E-commerce is defined as buying and selling of goods and services over the electronic systems such as the internet and computer networks. E-commerce can be categorized as follows: E-tailing also known as virtual stores, Business to business buying and selling, electronic data interchange, and e-mail and fax. A new economic ecosystem has been created by the worldwide web, the e-commerce market place. In 2007, the online business retail generated $175 Billion in revenues in the USA (Kroger & Ellis, 2001).With increasingly more than 70% of Americans as frequent internet users, sectors such as the travel services, consumer electronics, e-books, media distribution as well as sports and fitness have witnessed an enormous growth in terms of sales volumes and profitability. Majority of internet users have concerns about privacy and security. All the key players in the online market have either to choose between the closed or the open environment to operate.
Open Environment allows customers to browse and navigate within their sites with ease, without a client logging into the website. This minimizes time on the part of the client and speeds the duration of search. The clients would be free to browse through the web page, look at the catalogue and decide to make purchases (Kroger & Ellis, 2001). Moreover, the cost of implementing of an open environment is relatively low compared to an overly secured environment. An open environment favors the customer who searches for more alternatives or variety of products within a short duration of time. Customers look for Supper Offers, Sales, and Deals from businesses. This encourages a larger online community for customers to share their experiences and referrals.
On the other hand, the open environment is highly susceptible to hacking and hence the security of the information can be breached by transferring it to the third party. Privacy cannot be guaranteed in this environment. Hackers infect customers’ computer programs without compromising the effects (Laudon & Traver, 2011). Moreover, crackers attack computer programs with viruses, thus overwriting programs on clients’ computers. Finally, clients cannot perform secured transaction using this environment. An overly secured environment delivers the greatest security and privacy during transactions such as bill payments, online banking and shopping. It integrates the use of authentication by use of certificate authorities, signatures and digital certificates to protect customers from hacking down the system. Clients can make extremely significant transactions without worrying about the information collected.
However, an overly secured environment requires any customer to log in to conduct any transaction, making it slower in terms of the process involved. Furthermore, it is hugely expensive to implement and maintain the system, since its well integrated with password protectors and firewalls and will require more network engineers (Laudon & Traver, 2011). As much as privacy and security are paramount, customers perceives that giving too much information about them is risky and hence do not visit such sites. Example includes medical history about a person, addiction and private life.
There are various ethical implications of e-commerce, since it is to a new world where the customer anonymity is the priority. This may result in the underage minors consuming drugs and alcohol, an anorexic girl ordering for weight loss pills, or even a school boy ordering Viagra on websites such as EBay and Google trader. Furthermore, information passed to the third parties can be misused by the business, thus breaching customers’ privacy (Laudon & Traver, 2011).
E-commerce has had an enormous effect on the global trade, and also the government through investing in information technology has had an effect on online trade. It is for this reason that the regulation of e-commerce can be enhanced to protect both consumers and the business owners.