Electronic commerce or e-commerce has received much attention from governments, businesses and regional bodies. This importance has been attributed to several converging factors. These factors include the development of the use of the internet as a means by which information is disseminated and through which communication and connectivity is enabled and secondly, the affordability of personal computers and their increase in computing capability and the wide use of open standards.
In the business environment, traditionally there is a need for a tangible and permanent form of communication in a transaction between buyer and seller. However, in e-commerce, there is the ability to communicate in an electronic form where a computer can recognize, reproduce and store means that business could now be conducted in a paperless environment. Electronic commerce is the process of trading across the Internet, that is, a buyer visits a seller’s website and makes a transaction there. Less rigidly, it includes deals where the Internet plays some role, for example, assisting the buyer in locating or comparing products and/or sellers.
This new mode of transaction has raised several concerns for governments, businesses, and consumers. Also, there is a need for international standards as the e-market transcends any national border. Governments are also grappling with regulatory guidelines and frameworks in an environment of rapid technological changes to promote e-commerce as well as to ensure the occurrence of smooth commercial transactions. In all this advancement, consumer protection cannot be overlooked. without the confident e-consumer, there would be no e-commerce. Thus it is imperative to ensure that the online traders observe specific rules and guidelines to allay the fears of the consumers and promote ethical online transactions.
Research has also estimated that about 619 million people, some 10% of the world’s population had Internet access as of 2002. There can now be few in the developed world who do not have access to Internet-connected computers at home, work or through facilities such as public libraries and cyber cafes. Nearly one billion people or 15 percent of the world’s population will be using the Internet by the year 2005 and it is expected their use will fuel more than $5 trillion in Internet commerce. Although electronic commerce is currently in its infancy, research and reports suggest that it is growing rapidly.
For the full potential of e-commerce to be realized, several challenges remain to be overcome. Two of the primary challenges that have been listed in almost all literature on e-commerce include consumers’ online security and privacy. These are of primary concern to all parties for all consumers. According to publish reports like Web Navigation; O’Reilly 1998, cited in Finnis, 2003, “for most shoppers, feeling secure about entering financial information is the most important consideration in shopping online.” She justifies her assertion by referring to the 8th GVU User Survey in which “shoppers overwhelmingly listed security as a concern.
Consumers who would happily mail their credit card number, read it down a telephone line or even hand it across a bar, hesitate before typing it into a browser screen. Although confidence is beginning to grow, fears are reignited by news reports of hacking such as the attacks on net giants like Yahoo E-Commerce currently offers secure server and encryption technology as a solution to the security risks associated with transmitting data through cyberspace.
Encryption involves encoding information into a form that only the intended recipient can interpret. The commonly used public-key encryption involves two keys for each user; a public one, made freely available and a private one known only to the user. Sensitive information (ex: a credit card number) is encoded using the intended recipient’s public key before transmission, even if intercepted by a hacker it is thus useless without the corresponding private key.
While it is certain that security technologies will continue to improve, it is at least, if not more, important to reassure consumers that the online transactions in which they are engaging are secure. An informative and easy-to-read explanation of a site’s security features forms an important part of its promotional strategy. More importantly, regulatory measures – both legal and otherwise – need to be in place to authenticate all online traders and ensure consumer protection in e-commerce.
Closely, related to the issue of security is that of privacy. Privacy is second only to security in most shoppers’ minds. The process of requesting and storing personal information is one where the interests of site providers or vendors and visitors or customers are seemingly at odds. Web users are naturally concerned about the potential invasion of privacy associated with provided information online.
Finally, international initiatives are seeking to build international consensus on core protection for electronic consumers, like those by Europe, the US, and Asian governments. However, there is still a gap in the agreement to resolve how countries can specifically address dispute resolutions and the other concerns of both the local and the international e-consumers.
The future of e-commerce seems to be very bright. However, it can only remain so if there is consumer trust and confidence in it. Therefore, there is a need for online traders to be accountable and responsible to the consumers. The government and businesses need to work together on an international platform to ensure specific standards are set, which will assist the electronic traders to meet their responsibilities more systematically.
Lastly, more regular and intensive research needs to be done to identify the weaknesses that exist in individual nations in consumer protection issues in electronic commerce transactions so that they can be rectified concurrently as the digital industry advances rapidly.