E-Commerce E-Business Has Greatly Expanded

e-Commerce

E-business has greatly expanded the capabilities of many organizations. However, as with all new technologies, there are challenges that must be faced in the most productive way. Payment from customers, for example, continues to be a difficult area for e-commerce. When a business launches an online store, it has to decide choose to process the orders itself with a full merchant account, such as Visa or Mastercard, and follow its specific guidelines, or use a third-party processor where the transactions are going through another business' account and abide by all the rules. The latter is used when the full merchant will not sign an agreement because of a high-risk, the type of e-business or credit problems. Online businesses also work with third-party vendors, because it reduces the amount of technical building on the website; a small e-shop may not have the ability to create a complex site. In addition, a third-party merchant is used when an e-commerce website expects a small amount of transactions. However, the e-store pays a monthly payment and an additional charge to the merchant account if it does not meet the minimum amount of transactions. A third-party merchant for payment does not do credit checks. Sites that can do a larger amount of business can sign an agreement with the card, such as Visa, but may be locked into a contract, have high transaction fees, and have greater approval difficulty for charges. Also, the e-business has to make sure that the gateway between its site and the merchant's is compatible. Lastly, overall, merchants say 1.1% of accepted orders are fraudulent.

Millions of consumers are still leary about making payments because of safety. E-businesses report they are losing billions of dollars because people are afraid of using online businesses. E-commerce sites have to ensure the safety of their sites and put in greater authentications.

Purchasing online can also present problems to consumers, especially when there are technical gliches (links do not work) or the design is not user friendly (difficult to search for items, for example). Many sites only include customer service e-mail, not phone numbers, and buyers want to talk to a person when having questions. Sites that are not constructed properly make it difficult for the customer to get accurate ordering information, see large enough photos of the products (or any photographs), and find product costs. Shipping costs can add significant costs that consumers do not want to pay.

B2B electronic transactions have saved companies significant amounts of money over the traditional manual approach. Yet there are wrinkles with this as well. For example, it is problematic for manufacturers to introduce new products or have promotions -- variability in electronic chain management is difficult. Depending on the system, it can be difficult to track down the status of a product order. Sometimes it is problematic to cancel an order once it is in the electronic process. Also, when ordering large quantities of a product or when unsure exactly what is needed, customers still want to talk to a "live" person rather than order electronically. Further, when the system goes down, problems occur on both sides.