E-commerce - Research Paper Example

?   Year: BACKGROUND E-commerce as commonly referred to, is the buying of information, products and services over the electronic systems more so through the internet. E-commerce has changed in the way people do trade it helps doing the traditional commerce in a new, faster and efficient way. E-commerce has been there for a long time now since its introduction in the 1970’s a while after the introduction of the internet. Like many other businesses, the e-commerce has undergone certain revolutions, making it more accessible and easier for people around the globe. With the innovations in the finance sector e.g. money transfer, credit cards etc, e-commerce has benefited a lot as it is easy for people to trade without having to move from one location to another. Access to the internet and other avenues that transfer information have been a tremendous boost to e-commerce as people are able to buy and sell products across cities, towns, countries and continents all around the world. E-commerce is mostly preferred by many people than the traditional way of shopping. It is less time consuming so people do not have to travel physically or stand in queues waiting for services. A wide variety of goods offered makes it a vital plus for people as the majority are spoilt of choice over what to buy, compared to the traditional way of moving from one store to the other in search of the unique product. Stiff competition among service provides make it easier for the customer, the quality of goods and services observed, each of the competing companies want to be the leading seller hence they offer the flexible packages to fit the customers need and satisfaction. The availability is also an added advantage for customers the e-stores are open 24 hours a day, all week and one can make their purchase at any time they wish as compared to the traditional routine of business hours. Despite the many advantages that come with e-commerce, there are few challenges that make substantial hitches in trade. Some of the disadvantages of the trade include lack of personal touch of the goods before buying, delay in receiving goods or service after paying for it, low prices for the seller due to the flooded market with the same good. However, the key challenge has been the fraud and general security issues this affects both the buyer and the seller. Businesses run the risk of phishing attacks before they can transact any business. This is costly for them as a business, but it is inevitable to avoid further losses in future. The customer is the most vulnerable to fraud and security risks the common security issue is hacking of their credit card. My paper seeks to explore deeper into these problems (fraud and security), effects on e-commerce, and ways of improving the security of the business to both customers and the sellers. The recommendations to be made can be used by authorities to make changes in the trade for its success in the future. 2. LITERATURE REVIEW 2.1 Introduction Since the introduction of e-commerce fraud and security issues are a serious blow in the business, of all other issues that people around the globe have had to put up with, fraud and security issues have dominated. Discussions have previously been held to try and bring a lasting solution but with little success. Of all cyber crimes in the world, fraud accounts for 3% which is a substantial margin compared to other small offences committed through internet. Garner Group on the other hand estimated that around 1.06% of the total online transactions are fraudulent as compared to the 0.6% (Reynolds 2004). Both statistics above translate to a lot of money loss, which affects clients and sellers of goods or services. Effects and impact of security and fraud in e- commerce are worrying, by year 2003, it was estimated that 1.8 billion dollars would be lost (Debjan 2005). Once one is a victim of security and fraud in e- commerce, majority fear and their perceptions changed. Many fear that they may lose their money again especially if they lost a lot of money previously. Literature review below has the research and view of people who have done research e-commerce in the past. The literature has a lot of information and data regarding the proposal. 1.3 Literature review E-commerce touches many people’s lives around the globe, million e-businesses, are registered and operation on the internet, interacting with a billion people both buyers and potential buyers, through trillion interconnected intelligent devices, (Chiozza & Stanford-Smith 2001). Fraud and security issues as describe above have brought significant stakeholders together to see that the two crimes are reduced, both the government and private associations come together to face the problem. “The threat of online fraud is so persistent that various governments have begun mandating security requirements for businesses that handle financial information online.” (Reynolds 2005). Like any other business e-commerce is a profit making business for people around the globe, through online advertisements, people are able to sell goods and services all through; (Merchant 2011). People invest in e- commerce as others would do in their physical businesses it takes time, patience and knowledge to operate a business online (McGraw-Hill 2005). It is due to this that people ought to respect each other and stop playing games as in most cases they cannot be traced. However, when conducting a business online it is advisable to put in measures that reduce the risks of being prone to insecurity attacks. Avoid giving too much organization information on the internet (Reynolds 2005) as this will reduce the risk of cybercriminals form getting to your most valuable information on the database. The research proposal seeks to understand the dynamic of fraud and other security issues that affect e-commerce, the fraudsters and security attacks change from time to time as the innovations advance (Niedzwiedzinski 2002). There are many types of frauds, as (Albrecht 1997) clearly shows; there are more than six types of frauds. The cyber crime and fraud being experienced today is more complex than it was when e-commerce was introduced. As more people get more informed on the risks, the fraudsters change their techniques to get unawares customers (Goodchild 2011). The limit and products that one can buy online should be well researched; (Reynolds 2005) suggests that customers should take time to research on products. Buy goods and services from known people who have the legal documents for operating as businessmen. As a seller, avoid selling downloaded materials, which do not, require a physical address hence more prone to fraudsters (Merchant 2011). A research on the company that one wants to buy products and services from, should precede the purchase of the goods, be aware of the business, their physical address, postal address for easy tracking (Chiozza & Stanford-Smith 2001). Before purchasing of the goods lay down all terms and conditions that apply; for electronic gadgets ask about the warranty period and have it checked on delivery to confirm that it is perfectly in order (McGraw-Hill 2005). Use of credit card, e- wallets etc, would have safer for your agent to follow up after paying for the services or goods. Clients should have systems to detect if their accounts are hacked; install a firewall to make sure that the risks of being attacked are low (Reynolds 2005). (Albrecht 1997) suggests that measures should be put in place so as to reduce the risk of more people losing money in dubious transactions in e-commerce. There should be the creation of awareness among shoppers to reduce invulnerability to fraudsters who are there to rob people (Reynolds 2005). Flow of information and communication is the mandatory in the fight against many cyber crimes in the world today (Saracco 2002). Any address that is recognised to be of a fraudster should be quickly reported, and warning should be spread around. There should be a policing technique among the clients/customers and sellers. This is essential as the fraudsters and cybercriminals target people who are connected in one way or the other (Debjan 2005). The Government and relevant authorities should put tough measures for criminals who are arrested for allegations of fraud (Niedzwiedzinski 2002). This will make sure that people shun away from fraud and other cyber crimes. The relevant authorities should be always alert to ensure that e- commerce is safe for all people to conduct business. With the policies put in place, people will be free to shop at all times without the fear of losing money. In the recent past, there has been a rise of online shoppers due to the policies and precaution which has been undertaken but there is still more to be done. Since 1999, there has been a steady rise in the number of transactions taking place in on the e- commerce (Chiozza & Stanford-Smith 2001). With the recommendations from the various researchers above and recommendations to be made at the end of the research, a couple of things can be adopted to make a safe and conducive environment for trade. 3 AIM AND OBJECTIVES The background of the proposal carefully outlined the key and common problems that face the e-commerce. The problems namely fraud and security, have an adverse impact on the trade throughout the trade, and this is a universal problem. The security issues cost e-commerce lots of cash, according to Goodchild 2011, E-commerce fraud and security issues cost retailers approximately 4 billion dollars each year. There is no one who is directly accountable for the losses made, but the seller and the buyers pay for it in the long run. This research proposal aims to find out the cause of the problem, impact and what measures can be adopted to reduce the menace. Below are the questions that will help me in the research: RESEARCH QUESTIONS 1. How often do you use e –commerce for your shopping? 2. What is the greatest security threat that you have faced in e-commerce 3. Is there a limit to the money you spend or the products purchased on line? 4. Have the security issues and fraud changed your perception on e-commerce and how you use it 5. Do you think the government and other stakeholders are doing enough to avert the problem? RESEARCH OBJECTIVES 1. To investigate if various stakeholders, companies are to blame for the security issues and fraud in the e- commerce 2. To analyse the relation between demand of products and services to the rate of security concerns and fraud 3. To critically assess the impact and effect of the security issues and fraud in e-commerce throughout the world The set questions are a tool to help in getting information from people; the questions are easy and are not leading. They are open in that they will require the respondent to further explain and elaborate more on their answer. The set questions are personal i.e. they target the respondent and not the general public; this helps the interviewee in giving his/her own experience and think from their own perspective as compared to giving other peoples accounts which will lead to a lot of guess work. However, the respondent is free to give other peoples experience if they were affected or sure of what transpired. In the objectives made above, the research seeks to find out from people their views on e- commerce. In the first objective, I will use both secondary and primary methods to find out who will bear responsibility for the security threats and frauds in e-commerce, how they are involved, and the role they play. The second objective seeks to analyse the relationship between the sale of products and services in the e-commerce and the rate of crime. How do the two affect each other i.e. when are people likely to use the e-commerce either when the fraud cases are high or low. I will use both primary and secondary methods to get data in answering the above objective. The third objective aims to assess the impact and effect of the security issues and fraud in the e-trade. What goods are most affected due to the fraud in e-commerce, are there companies and products /services that people shun away from due to the rampant fraud and security issues. In this objective, I will use primary method of data collection to get peoples view and opinions. My assumption before getting to research is that people who have experienced / who are victims of fraud and security issues, in the trade keep away from the trade altogether to avoid the loss of more money on goods that are not worth or poor services. The other hypothesis is that there are companies that are more prone to security attack and fraud than others. This is either due to the products they offer, or the organizational structure within the company. The above hypotheses are not true but stand to change after collection of data from various sources in the process of research. 4. METHODOLOGY The research is more on social issues that affect people in different ways; we cannot rely on secondary data to entirely respond to the research. The team will need to get to the field and get the primary data from people. We will conduct interviews to get the data from participants, the team will carefully read the questions memorize them and pose them to the participants; the interviewer does not cram the questions but have a satisfactory knowledge of what they are to ask. The team will use voice recorder. The method of data collection opted for is the best for this research as the team gets to interview people and hear their story, there is no limit as to the number of words that they use, nor do they withhold any information. We also get to see their non-verbal cues i.e. sound, facial expressions, which are also, supremely beneficial for the research. We will conduct research in Bells University; this is because the setting has many people it has a population of nine thousand students and about a thousand staff members all of whom are exceptionally busy. The fraternity’s busy lifestyle is likely to lead them to rely on the e-commerce for their shopping needs. The interviewees will cut across the entire population i.e. lecturers, students and other staff members within the university and not limit the research to one group of participants. As a result, the wide range of people, I am certain that each of them has different needs, due to their roles and responsibilities in society. We grouped participants into five clusters according to ages; this is because each age group has specific needs and responsibilities to meet. We will conduct the interview on 1100 respondents majority of whom are students as shown in the table below: TARGET GROUP LIKELY OCCUPATION NO. OF PARTICIPANTS 15-25 Years Undergraduate students 500 26-35 Years Masters students, working and young parents 200 36-45 Years MA/PHD Students, working and parents 260 46-55 Years Working and older parents 110 56 and above Almost retiring and no longer taking care of kids 30 There will be a need for a letter to show the legitimacy of me and my team to conduct research in the university grounds. We will therefore obtain an official permit from the university administration for them to allow the group to conduct the research as well as know the University’s code of conduct before talking with participants. Interviewees’ identity should not be revealed, and the collected data will remain confidential. We will inform the participant that the conversation will be recorded throughout the interview as it is their right. The team will take 10-15 minutes per participant and use 3hours a day in data collection. Since we are in 10 groups of two, each group will interview 12 respondents per day. The interview will be conducted in the mid morning for ninety minutes and late afternoon, ninety minutes to reach out to all target groups. The research will take less than 10days. Data analysis will be done each day by the respective teams; the data will then be coded and represented using graphs, tables and pie charts followed by a summary report to explain the interpret the data. 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A & Zimbelman M.F 1997, Fraud Examination: Identifying kinds of disclosure fraud pg 470 Saracco R, 2002, ‘A lecture on E-commerce, and the effects,’ at Telcom Italia L.A.B’ pg 78 Lucas M 2000, ‘Global cooperation or rival trade blocs’, Understanding business environs, vol11, pg 83 Miva Merchant 2011, ‘The History of Ecommerce’: How Did It All Begin? Online article Goodchild J 2009, E-commerce Fraud: The Latest Criminal Schemes Read More