BUILDING TRUST IN ECOMMERCE - PowerPoint PPT Presentation

Loading...

PPT – BUILDING TRUST IN ECOMMERCE PowerPoint presentation | free to view - id: cf382-NzlhM



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

BUILDING TRUST IN ECOMMERCE

Description:

Risk assessment & credit bureau. Escrow. Insurance ... 3: Risk assessment and credit bureau ... Same issues as PKI and credit bureau. Government can consider ... – PowerPoint PPT presentation

Number of Views:458
Avg rating:5.0/5.0
Slides: 34
Provided by: Alv957
Category:

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: BUILDING TRUST IN ECOMMERCE


1
Building Trust In E-commerce
BUILDING TRUST IN E-COMMERCE Response to iDAs
consultation paper
2
SCOPE
Building Trust In E-commerce
  • Introduction of Auplex
  • Auplexs research on trust building (for sharing)
  • Consumers Perspective
  • Businesses Perspective
  • Response to iDAs questions covering
  • PKI
  • Standards and practices
  • Risk assessment and credit bureau
  • Escrow services
  • Trust marks
  • Insurance
  • ASPs
  • Legal framework
  • Taxation and regulations

3
INTRODUCTION OF AUPLEX
Building Trust In E-commerce
  • Auplex is a young and dynamic company formed by
    individuals from diverse background, including
    IT, consultancy, Government, HR, marketing and
    operations.
  •  
  • We deliver affordable, personalized and trusted
    e-business consultancy services to emerging
    enterprises to develop and launch their
    e-businesses. We have a robust Analyze-Construct-T
    ransform methodology to assist our clients in
    this process.

4
Risks in Commercial Transactions
Consumers' Perspective Risk Perception
  • Traditionally, consumers seek to reduce
  • Financial risk (losing money / paying too much)
  • Functional risk (receiving wrong / malfunctioned
    good)
  • Social risk (using product that reflect badly on
    user)
  • Physical risk (being harmed by product)
  • In E-commerce, transactions take place between
    faceless strangers, across geographical
    locations, via relatively open network
  • Financial and Functional risks are exacerbated
  • New additional risks

5
Risks in E-Commerce Transactions
Consumers' Perspective Risk Perception
  • Authenticity Quality
  • Will the business deliver the products, services
    and warranties it promises?
  • Will there be any recourse if the business fails
    to deliver?
  • Transactions
  • Will transactions be processed accurately,
    completely, and be secured?
  • Privacy
  • Will consumer info be protected or abused?

6
To overcome risks build trust, consumers desire
Consumers' Perspective Risk Perception
  • Authentication
  • Recourse
  • Integrity
  • Confirmation
  • Privacy
  • Anonymity
  • Please refer to notes for this slide for
    explanation on each point

Source Froomkin, A.M., The Essential Role of
Trusted Third Parties in Electronic Commerce,
1996
7
Trust isnt Everything. . . But its a lot
Consumers' Perspective Risk Perception
  • Only 10 perceived little or no risk
  • Issues of trust, particularly, security of
    personal info remain important
  • People buy online
  • Convenience
  • Ease of use
  • Good prices
  • Wide selection

8
Privacy and Security are key concerns
Consumers' Perspective Risk Perception
3
7
9
Privacy and Security are key concerns
Consumers' Perspective Risk Perception
3
8
10
Six Components of E-commerce Trust
Consumers Perspective Models of Trust
  • Brand Name Recognition
  • Effective Site Navigation
  • Transaction Fulfillment
  • Professional Presentation
  • Up-to-date Technology
  • Web-Based Seals of
    Approval
  • Please refer to notes for this slide for
    explanation.

Source Studio Archetype/Sapient Cheskin
Research, eCommerce Trust Study, Jan 1999.
11
Model of E-commerce Trust Development
Consumers Perspective Models of Trust
  • Info vulnerable to hackers
  • Tech. unreliable
  • Perception of chaos
  • Desire for control
  • User control still a concern
  • Individual assured of some control over personal
    info
  • Seals of approval reassure user
  • Sense of security
  • Focus on other signifier of trust

Source Studio Archetype/Sapient Cheskin
Research, eCommerce Trust Study, Jan 1999.
12
Consumers Perspective Models of Trust
Source Studio Archetype/Sapient Cheskin
Research, eCommerce Trust Study, Jan 1999.
Source Studio Archetype/Sapient Cheskin
Research, eCommerce Trust Study, Jan 1999.
13
SUMMARY
Consumers Perspective
  • Key issues are authentication and identification
  • Other issues are
  • Privacy (Analysis was based on data from an
    American survey. Separate survey in Singapore and
    in an Asian context may be required for a more
    accurate analysis.)
  • Consumer protection
  • Use of digital document as legal instrument
  • Mechanism for dispute resolution
  • Scope for use of established brand and experience
    with brick and mortar companies as a starting
    base

14
Risks in E-Commerce Transactions
Businesses' Perspective Risk Perception
  • Authenticity
  • Will goods and services be delivered to customers
    who can authorise purchases and pay for them?
  • Security
  • Will sensitive info, transaction data and online
    communications be secured?
  • Non-repudiation and recourse
  • As e-commerce opens up new business
    opportunities, companies will transact with new
    business parties
  • Will buyers and sellers honour their commitment?
  • Are the existing mechanisms and legal framework
    sufficient to resolve e-commerce disputes,
    especially for cross-border trade ?

15
To overcome risks build trust, businesses desire
Businesses' Perspective Risk Perception
  • Authentication
  • Certification
  • Confirmation
  • Payment
  • Anonymity
  • Please refer to notes for this slide for
    explanation.

Source Froomkin, A.M., The Essential Role of
Trusted Third Parties in Electronic Commerce,
1996
16
A note on payment
Businesses' Perspective Risk Perception
  • Instruments like LCs, B/L and S/G play an
    essential role in addressing issues of risks,
    credit terms and trust between transacting
    parties in a brick and mortar world
  • These are inefficient instruments and the
    information captured by each instrument overlap
    with each other to a large extent. (IT and
    e-commerce can therefore be useful tools enhance
    efficiency.)
  • There are no parallel instruments in e-commerce
    to link the information and material flow at this
    stage to bring greater efficiencies to trade, or
    to facilitate cross border trade.

17
SUMMARY
Businesses Perspective
  • B2b e-commerce is still at its early stages of
    development
  • It is between the stages of Unaware and Build
    Trust. (See slide 12.)
  • There are a few key challenges w.r.t. building
    trust
  • Authentication and control
  • Payment mechanism and credit facilities
  • Established security devices and practices
  • Established certification standards

18
Overview
Auplexs Feedback
  • The rules of engagement for transactions between
    businesses and that between businesses and
    consumers exist for a reason
  • Authentication of buyer and seller to minimise
    fraud
  • Existence of middleman/distributors to
    assume/minimise risks and facilitate delivery and
    payment (eg clearing house)
  • Banking and insurance facilities to cover
    exposure
  • Secure network for transmission and capture of
    information
  • Legal and government framework for recourse and
    regulation
  • Relationships and checks for credit worthiness
    and credit terms
  • The same rules apply very much to e-commerce. The
    only differences are
  • the medium and tools are different in some ways
    and
  • the processes and information flow tend to be
    faster and more transparent.

19
Overview
Auplexs Feedback
  • We need a holistic approach as the problems are
    inter-connected
  • the issues identified by iDA in its consultation
    paper cover most of the issues involved
  • The relational diagram in the next slide maps out
    the issues identified by iDA and also the other
    components which we think are important but were
    left out in the consultation paper
  • Auplexs feedback is centred around b2b EC.

20
Overview factors to facilitate growth of
e-commerce
Auplexs Feedback
3
1
7
4
8
9
5
Trust Marks
Training
6
Tax
Legal framework
Security standards and practices ISO?
10
Awareness
6
ADR
Regulation
2
Process
Recourse
Cross-border frmwk
Inertia
21
1 PKI
Auplexs Feedback
  • Agree that PKI is a useful infrastructure for
    security
  • Challenges for it to be adopted and to be useful
    are
  • Standard. PKI has to be standardized for trade
    beyond Singapore. The Singapore market is too
    small.
  • Costs. Service provided must be affordable,
    overall costs should be lower than traditional
    means for e-commerce to make sense.
  • Adoption. Gadget-based PKI should be easy-to-use
    and affordable for wide-adoption.
  • Phasing. PKI should preferably be built on
    existing e-commerce systems to minimize financial
    and psychological costs.

22
2 Standards and practices
Auplexs Feedback
  • There may be a case for iDA to look into
    non-gadget based standards and practices w.r.t.
    to e-commerce security
  • These system/standards/practices will be
    applicable to
  • Businesses
  • ASPs
  • Escrow Service Providers
  • These system/standards/practices should be
    compatible with/complement PKI and certification
    bodies
  • Government could also consider working with the
    industry players to pioneer the development and
    implementation of such standards. (Auplex is
    willing to offer our ASP services as the pilot.)

23
3 Risk assessment and credit bureau
Auplexs Feedback
  • Risk assessment is essential for trading
    activities in the physical world e.g. approval
    for letter of credit.
  • It is even more important for e-commerce.
    However, to make it useful there need to be
  • A Common standard. This is useful for intra and
    cross border transactions.
  • Achievable within acceptable costs. Especially so
    if businesses are to pay for it.
  • Any mandatory credit ratings should be considered
    with care as emerging enterprises should not be
    unduly disadvantaged.
  • Government could consider the following
  • Set standards and framework for risk assessment
    and its application
  • Educate SMEs on ways to improve and manage their
    credit ratings
  • Work with international bodies to establish
    common standard. This is also key to the plan to
    make Singapore a hub. Standards that apply here
    should also be accepted elsewhere (if possible)

24
3 Risk assessment and credit bureau
Auplexs Feedback
  • There are many different credit bureaus in USA.
    Questions are
  • How reliable are they?
  • How can people apply and make use of them?
    (education)
  • Is there a common standard?
  • Credit assessment services could be better
    provided by the private sector than by
    Government. It could be banks, escrow or third
    party.
  • Government could help in education as well as
    setting up the framework for standards and
    accreditation of such service providers.
  • Other impediments issue of who is going to pay
    for it?

25
4 Escrow
Auplexs Feedback
  • Escrow services can be a very useful means to
    address trust issues.
  • Escrow services mirrors most parts of the current
    trade financing system in the physical world.
    Escrow services can be useful in the facilitation
    of a seamless e-commerce experience because
  • Cost would be higher for business to switch
    between online and offline system to complete a
    transaction
  • Process could become more efficient by
    integrating the trade financing elements
  • The greater convenience, lower costs and better
    coverage of exposure can help to reduce inertia
    to go onto e-commerce.

26
4 Escrow
Auplexs Feedback
  • Currently, the banks are fulfilling the function
    in some way through instruments like LCs.
    However, there are problems
  • Banks are protective. Most banks require
    transacting party to open an account with them.
  • Banks require full security from buyer on top of
    a fee.
  • In cases where the bank representing the
    buyer/seller here does not have a relationship
    with another bank representing the seller/buyer
    overseas, a third bank would be involved. ?
    higher cost
  • Process is manual and inefficient thus driving up
    costs (Eg Information flow is inefficient. Fields
    in Purchase Orders, Sales Orders, LCs, Shipping
    Guarantee and Bill of Lading are similar and this
    can be managed more efficiently between buyer and
    seller through e-commerce.)
  • Most banks are not quite ready to open up yet.
    Also largely due to the lack of supporting
    services like credit assessment, PKI, etc

27
4 Escrow
Auplexs Feedback
  • Escrow services could be done by
  • Banks and financial institutions
  • Logistic companies
  • Independent service provider
  • Criteria financial resources and global presence
    or alliance

28
5 Trust Marks
Auplexs Feedback
  • Most trust marks are for b2c e-commerce
  • We believe it would help but it has to be backed
    by
  • Educational effort on the value of trust marks
  • Accreditation and quality control of trust marks
  • Mechanisms and means to carry out recourse or
    rectification actions should the e-merchant
    failed to deliver
  • There would be limitations when consumers buy
    from overseas or when foreign consumers want to
    buy from Singapore e-merchants. Same issues as
    PKI and credit bureau.
  • Government can consider
  • Working with establish brands like NTUC co-ops
    whose objective is to safe-guard consumers
    interests.
  • Setting up a framework and standards for trust
    marks
  • Collaborating with foreign authorities on a
    common standard (similar to ISO)

29
6 Training
Auplexs Feedback
  • iDA has already identified training as one of the
    elements under Infocomm 21
  • Educational effort useful to raise awareness and
    acceptance and should form part of the framework
  • Training is even more important if a national PKI
    is adopted

30
7 Insurance
Auplexs Feedback
  • We are of the view that it may be too pre-mature
    to talk about insurance at this stage
  • Businesses need to ascertain risk before deciding
    on whether insurance is worth it
  • Cost of insurance have to be viewed in totality
    with costs of PKI, credit assessment, escrow
    services etc

31
8 Infrastructure/ASP
Auplexs Feedback
  • Trusts needs to be build up between businesses
    and ASPs and infrastructure provider (if they go
    on EC on their own)
  • ASPs lowers costs of EC and are critical to
    accelerating the adoption rate of EC for business
    users
  • Many businesses still have the misconception that
    hosting on their own is more secure
  • Efforts in (1), (2), (5) and (6) are needed to
    support ASPs

32
9 Legal Framework
Auplexs Feedback
  • Besides ADR, legal mechanisms to settle dispute
    besides ADR should also be easily understood and
    made accessible.
  • Government could consider looking into the
    following
  • issues of law and jurisdiction/ agreements
    treaties
  • mechanisms and standards for dispute resolution
  • work with bodies to provide training and
    education on this area e.g. contract law, online
    transaction

33
10Tax Regulation
Auplexs Feedback
  • Outstanding aspects of taxation have to be sorted
    out
  • Eg GST, VAT, etc
  • Jurisdiction and right to tax
  • Regulations could also be refined
  • e.g. import and trading regulations online
  • Restrictions made known, etc
About PowerShow.com