Under the Data Protection Act 1998 (DPA), anyone as an individual or a company storing or having access to sensitive information regarding another person i.e. a customer with details on a database, must follow the acts that are set out.
The DPA is an act that all electronic businesses must comply with and follow specifically, other legislation that applies directly to the DPA are the Freedom of Information Act 2000 and the Privacy and Electronic Communications Regulations. These acts should be located in the terms of use and agreed to by the user before any details may be disclosed.
To insure there is no breech of the DPA an agreement between customer and company would have to be prepared and the user who is supplying the information would have to read and electronically sign or otherwise agree to the conditions stated within. Such an agreement should specify exactly why the information is requested, how it will be used and who will have access to it. Another important aspect of terms of use disclaimer is to where it will appear on the website and how the user can agree to it as well as in some cases making changes to suite the user while still conforming to the Data Protection Act.
Copyright
Copyright law affects many different aspects of a website and what can be put on a website, copyright effects company logos, images, video or audio footage, computer programs and artistic works. When building a website is sure to have authorship of work or gain authorship from the original creator, this may entail seeking a company to carry out creation of logos, graphical designs etc…
In such an instance such as the use of possible copyrighted materials permission must be sought from the creator in way of a contract as any use copyrighted materials used without permission from the creator or creators will result in copyright infringement.
Copyright (cont.)
Although copyright is automatically the right of the author it is recommended to consider registering your work. All works which are covered by copyright law should be registered for extra protection of authorship of work, once registered you are permitted to state that the work is registered and covered by copyright law as an extra deterrent against any infringement.
Copyright notice should also be visible, the notice should be obvious and legible, and if applicable, (e.g. web sites) the notice should appear on every page.
Mark any copies of your work with a notice, on the body of the work as well as the cover or sleeve. The notice should be set out on each page of the website with the copyright symbol, the name of the owner and if applicable the year of publish. For sound recordings you should also include a phonogram rights notice for the sound recording itself, using the phonogram symbol to indicate the copyright of the sound recording.
The Electronic Communications Act 2000
The electronic communications act 2000 (ECA), allows electronic signatures to be valid within a terms of agreement or contract. Businesses need certainty in legal matters, so the (ECA) proves protection for Europe and the UK, this helps build confidence in business that it is secure to move to an e-business status without fear of fraudulent activity.
In some e-commerce states only hand written signatures are allowed as electronic signatures can be widely discredited, with the ECA legislation in place, it extends the recognition of e-signatures.
With e-signatures, placing orders can be more certain as many people mainly in business place orders through the use of emails and us e-signatures, the advantage of this is, placing an order over the phone or mail order are based on a verbal contract between two or more people or entities, which is obviously not as secure as a written agreement.
For instance with ECA legislation in place, an email with a digital signature is valid and is legally binding.
The Electronic Communications Act 2000 (cont.)
Another use of the ECA combined with the use of email ordering is, terms and conditions of the transaction can be agreed to and the documentation can be recorded more specifically, reducing the amount of work involved and possible errors which may lead to disputes.
With ECA legislation in place, it leaves only a few areas in the UK where a hand written signature is required, one of these would be land contracts, usually a hand written signature is required when two people or companies wish to be happy in the knowledge that the agreement is more fraud proof.
The ECA partly was created to speed up the rapid development of e-business and bring it to its full potential for the benefit business and employment.
With the amount of online transactions and e-companies in today's world, with e-business and e-communications sky rocketing, the ECA strengthens security and provides a better footing in international trading as well as bestowing confidence in more people where internet trading is concerned and the possibility of personnel data being used by someone else.
E-signatures being sent and received over the internet allow the recipient to check that the data has not been tampered with, the ECA directives are not meant to dictate what is right and wrong of using e-signatures , but states how e-signature certificates should be used to identify security risks and allow safe and free movement across the internet.
Contracts
Contracts on the internet involve e-signatures and distance selling, under English law contracts can be formed verbally. When goods are purchased, it forms an automatic verbal contract, when email contracts are used it is easier for the seller as terms and conditions can be sent to the buyer, stating clearly in writing.
Terms and conditions should be stated on the company website along with contact details including the company name, the address, telephone numbers etc...
Contracts (cont.)
These points and a clear understandable terms and conditions page will allow for customers to know what is required, like the collection of personal, financial or other sensitive information. The best option for internet traders is to write up there own set of terms and conditions and publish them on the company website as a form of protection in the case a customer may be able to manipulate weaknesses within the contract.
Web accessibility
The disability discrimination act (DDA) states that websites are to be made accessible to the blind and other people suffering with disability. Although most operating systems have programs that assist with disabled access i.e. Microsoft Windows, the DDA states that reasonable measures are to be taken to assist disabled users access certain websites, this includes websites that provide a service to the public. E-commerce websites fall under this category as they provide a service to the general public.
Companies that don't have disabled access or have not made reasonable adjustments to implement disabled access into there website, can most certainly be sued. Mostly everything used in a website is covered by the DDA, the DDA should be read carefully to ensure the company has got the options for disabled users, preferably before building the company website as accessibility options can be added to the initial design instead of having to potentially remove the website and effectively loose money from customers to make relevant changes.
To ensure the company website is accessible to all web users, the company must provide alternatives to images, JavaScript, flash animation, audio and video footage. Forms need to be accessible to all web users, so this will directly affect an e-commerce website, like when a user with a disability is presented with there terms and conditions they have means to reading and understanding them.
Web accessibility (cont.)
Other points to having a disabled user friendly website:
It should be easy for all users to quickly process the content on your website.
Structure and presentation should be completely separated.
The user should have accessibility control over your web pages.
Law and ethics
Law and ethics are key features of any business environment and as e-commerce grows, more laws are needed and with laws come ethics as law and ethics can sometimes be very similar and apply to the same thing, it can be hard to decipher what is lawful and what is ethical. Ethics as well as law in e-commerce directly affects the following aspects of e-commerce:
Privacy - privacy is a very important issue for customers and businesses alike, under data protection laws, sensitive or financial information of customers is strictly private and can only be used respectively as stated by terms and conditions of a contract between two people and/or companies. Private data should only be kept for the maximum amount of time it takes to complete the transaction. Any unauthorised access of this data would be considered as an unethical action and also an infringement of both the DPA and the contract.
Intellectual property - intellectual property applies to copyrighted materials i.e. products, designs, logos, images, audio, video and names etc… these things are covered by legislation and common law. Ethics of copyrighted materials can be an important ethic for every business, for example photocopied materials that contain copyrighted property can cause questions about copyright infringement this may raise topics about copyright ethics and the fact that this may arise regularly in many corporations and businesses.
Law and ethics (cont.)
Free speech - the internet has become a popular place for people to communicate with each other and to express there views regardless of location, background, gender etc… however the internet has been used to display possibly offensive materials such as slander, hate and adult content. Since such materials can be accessed by anyone with an internet ready computer, there are moral and ethical implications to what can be accessed on the internet and what sort of warnings or age restrictions can be put in place. Again it's a fine line between what is unethical and what is illegal. Businesses should be very careful to what they put on there sites including links and what sort of warnings should be in place.
Accuracy - accuracy of information held on an individual is important, as personal data stored on a business database is different to what the person involved specified, it's likely it's a mistake of either the system or human intervention. There is always the suspicion that data has been accessed and purposely changed by someone who wishes to use the data for perhaps there own gain. In light of this possibility sensitive information must be well safe guarded with restricted access points. Information must be collected accurately or it may lead to an injured party putting in a claim for breech of data protection laws and a possible simple mistake may be costly for the company involved. This may not directly apply to registering on a website as details are usually entered by the customer on some kind of online form or sending the details via email, although it might be advantageous to make sure the customer double checks the information and confirms it is correct for extra protection.
Law and ethics (cont.)
Accessibility - accessibility usually applies to a business environment, where sensitive information is being held, data about the company, other companies, employees or single consumers. A question is who would be allowed to have access to this sort of information and what data they would be allowed to collect/view, under what conditions, with what security in place to ensure safety of this information. Where data is stored on an individual, that person must be able to access there personal data and check that the information held is correct.
Payment methods on the internet
Introduction
There are many different types of payment methods available on the internet, having a wide range of different payment methods available on an e-commerce website can create more interest from a wider range of potential customer as there are a lot of people who have trust issues with financial transactions on the internet, having a wide selection of different ways to pay can also benefit people with limited payment options i.e. a person who doesn't own a credit card, or international payment flexibility.
An e-business must decide prior to the creation of the website what methods it will accept for payment of goods or services from customers, the options would include to accept electronic payments only or traditional payment methods or both. Electronic payments are quicker to receive which means the recipient would get the product quicker than traditional methods, this would be beneficial as many people want quick and easy services like 24hour delivery. Traditional methods would be noticeably slower in the case that a customer has sent a paper cheque through the postal system once received by the company only then the goods may be sent out to the recipient, as many companies would be reluctant to send any goods without first receiving payment.
Traditional payment methods despite the speed of service may be beneficial to customers with limited payment options, so having traditional payment options available on a company's website would allow interest from a wider range of potential customer.
E-payment methods
With so many ways for a consumer to pay, choosing which methods to use may directly affect a potential consumer's opinion and the volume of custom on the website. Most companies will choose the payment methods most suitable for them, usually depending on what sort of consumer is going to be interested in there product i.e. a website that appeals to young persons may have to acknowledge that consumers may not have access to credit cards, so other payment methods should be available. Other companies which may appeal to a wider range of consumer should support as many payment options as possible while still considering the expense of such options, to attract many different kinds of consumer, as this would directly affect the consumers views on the company and there website.
Electronic cash
Electronic cash or otherwise known as digital cash, e-cash or cyber cash is an anonymous method of payment in the form of a unique number which is associated with a certain amount of money.
A person can deposit money from there bank account or credit card and then are given an account number, this number represents the amount that person has to spend and it can be used for electronic payments on participating websites on the internet. E-cash can be a popular way to make micro payments, micro payments can be defined as a payment that falls under the minimum transaction fee on a credit card.
E-cash may be a good approach if products and services are offered on an e-business website that fall under the minimum amount of money that can be spent on a credit card i.e. items on sale or clearance deals.
E-cash systems may include the use of prepaid cards, including smart and/or magnetic cards.
Prepaid cards
Prepaid cards are cards that a user will transfer a variable amount of money on to from there bank account, once loaded with the required amount they can be used in online purchases or outlet stores.
Prepaid cards (cont.)
Prepaid accounts can also be used, they are set up online via a retailer for use on those retailers sites only, very much like gift vouchers that can be exchanged for money.
Both of these methods appeal to those who don't own or don't want a credit card, or want to have more control over there expenses.
Magnetic cards
Magnetic cards are another type of prepay card, used as a payment method both online and in outlet stores for some companies. The value is stored on the cards magnetic strip which stores the information to be accessed. Online magnet strip cards are used mainly for identification as well as payments similar to credit cards, the major difference is the user loads an amount onto a magnetic card from a bank account and no more than that amount may be spent.
Information from magnetic cards is read by a system that accesses the information although data is overwritten by the system. Problems found with the magnetic card including security issues have led to the development of the smart card.
Smart card
Unlike to magnetic cards, smart cards do not have a magnetic strip and the information is stored on a computer chip instead. Smart cards can store more information, so from a company's point of view, this will equip people with means to potentially spend more money at any one time, thus opening up the possibility that e-business that support the smart card payment system may be able to make more profit from smart card users.
Merchants who want to accept smart card payments must have relevant software and/or readers which add additional costs as well as the already present costs of accepting credit card payments. Smart cards can be reloaded over the phone or use of the internet and the transfer will be almost instantaneous. Smart cards can be used for all types of payments including small payments, this would be directly useful for making micro payments.
Electronic cheques
An electronic cheque or e-cheque is the same as a paper cheque apart from it is electronic used on the internet. It looks exactly the same as a paper cheque containing the usual information such as the amount, account number, cheque number and other required details. A concern with e-cheques is customers may be worried about the security implications when sending e-cheque's over unsecured networks.
When an e-cheque is sent to a recipient the information can be sent to a check clearing service or directly to the recipient's bank account which will then allow an electronic transfer of funds to the payee. Companies which want to allow the use of e-cheque's can either use software for the production and handling or funds or can use third party e-cheque handling services which would charge for there services. E-cheque's are a useful solution for customers who can't/won't have a credit card, in light of this an e-business that accepts e-cheque's will encourage more custom from perhaps international interest thus more profitable to the company.
Credit cards
Credit cards are the preferred payment method on the internet as credit cards can just as easily be used in a shop as they can on an e-business website. The main reasons why credit cards are a popular choice for the online shopper include easy access to credit cards and convenience of use. Where e-business is concerned, credit cards can be costly but as they are a popular payment method it is important that companies with e-businesses accept this method of payment as it will interest a much bigger number of potential customers as well as those wishing to use more traditional methods.
Digital wallets
A digital wallet, also known as an electronic wallet or e-wallet is a piece of software that charges a small fee for its service. In the same respect as e-cash it's a program that users can transfer money into then buy online using the e-wallets already stored information into a payment form.
Digital wallets (cont.)
If the e-wallet service is offered by a third party company then information will usually be stored on the third party website and automatically called when the consumer wishes to pay with that method on a participating website. Although there are possible issues with using e-wallets, there are security concerns about the storage of financial information on a consumers computer or an even bigger concern information held on a third party website. An advantage to a consumer using an e-wallet is the user can avoid having to enter payment details on online payment forms, while at the same time eliminate the need for the merchant to record the consumer's details. This for some people may be a more favourable approach to online transactions as some people don't wish to give out personal details to a number of online services. This type of payment method being accepted on an e-business website would interest those people as other websites may not offer this type of payment method thus losing potential custom.
Business to business payment methods
When usually large companies partake in electronic financial transactions they may use Electronic Data Interchange (EDI) systems to transfer bills and requests of payment then the payments will be transferred between bank accounts using electronic fund transfers (EFT) systems. This term can also be defined as automatic funds transfers.
EDI on the internet is the most effective way for business to business trading and makes EDI available for use by many companies large and small, many companies use EDI as all that is required is a computer with internet capabilities and no other special requirements, as the internet offers access to companies all over the world at no extra communications costs, this makes EDI a popular choice, an example of this type of payment method is bacstel-ip or otherwise known as BACS.
Business to business payment methods (cont.)
Banker's automated clearing system (BACS) is ideal for making regular payments to regular customers or clients. This payment method is usually favoured for business to business (b2b) transactions with regular customers.
BACS is usually incorporated into an online banking system, preferably with accounts that can be set up to make regular automated payments to others. This would mainly benefit a company in two ways, a business with regular suppliers could set up an automated payment e.g. monthly, thus saving time and also keeping important records for financial reference. The other main benefit is receiving payments automatically directly into the bank account from regular or business customers.
Other advantages of BACS is the reduction of time and the cost of making bulk payments, as payment through the postal service can take time and suppliers may be apprehensive to send goods before receiving the payment. Payment by credit card for example would mean the company may incur cash handling charges for processing the payment from a third party credit card company before the payment is received by a supplier. Credit card companies would also charge an APR for use of there card, this would not be cost efficient for the company.
With an automated payment service integrated into the company, this will free up staff from writing cheques and more attention can be paid towards the companies cash flow, thus helping monitor financial aspects of the company and improving financial control, reducing the risk of loss and late payments.
The benefit of BACS outlined:
No extra cash handling charges.
Avoids human error.
Payments can be made later in the day.
Can be automated.
Accepted by most banks worldwide.
Reduces the risk of lost or late payments.
Fraud proof.
Accurate financial records can be kept.
Manages cash flow.
Reduces time spent by staff authorising payments.
