The age of electronic commerce

The history of electronic commerce

The starting point of electronic commerce is believed to have been the moment when sales automatization and corporate resource management technologies were introduced.

To be exact, it happened in 1960, when 2 American companies, namely American Airlines, and IBM created an automated seat reservation system. The system was named SABRE (Semi-Automatic Business Research Environment), and its purpose was to provide assistance to customers by informing them about flights and fares. Due to the automatization and optimization of the flight search process, the total cost of service was reduced. This is the success that electronic commerce is known for.

Over the last 20 years, electronic commerce has been steadily growing which can be explained by the rising number of internet users, social networks, interactive platforms and the emergence of electronic money.

Accessibility of electronic commerce

The worldwide web has made electronic commerce accessible to all kinds of enterprises. Some time ago, setting up mechanisms of electronic data transmission required profound investments in communication infrastructure and only major companies could afford that. But today, the internet allows anyone to become a part of the electronic commerce crowd and work with a worldwide client base. If information, services, and production can be distributed online, then the entire sales process can go on online too.

Electronic sales make the conventional business model more accessible to all stakeholders: the owner of an online store can sell products to a buyer located on the other side of the globe, and a buyer can easily order goods from a store located hundreds of miles away, which otherwise would cost a lot more. Users have the ability to compare hundreds of prices just by looking at their screens for a few seconds. The internet provides business with great opportunities, and the global electronic trade volume is continuing to grow.

The main payment method of today's electronic trade is bank cards, followed by smart cards, electronic money, micropayments and electronic checks.

The driving forces of electronic commerce

1) Online stores - websites that sell products online. They allow customers to place orders, choose payment and delivery methods and make payments in a web browser or a mobile app. Examples: Amazon, Amforward, Aliexpress.

2) Electronic payment systems - services that allow for the transаer of funds among transaction participants. Examples: OKPAY, PayPal, WebMoney.

3) Merchants - services that allow users to receive bank card payments as well as automate payment collection in an online store. Examples: Paymer, Payture.

4) Electronic currency exchangers - services that allow for the exchange of one payment system's currency for another payment system's currency. Examples: F1EX, XMLGOLD.

5) Billing services - services that allow for the maintenance of a ledger, plan switch cost calculation, account formation, flexible product management, financial paper flow automatization. Examples: sms-24, First Billing Services.

Posted on
12 September 2016