E-economy. e-economy digital economy new economy. e-economy

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1 E-economy In 1977 Marc Uri Porat in The Information Economy: Definition and Measurement had forecasted that collection and distribution of information would create a new quality of economy, which would certainly influence on the social life. e-economy New communication technologies and the worldwide spread of the Internet have prompted the appearance of new business models and have changed the ways in which almost any business is conducted. The increased speed and mobility of business activities and cross-border transactions have particular implications for applying transfer methods and for taxing business profits. e-economy digital economy new economy an economy that is characterized by extensive use of the Internet and information technology new manners of the conducting business activities based on growing possibilities of contemporary information management techniques economy in which beside material factors information plays the key role

2 e-economy virtual area, on which the business activity is being conducted: where participants of the economic life are getting the knowledge about themselves from web pages where direct contacts are developing between participants ( ) where electronic transactions are being conducted, where the exchange of the value is being created Revolutionary changes are taking place for all market participants Organizations must redefine their strategies The passive attitude towards changes causes the market defeat E-business business conducted over the Internet using any of the applications that rely on the net, such as , instant messaging, shopping carts, Web services, EDI and others. Not only buying and selling, customer service, marketing via an electronic medium E-business and e-commerce are often viewed to be the same, but it is not correct. E-commerce is only a part of e-business, more specifically, the trading aspect of e-business. E-business e-economy e-business e-commerce e-marketing e-finances conducting business transactions f.e. via the Internet conducting of business including the electronic purchasing and selling goods and services, servicing customers, communication with business partners. The practice of servicing businesses or employees via an electronic medium. refers to commercial activities performed over computers and related technologies mainly through networks such as intranets, extranets, and the Internet to streamline, improve, and extend business operations

3 e-marketing e-economy e-business e-commerce e-marketing a subset of e-business embracing Promotion on websites Promotion in search engines marketing Telemarketing Viral Marketing e-finances e-finances a subset of e-business embracing Electronic banking Virtual broker's offices Insurance via the Internet a subset of e-business the exchange of e-commerce goods, information products or services via an electronic medium such as the Internet buying and selling via an electronic medium

4 Administration e-office Types of e-commerce e-cooperaction B2A B2B B2G Company Company e-ofer C2B e-shop B2C Consumer C2A C2C e-auction e-office Consumer C2G by Gregor B., Stawiszyński M. e-commerce Administration B2B Solutions - Realisations virtual markets horizontal vertical e-auctions trade stock online C2C e-auctions electronic bulletin boards B2A participation in government e-auctions electronic communication with the government paying taxes B2C online stores (e-shops) horizontal vertical e-auctions shopping groups C2B offers to buy A2B government e-auctions to buy sth to depute sth E-Commerce strategy Action plan of e-shop (store online ) BUYER presentation of the offer on the web page accepting an order electronic document processing delivery - electronic (intangible goods) or traditional (tangible goods) Database PRODUCTS Database Customers logistic back Personalization Web page Feedbacks Review of offers authorization centre

5 The most famous e-shops Amazon Newegg - computers Tesco.com in Great Britain Are e-bookshops the most famous e-shops? Merlin Helion pasaz.onet.pl wysylkowa.pl Abis liczba sklepów Number of e-shops in Poland II 2001 IV 2002 II 2002 IV kw. kw. kw. kw. according to the Visa in December rok 2003 about 1000 e-shops according to the Gazeta Wyborcza in October , by Money.pl in 2006 r. about 1000, December 2006, by Sklepy24.pl 2500 leading comparing sites have the offer of 300 shops Delivery of goods in the Polish e-commerce 52 % of e-shops guaranteed the free delivery of ordering above the certain amount (minimum zł) 72 % offered the delivery of the order to its customers by Polish Post in 2007 there were lots of troubles with couriers the offer of courier companies is directed mainly at corporate customers III 2003 What legal obligations didn t e-shops introduce? potwierdzenia confirmation zamówienia of the order podanie reporting informacji the right o prawie of the klienta customer do to the odstapienia resignation od of umowy the agreement wskazanie showing the sposobu way of skladania making a reklamacji complaint informacja, information jak skorygować how to correct zamówienie the order giving the date of investigating podanie terminu rozpatrzenia reklamacji the customer complaint podanie announcing pełnej informacji the complete o information przedsiębiorcy about the seller 30,20% 49,70% 50,80% 80% 85,40% 96,20% 0% 50% 100% UOKiK 2004

6 Internet auctions websites, where transactions of goods at auctions are held model for B2B, B2C, C2C among many kinds of auctions - there are vertical auctions (one trade, B2B) and horizontal - general stores, goods of different industries Today many companies used account on e auction as e-shop it is easier - they conduct e-commerrce without e-shop software, C2C auctions ebay was established 1996, Polish version 22 IV 2005 Allegro In 2005, over 3 million users (every third internet user), in million every 1 second new item is taken for sale every 15 minutes items with a total value of zł change the owner, Świstak in users i 60 mln turnover Taxes on e-auctions Revenue Offices began in 2005 to monitor Web Auctions to find: multiple vendors who have not registered the business activity transactions requiring the tax payment The contract of sale on e-auction is always liable to taxing on civil law transactions or with the VAT Before 1 Jan 2007 the PCC* duty rested with the purchaser, as well as the seller, now exclusively on the purchaser The certain part of the sale is dismissed : f.e. transaction up to 1000 zł ; * Podatek od czynności cywilnoprawnych Tax on civil law transactions e-auctions problems dishonest sellers gangs appointing good history for each other intercept accounts - phishing offer transaction outside e-services selling illegal goods whose turnover is not allowed f.e. drugs, fascist accessories selling fakes of branded goods

7 Escrow - security system of the online transaction The purchaser deposits money for the won object to the bank account of the Escrow providing services. The seller sends the goods to the purchaser. Only when the purchaser certifies the received goods, the payment is transferred from the Escrow account to the Seller. Thanks to Escrow, both sides, the Purchaser and the Seller, are sure that the transaction will end successfully. Marketplanet B2B platforms in Poland operating on the Polish market since 2001, Marketplanet has streamlined the procurement process in big enterprises like PZU, TP Xtrade Brokers operating since 2001 r., 70 big customers (2005) PPP (Polska Platforma Przetargowa) - PWPW specializes in public auctions Electronic bulletin board Electronic noticeboard e.g. of purchase and sale, of job offers (C2C) Through not-complicating rules of operation and resemblance to traditional forms - often used in other sections the e-commerce. Protecting in the e-commerce On the side of the server, on which the shop or auction are antivirus programs, firewall, upgrades and patches UPS Uninterruptible Power Supply procedures of the safety e.g. servers protection, passwords, regular backups Communication with customers SSL cryptography authenticating tools - e.g. digital signature

8 International initiatives concerning the e-commerce ICPEN (International Consumer Protection and Enforcement Network) Econsumer.gov with FTC (Federal Trade Commission) CNSA (Contract Network of SPAM Authorities) Euro-Label Euro-Label is the trust mark awarded to commercial websites that comply with the European Code of Conduct. It guarantees the reliability of international and national transactions. Expense euro Euro-Label - statistics In Polish e-shops E-Business Activities Web page e-procurement information about the company, electronic supply creating the corporate image accepting orders on-line from on-line searching for suppliers customers browsing, the only or one of the channels of distribution is the Internet goods and services order on-line The company is a client of e-shop issuing & sending e-invoices sending invoices via e-auctions participation presence in the electronic auctions and electronic procurement platform receiving e-invoices receiving e-invoices from suppliers e-payment practising

9 e- transactions Doubts associated with e- transactions completed when the agreement between a buyer and a seller to transfer the ownership or rights to use goods or services occurs over computer-mediated networks OECD Working Party on Indicators for the Information Society (WPIIS) Identification of the person - problem of the authorization from a distance, possibility of impersonating of other person The content of the transmitted messages, documents, contracts - the ability to change sth by the third company - the ability to read by the competition How to realize such an important element of the transaction as a payment? First electronic banking services started in the early 1980s both in the United States and the United Kingdom, but only in 1990s banks opened new Internet channel of communication with customers. In 1995 Security First Network Bank (SFNB) made possible to open new accounts over the Internet using a standard web. In 2001 more than 50% of American banks offered internet banking allowing for electronic transfers and credit card payments in e-commerce. Electronic banking Providing the banking service by access channels available thanks to new technologies and electronic devices like: The Internet, Phone Mobile-phone, Digital TV, Cash machine

10 e-banking forms activities Electronic bank (without buildings not brick and mortar ) Electronic branch of the real bank The electronic services associated with the traditional account - supplementing the offer ( clicks and mortar ) Access channels (1) Access by the software installed on the client machine (home-banking) access to the entire account history opportunity to prepare disposals off-line Access through a Web browser (i-banking) without special software bank may limit access to entire account history only on-line action Access through DTV - (TV-banking) Access channels (2) Access through phone - voice services (call-banking) danger of earsdropping Access through WAP poorer opportunities than in the browser slower transmission Access through SMS passive access account balance, the messages from the bank Mobile access PDA, 3G mobile phone Methods of online transactions authorization in Polish banks Single use passwords list SMS confirmation Electronic Token Digital signature

11 Old economy cash on delivery prepayment at the post office bank tranfers fee by a bank card in shops Payments in e-economy New economy virtual cards prepaid cards electronic wallets electronic transfers PaybyNet mobile payment Virtual payment cards Payment card intended to make a payment without the physical participation of the card Invest-Bank card, ekarta of mbank, Multibank netk@rta, CityConnect The customer needn t get it to the hand, but he must receive data for it (No., expire date) which will be given during purchasing in ,16% of all cards (over ) It is possible to pay only on the Internet, where there is also accepted a traditional credit card and some debit cards Electronic transfer Electronic Funds Transfer (EFT) a system of transferring money from one bank account directly to another, In Poland Płacę z Inteligo (Inteligo), mtransfer (mbank), MultiTransfer (MultiBank), Płać z Nordea (Nordea), Przelew24 (Bank Zachodni WBK), Przelew z BPH (Bank BPH), Płacę z PKO Inteligo (PKO BP) operation is not taken immediately if the accounts are not in the same bank - sometimes after a few hours - sometimes even after 2-3 days - it depends on the time of the transfer (session of interbank settlements) PayByNet PayByNet is the first in Poland system of real direct transfer between the customer and the store online without the need of both accounts being in the same bank. It is a product of KIR (National Clearing House) - system ELIXIR operator PayByNet reduces the time associated with distribution of ordered goods KIR immediately notifies the e-shop that money will come from the client - then the shop may immediately send the goods, not waiting for the transaction

12 Micropayments mainly for small payments practical for individual users to charge small amounts of money System of the electronic wallet, finding application in the handling of financial transactions, by which using the card payment is unprofitable. These are usually operations of little worth, as public transport fee or shopping in the community shop methods of micropayment eletronic wallet a kind of Internet wallet account where individuals would establish a cash balance with a third-party application that would monitor, collect, and distribute micropayments eportfel, Mikropłatności.pl, PayPal, MoneyBookers a smart card or sticker- for payment in traditional shops these are smart cards which are possible to power from the bank account or in special points intended for it. usually contactless payment in GB Mondex system has been implemented, working with MasterCard in the Benelux countries, the company's Proton World in the U.S. the Visa Cash in Poland MasterCard PayPass and VISA paywave approximately 3 thousand merchant locations in I 2010, in March 2011 Mobile payment SMS On-line transaction made using a mobile phone SIM card with a special written application Application on phone sometimes with the payment authorization by PIN In Poland EasyPay (PWPW) mpay (f.e. parking fee in Łódź) tickets for public transport CallPay - ticket purchase possible by a normal call (to a dedicated number) for each mobile phone. MoBilet - purchase via special application - you need to use the phone with Internet access, MPay - the purchase in Orange, Play and Plus, via menu or call. SkyCash - purchase via special application - you need to use the phone with Internet access, Unibank - the purchase is done by simple call any mobile phone.

13 Google Wallet In May 2011 Google began testing contactless payment system enabling to pay by waving a mobile over a reader. Payment is made from the account to which credit card (MasterCard CitiBank) or Google Prepaid card is assigned. The service is currently available only for American users of Nexus phone in Sprint stores, now also in f.e. McDonald's. Application uses NFC Bump Pay Transfers by tapping the phone with a friend. Bump Pay is a new app for person-to-person mobile payments developed by Bump, the makers of the app of the same name that allows the instant transfer of contact information and photos. In Poland such service named B2T is offered by CitiBank. FotoKasa In May, a new way for payment is possible in one Warsaw taxi corporation: MPT. Available for CitiBank customers with smart phones with the installed application CitiMobile. MPT driver has a 2D photo codes printed on the headrests of front seat. A customer wishing to pay through the application FotoKasa, starts CitiMobile, scans the picture from the headrest, and then enters and confirms the payment amount. After a while the driver can see if the money are on his account. E-commerce 65 % of Internet users bought online at least weekly: UK 18 %, US 14 %, Australia and the Czech Republic 12 % The percentage of users who never bought online ranges from 12 % in the United States to 92 % in Columbia. 93% continue to report some level of concern about the privacy of their personal information when or if they bought on the Internet concerns about privacy of personal information decrease as Internet use increases: non-users 76 %, light users 58 %, and heavy users 42% 93 % reported some level of concern about credit card security when or if they bought online 69 % of Internet users who bought online said that online purchasing has reduced their buying in traditional retail stores USC Annenberg Center for the Digital Future, APACS, 2009

14 Repetitive frauds gave the opportunity to establish a market for companies protecting transactions security and authentication i.e. ensuring security of communication by e.g. SSL certificates or digital signatures. On the market started activity companies, which do not only create and issue certificates, but also confirm them, like VeriSign in 1995 (established in 1980s as a part of RSA Security by Ron Rivest, Adi Shamir and Leonard Adleman the fathers of RSA algorithm). New ideas in e-business and in e-commerce new business models service aggregators comparison engines like BizRate, PriceGrabber, Ceneo or Nokaut; these portals show lists of prices from different on-line stores for specific products. Group or social purchasing like Groupon, Gruper, Fastdeal or Cuppon; services search for companies that agree to sell their product cheaper, but on condition, that they will be bought by an adequate number of people. service integrators New business models triple play. It combines in one package fee for Internet, television and telephone. quadruple play more often the fee covers fixed line and mobile advertising model frequently visited websites like social portals are attractive for advertisers New business models sophisticated needs specialized social networks f.e. GoldenLine, Profeo or LinkedIn, or social alarm Talko clock crowdfunding - grouping potential investors with authors of innovative ideas, like Kickstarter in United States and PolakPotrafi.pl in Poland crowdsourcing - social search engines, like Ask.com, Yahoo Answers, Answerbag.com, Dig, and Polish Pytamy.pl. electronic protection of reputation, f.e. ReputationDefender, or Polish Guarda Get Taxi in Poland itaxi

15 Sources of funding for StartUps own funds business angels public funds government, EU, in Poland PARP (Polish Agency for Enterprise Development); seed capital funds or venture capital crowdfunding competitions Start-up of the Day Microsoft BizSpark, Seedcamp, TechCrunch Disrupt, TechnoBoard in Poland, PROFIT SOURCES FROM NEW BUSINESS MODELS how an interesting idea will become profitable? providing certain services for free, with a view to change in the future the relation: charge to free collecting significant number of users for using their data for promotional purposes treating the users as potential customers of another service How to convince Internet users to pay for content? Invention of MP3 encoding algorithm gave an opportunity for conversion music and uploading MP3 files. As a consequence first P2P (peer-to-peer) services were established Music and movie producers are struggling with P2P sites They initiate the processes, they try to close them or prevent users from accessing such web pages Inventor of Pirate Bay, the portal with illegal music and movies closed in 2008, proposed innovative system of micropayments Flattr considered to be the best European start-up in 2010 (the European Start-up Awards 2010). Flattr enables musicians who share their music or bloggers publishing their articles to collect fees depending on how many people will be interested in what they do. The service is currently tested it was launched in August It is paid at least 2 per month