The impact that Internet marketing and E-commerce is having on business practices worldwide is only beginning to be felt. Established companies and new ventures are coming to terms with the possibilities, while Internet specialists struggle with creating the infrastructure that will make the Internet a safe and efficient means of conducting business. Software designers, government regulators, Web developers, telecommunications companies, Web hosts and ISP's are all convinced of the potential, while conscious that the biggest stumbling block to E-commerce expansion lies with the consumers themselves: Gaining consumer confidence is the central goal of E-commerce promoters today. The 1998 Christmas season was a giant shot in the arm for E-commerce industry as Internet sales bulged over the previous season, a clear sign that consumers are finally beginning to utilize the enhanced purchasing power of the Internet. Despite this, Forester Research found that over 60% of Web users still do not trust most web sites; most disconcerting to consumers has been the rash of reported E-scams, including bogus product offerings, shadow web sites, and direct credit card fraud. Meanwhile, businesses everywhere know that they need an Internet presence to remain competitive into the next century. In this light, how do legitimate businesses overcome the misconceptions and win the trust of consumers?
There are two key elements to securing consumer confidence on the web: One, ensuring that your customers know that the web site that they are visiting actually represents a real company with real products and two, convincing them that data, such as credit card numbers and other private information, is secure. Along these lines, many consumers are also concerned about how information they give to you will be used - a great number of consumers are not very happy about the idea that their name and other private information will be sold to other companies or market research firms. In recent years, a number of systems and common sense strategies have been developed to alleviate unnecessary consumer anxiety in these areas.
A fundamental form of E-commerce security is based on what is called a security certificate. This is a certificate, issued by an Internet security firm such as Verisign or Thawte (the two most recognized security certificate issuing firms) that interact with Web browsers to identify your company online. On critical web pages, such as ones in which users enter credit card data, a small icon appears. When a user clicks on the icon they can crosscheck pertinent company information with what they see on the web page they are viewing. In the case of TopHosts, a small box would appear with company information such as the company name, our URL and our address. This confirms that we are who we say we are!
Just as importantly, it confirms that any data being entered and then transferred back and forth from the server, where the web page resides, is protected by a Secured Socket Layer or SSL. In order to obtain a security certificate critical web pages must be hosted on a server protected by an SSL.
Web Hosting services are a key link in the chain of any E-commerce transaction. This is because they store the data that makes up your Web site. The transfer of data between the server and your customers, or to and from your Payment Gateway (or Credit Card Processing Agent LINK) is a potential security risk. This is where SSL comes in. SSL is based on an encryption system what is known as Private/Public Key Pairing. It is one of the most sophisticated encryption systems in use today and was developed for military communication purposes.
In Web hosting it works this way: An SSL enabled server has a 'public key' that can be read by anyone and then used to encrypt data to be sent to that server. The public key is a numeric value that results from a formula (the 'private key'), which is very difficult to reconstruct from the number that it creates. Once the data has been encrypted using the public key it is sent to the server where the SSL then decrypts the communication using its private key. SSL is effective because the private key is never transmitted from one source to another and therefore is impossible to intercept!
Recently major banking institutions have been encouraging a standard known as Secure Electronic Transmissions or SET. Based on the principal that most E-merchants don't need to know all the details of a transaction, what matters to them is that Amex, Visa, Mastercard or any other credit institution honours their customer's credit. With SET the E-merchant is not privy to the credit card information. The only information that the merchant receives is a simple approval or denial of credit by the Payment Gateway. Credit card information is always in the hands of bonded agencies operating at the highest levels of commercial security.
As a large amount of fraud is the result of loose credit card numbers floating around at the retail end of a transaction, they can eliminate risk by cutting the E-merchant out of the information loop. In fact they argue that this will make E-commerce transactions more secure than traditional retail credit card payments.
This question is as old as commerce but with the internet, where communication takes place anonymously, sometimes over thousands of miles and from country to country, winning customer confidence is even more difficult. Some large companies like E.bay and Amazon have already established reputations for performance, but what about a new Internet venture?
Sometimes this is just a matter of time but a new business can work to establish consumer confidence even without investing huge amounts of money in online advertising. Look for news groups, Internets communities and newsletters that revolve around you product area. By entering into the community and being open to E-mail queries you are building an online presence. Word of mouth reputation is, even on the Internet, one of the strongest forms of marketing and if you have a useful new product or service you can bet that users will come looking for you once the word gets around!
This is a big concern for consumers. Selling databases can be a great way of generating immediate revenue and an even better way of eroding consumer loyalty! Some users want to know about your new product offerings and are perfectly happy getting new information about related products and services from secondary sources. If you do intend to contact your customers in the future or sell your database to another company, ask them what they want. Add a question box to your order form asking them if you can contact them in the future and whether or not they want to know about related services. But make sure that they know that they are in control of how you use their private information!
Paper money, checks and credit cards are payment systems that have always been, and still are, vulnerable to fraud of various kinds. Like E-commerce, all suffered from lack public confidence when they were introduced into the economy. At the turn of the last century (A time when a handshake was a stronger sign of a firm commitment than signed contract!), as governments first began introducing paper money amidst a huge outcry, it was very difficult to convince people to trade in their gold, silver and copper for the new paper money.
The problems of E-commerce are no different, except that the basic principal and security systems of credit card transaction, the system that most E-Commerce is based on, already exist and only need to be fine-tuned for the new technology. E-commerce security systems are effective. When you start your E-commerce business find out what they are, and make sure that your visitors know that they are in play on your Web site. Soon, E-commerce will be as commonplace as paying cash at the corner store.