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Electronic Commerce Architecture Series

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Disadvantages vs Advantages of Electronic CommerceAuthor
  1. The buyer and the seller never see each other. Neither can watch the other's face as the customer browses products. It isn't easy to offer to help a customer. Seller never hears customer's objections to products. Selling becomes passive. This alone violates an important principle of salesmanship. If significant human interaction is required to complete the transaction, the transaction may not even be possible under eCommerce
  2. A computer program acts on behalf of the seller. In some scenarios -- web services, for instance -- a different computer program represents the buyer. In some versions of web services, a third computer program helps the buyer and the seller find each other. Imagine a computerized dating service that introduces computer programs to each other! That is what UDDI -- Universal Description, Discovery and Integration Service -- does. Let's take this one at a time.
    • A computer program that acts on behalf of the seller. To be useful in today's world, this computer program has to
      1. Give the customer a way to select a product
      2. Collect payment
      3. Arrainge product delivery
      All of the above turns out to be a lot harder than it sounds. And it has to work 24 hours a day, seven days a week. The cost of this computer program ranges from $10,000 (US) to $100,000,000 (US). Most international corporations will spend $10,000,000 to $50,000,000 for this computer program
    • The computer program that acts on behalf of the buyer. This software is just being written. This kind of software is one part of something called web services. It is only practical when the buyer knows with absolute certainty what he or she wants. For example
      • A hospital wants to buy a certain size pillow case.
      • A school needs a certain size light bulb.
      Cost for this computer program ranges from $10,000 (US) to $100,000 (US)
    • The computer program that matches buyer with seller -- UDDI. For all practical purposes, this software has not yet been written except in research projects.
    The cost of buying these computer programs far exceed anything that a small business can afford. The skills needed to write such a program may be beyond the skills of a small business.
  3. Increased possibility of fraud. Buyer and seller never meet each other. The transactions are done (for all practical purposes) by robots acting on behalf of humans. Here is a rough sketch of the disadvantages.
    • Almost all of the ways we humans identify each other depend on somebody seeing somebody or somebody vouching for somebody. Buyer and seller never meet. Not directly. Not indirectly
    • It is not easy to prevent malicious behavour in electronic commerce. The following things contribute to this
      1. The difficults of establishing identity (see above)
      2. The fact that almost all electronic commerce has large chunks of plain text flying around public data networks. Almost every field of data in those plain text packets can be falsified. Any normal high school student can learn the necessary skills to do this in less than a week using tools available on any home computer.
    • Even the encrypted data is unencrypted, examined and reencrypted several times as it travels between buyer and seller.
  4. Economic and social dislocations. Not all populations will develop the technical skills needed for electronic commerce. Not all populations will have the cash to develop ecomerce. Not all populations will have infrastructure that can support electronic commerce. These populations may experience severe unemployment. They may be displaced entirely

Arthur Kevin McGrath


September 13, 2005


The author is an engineer with the consulting firm, Contract Engineers. He has consulted and lectured extensively since 1987 about the infrastructure that makes electronic commerce possible

Photograph of the author


For anything involving security issues on the Web, Kelvin Lawrence is about as good a reference as you can find. He is IBM's Chief Technical Officer for Emerging Internet Standards. This is one of many presentations Kelvin has made on the topic of electronic commerce security. Security issues article

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