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E-Commerce and E-Business

commerce. However, installing and maintaining private networks was very expensive. With the advent
of Internet, e-commerce spread rapidly because of the reasonable costs.

E-Commerce Security Environment
Ensuring security of payments and privacy of online transactions is the most vital aspect of e-
commerce. While the appropriate policies are in place to facilitate e-commerce, lack of trust is still a
barrier for using the Internet to make online transactions. Moreover, credit card usage in many
developing countries is still relatively low. Individuals and firms rarely engage in extensive e-commerce
or use of Internet-based technologies because of the following reasons:

1. Tax evasion
2. Privacy and anonymity
3. Fraud adjudication
4. Legal liability on credit cards
3.1.1 Internet Economy Conceptual Framework

The Internet economy is a broader concept and it includes both e-commerce and e-Business. The
Internet economy includes all economic activities using electronic networks as a medium for commerce
or activities that are involved in both, building the networks linked to the Internet and the purchase of
application services. It is made up of three major segments. They are physical infrastructure, business
infrastructure, and commerce.
The Center for Research and Electronic Commerce (CREC) at the University of Texas has developed a
conceptual framework for the Internet economy, which is depicted in table 3.1. The framework shows
four layers of the Internet economy. They are:
1. Internet infrastructure
2. Internet applications infrastructure
3. Internet intermediaries

4. Internet commerce

Table 3.1: Conceptual Framework for The Internet Economy

Internet Layer 1 – Internet Layer 2 – Internet Layer 3 – Internet Layer 4 –
Economy Infrastructure Applications Intermediaries Internet
Layer Infrastructure Commerce
Companies that provide Companies that Companies that link Companies that
enabling hardware, provide software buyers and sellers of sell products or
software, and networking for Web e-commerce and services directly
equipment for World Wide transactions. provide Web content to end users.
Web. and marketplace.
Types of Networking hardware and Internet Market makers, Online tickets,
companies software companies, pc and consultants, Web online travel agents, fee, subscription
server manufacturers, development, online advertisers, based
Internet service providers, Multimedia portal providers. companies.
security vendors and fiber applications
optics makers. providers.
Examples Qwest, AT&T, Cisco Adobe, Microsoft, e-Steel, Yahoo, ZDNet Amazon.com,
IBM, Oracle Dell

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