of the exciting elements of video-game
applications with select features of educational material. By doing this, the concept of
"edutainment" was created. The goal of using the multimedia edutainment approach is to
entertain the user so effectively that the user remains unaware that he or she is actually learning
in the process.
Multimedia can also offer critical services in the business world. While information can certainly
be conveyed adequately by the singular use of still pictures, video, film, audio, or text,
multimedia potentially multiplies the degree of effectiveness, in no small part due to the added
entertainment value and the extent to which the viewers feel a part of the action. Such benefits
can't easily be matched by the application of a singular medium. The effectiveness of teaching,
selling, informing, entertaining, promoting, and presenting are all dependent upon one factor: the
ability of the presented material to hold the attention of the desired audience. A dynamic
multimedia presentation can usually be more effective than earlier methods at accomplishing this
task with an audience that was raised on television and motion pictures. The computerized
multimedia presentation offers the added benefit of cost-effective flexibility, allowing easy
editing of the basic materials in order to tailor them to specific target audiences.
Training, informational and promotional materials, sales presentations, and point-of-sale displays
that allow for customer interaction and communication both within and outside the organization
are all common applications of multimedia in the business world. Multimedia presentations for
many such applications can be highly portable, particularly in the cases of the CD-ROM, DVD-
ROM, and videotape. The equipment required to produce these presentations is relatively
commonplace or otherwise easy to access.
Perhaps the vanguard application of multimedia is virtual reality, a combination of video, stereo,
and computer graphics that attempts to create an interactive three-dimensional environment that
immerses the user within the simulation. Virtual reality has been employed in a wide range of
practical applications: to train military troops, to streamline manufacturing and architectural
design processes, to create simulated test environments for industry, and as a form of public
entertainment.
One should still keep in mind, however, that even if rendered in a highly advanced multimedia
format, an ineffectual presentation is still an ineffectual presentation. One should remain focused
on the message being conveyed while shaping the choice and use of materials in accordance with
that message.

8.6: CHECK YOUR PROGRESS

1: Explain the use of the following hardware components in multimedia. (i) Scanner (ii) Central
Processing Unit (iii) Soundcard
2: What is the advantage of MIDI over digitized sound?
3: Explain the concept of video on multimedia..

8.7: REFERENCES

1. Digital Distribution – By Ricardo Blanco

2. Key Concept in Micro Soft Technology
3. Video Conferencing - Wikipedia

8.8: ANSWER TO CHECK YOUR PROGRESS

1: Read 8.1-4
2: Read 8.1
3: Read 8.1.

See also

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