Running head: UNIT 2 - ASSIGNMENT 1

Unit 2 - Assignment

Sarah Lai

California Intercontinental University

E-Commerce Models and Applications

Ebenezer Robinson
UNIT 2 - ASSIGNMENT 2

August 28, 2017Unit 2 - Assignment

International e-commerce across the fringe, when end users do an

online purchase from e stores, locally or overseas. Commerce through the

Internet between end users and traders that part one concerted language

and border, or that takes advantage of the same money is not always seen

as a cross-border by consumers. As a life example, we can see it clear in the

EU progress in commerce as they all are having one shared interest and

language.

The challenges associated with payments across international borders are as follows:

1) Huge costs The costs associated with international payments are high cost of

transaction charged by various remitter banks. They sometimes charge as high as $100 as

minimum transaction charge for any amount of payment. This restricts the number of

transactions as individuals would like to save transaction costs

2) Security of the transactions As times while using the credit card online, there

may be hackers who might stole the personal card information and misuse the card information

causing huge loss to an individuals

3) Time consuming process For making payments for subscription of shares of a

company located in a foreign company, there are many filing requirements to the regulatory

authorities post remittance of money.

Yes most e-commerce companies conduct business internationally by establishing local

distribution centers in the foreign country. Exchange rate fluctuation does not generally make a

lot of impact on online purchases. Online purchases are generally done instantly and the payment

is also required instantly, hence there is no risk of huge exchange rate impact. Shipping charges
UNIT 2 - ASSIGNMENT 3

are generally shown separately on the invoice and it is generally paid at the time of payment of

the money for the goods purchased.

The differences between a U.S. customer and an international customer who each make a

purchase from a U.S. e-commerce merchant are as follows:

1) Lower shipping charge to a US customer as compared to a non-US customer.
2) Faster delivery to a US customer as compared to a non-US customer.
3) No exchange rate impact for US customer as compared to some exchange rate

impact to a non-US customer.

Payments made across international borders means that the home currency is converted

into the host currency in the process of transaction. This is highly inefficient due to the various

challenges faced by it. The most significant challenge in any cross border payment is the

adherence to local laws and practice which exist within the domestic banking and financial

structure. So, if a payment is to be made from China to USA, it is difficult to adhere to both

Chinese laws and American Law. The other challenge is the lack of a common global standard

for these kinds of payments. Apart from these there is always the ever changing government

regulations regarding foreign exchange, international payments, tax laws, etc. Lastly cross border

payments also face currency conversion rates which may vary significantly from time to time.

Most of the e-commerce companies conduct business domestically. Only a few

companies have the necessary resources to overcome challenges of seamless international

transactions. Mostly these companies take the payment before delivering the goods, which

ensures that they are not at loss, if the customer does not take the good. Moreover, these

companies also have strict guidelines regarding payment of import tariff at destination country,

shipping charges, etc.

Exchange rate can play a big role in the number of online purchases made. When the

exchange rate is high, consumers tend to buy from local market to save money, but when the
UNIT 2 - ASSIGNMENT 4

exchange rate is low, online purchases spike up. Similarly a high shipping charge may

discourage a consumer from buying online, as it is seen that many a times the addition of

shipping charges makes the good costlier than the same good in home country. When a US

customer makes a purchase from a US e-Commerce merchant, he only pays the amount in

dollars and receives the good. Whereas in case of an international customer, the value of the

good jacks up as shipping charges, import duty, exchange rate fluctuations add up to the base

rate. Moreover there is always the high lead time of delivery for international customers. So,

mostly international customers prefer online buying only when the good is not available in his

own country or it is available for a very cheap rate even after including all the charges.

To sum up, some of the challenges associated with the payment across international

borders incorporate the domestic infrastructures that might not be designed to manage the

international payments. Another challenge could be the distinguished message standards. While,

the other major influence of regulations international wide can also be a significant challenge.

Apart from this, E-commerce companies conduct business certainly on an international

basis since the industry is flourishing very quickly. In order to protect the company from

repudiation, numerous measures ought to be taken. Within a transaction, the delivery and

reception of the payment can be associated with a proof which reveals the identity of the sender

and receiver. Along with this, the usage of convertible authenticated encryption scheme can

reduce repudiation. Every nation has imposed certain charges for exchanging the currency.

Within some countries, the exchange rates are higher. When performing online purchases, the

customers or merchants will have to pay extra charges for this. Imposing extra charges can affect

the online purchases.

UNIT 2 - ASSIGNMENT 5

Moreover, shipping charges in home town will be reasonable. While considering the

shipping charges internationally, the cost might go high certainly.

A US customer making purchases through US e-commerce site can experience a

convenient and better shopping experience. He doesnt have to pay extra charges for the

exchange rates and shipping cost will also be free for almost all regions of US. An international

customer buying some product through US e-commerce site will have to pay extra charges for

the shipping charges and exchange rates.

UNIT 2 - ASSIGNMENT 6

References

Karakaya, F., & Shea, T. (2008). Underlying Motivations for Establishing E-Commerce Business

and Their Relationship to E-Commerce Success. Journal Of Internet Commerce, 7(2), 153-

179. http://dx.doi.org/10.1080/15332860802067649

Kimbrough, S., & Lee, R. (2011). Formal Aspects of Electronic Commerce: Research Issues and

Challenges. International Journal Of Electronic Commerce, 1(4), 11-30.

http://dx.doi.org/10.1080/10864415.1997.11518293

Patton, M., & Jsang, A. (2014). Technologies for Trust in Electronic Commerce. Electronic

Commerce Research, 4(1/2), 9-21. http://dx.doi.org/10.1023/b:elec.0000009279.89570.27