e-commerce (electronic commerce or EC)

E-commerce (electronic commerce or EC) is the buying and selling of goods and
services, or the transmitting of funds or data, over an electronic network,
primarily the internet. These business transactions occur either as business-to-
business, business-to-consumer, consumer-to-consumer or consumer-to-business.
The terms e-commerce and e-business are often used interchangeably. The term
e-tail is also sometimes used in reference to transactional processes for online
shopping.

History of e-commerce

The beginnings of e-commerce can be traced to the 1960s, when businesses

started using Electronic Data Interchange (EDI) to share business documents with
other companies. In 1979, the American National Standards Institute developed
ASC X12 as a universal standard for businesses to share documents through
electronic networks. After the number of individual users sharing electronic
documents with each other grew in the 1980s, in the 1990s the rise of eBay
and Amazon revolutionized the e-commerce industry. Consumers can now
purchase endless amounts of items online, both from typical brick and mortar
stores with e-commerce capabilities and one another.

E-commerce applications

E-commerce is conducted using a variety of applications, such as email, online

catalogs and shopping carts, EDI, File Transfer Protocol, and web services. This
includes business-to-business activities and outreach such as using email for
unsolicited ads (usually viewed as spam) to consumers and other business
prospects, as well as to send out e-newsletters to subscribers. More companies
now try to entice consumers directly online, using tools such as digital
coupons, social media marketing and targeted advertisements.

The benefits of e-commerce include its around-the-clock availability, the speed of

access, the wide availability of goods and services for the consumer, easy
accessibility, and international reach. Its perceived downsides include sometimes-
limited customer service, consumers not being able to see or touch a product
prior to purchase, and the necessitated wait time for product shipping.
The e-commerce market continues to grow: Online sales accounted for more than
a third of total U.S. retail sales growth in 2015, according to data from the U.S.
Commerce Department. Web sales totaled $341.7 billion in 2015, a 14.6%
increase over 2014. E-commerce conducted using mobile devices and social media
is on the rise as well: Internet Retailer reported that mobile accounted for 30% of
all U.S. e-commerce activities in 2015. And according to Invesp, 5% of all online
spending was via social commerce in 2015, with Facebook, Pinterest and Twitter
providing the most referrals.

The rise of e-commerce forces IT personnel to move beyond infrastructure design

and maintenance and consider numerous customer-facing aspects such as
consumer data privacy and security. When developing IT systems and applications
to accommodate e-commerce activities, data governance related regulatory
compliance mandates, personally identifiable information privacy rules and
information protection protocols must be considered.

Government regulations for e-commerce

In the United States, the Federal Trade Commission (FTC) and the Payment Card
Industry (PCI) Security Standards Council are among the primary agencies that
regulate e-commerce activities. The FTC monitors activities such as online
advertising, content marketing and customer privacy, while the PCI Council
develops standards and rules including PCI-DSS compliance that outlines
procedures for proper handling and storage of consumers' financial data.

To ensure the security, privacy and effectiveness of e-commerce, businesses

should authenticate business transactions, control access to resources such as
webpages for registered or selected users, encrypt communications and
implement security technologies such as the Secure Sockets Layer and two factor
authentication.