Interview between businessmen

DOING BUSINESS ON THE INTERNET: OPPORTUNITIES AND PITFALLS by 1Kadiri Kamoru Oluwatoyin,2 Alimi Maryam Odunola and 3Bilal Taye 1, 2,3 Federal Polytechnic, Offa, Nigeria, Department of Electrical/ Electronic Engineering

1 Groningen Bimolecular sciences and Biotechnology Institute, Zernike Institute for
Advanced materials, university of Groningen, The Netherlands. Corresponding e-mail:

The advent of the Internet has increased the sales of product positively. Doing business on the internet referred to as E-business is beneficial; however, its limitations need acknowledgement, as well. This paper showcases the opportunities and pitfalls engulfed in doing business on the internet.

KEYWORDS: Internet, e- business, opportunities, pitfalls, e- commerce

E-business is a colossal term encircling the diverse business processes that intend to amalgamate the vendors or traders with the consumers and suppliers using the Internet. The entire process of setting up a website, helping the prospective customers navigate through the website, showing them the available products, offering discounts and vouchers and doing everything possible to woo the prospective clients and converting them into customers, comes under the purview of e-business.
E-commerce, on the other hand, is a subset of e-business and refers to online transactions that can be accounted for in monetary terms. For instance, accepting credit card payment for products sold to consumers or making payments for shopping online are examples of e-commerce. In other words, e-commerce refers to the last stage of e-business, which involves collecting payments for the goods sold by the business firm.

• Marketing & promotions
Using the web to market products guarantees worldwide reach at a nominal price. Advertising techniques, like pay per click advertising, ensure that the advertiser only pays for the advertisements that are actually viewed.

• Affiliate marketing
Customers are directed to a business portal because of the efforts of the affiliate, who in turn receive a compensation for their efforts meeting with success has emerged on account of e-business. Affiliate marketing has helped both the business and the affiliates. Firms have managed to use cost-effective online advertising strategies to their advantage.

• Better Customer Service
E-business has resulted in improved customer service. Many a time, on visiting a website, the customer is greeted by a pop-up chat window. Readily available customer service may help in encouraging the customer to know more about the product or service. Moreover, payments can be made online, and products can be shipped to the customer without the customer having to leave the house.

• Curtailing of Transaction Cost
The nature of online business is such that, the costs incurred for every transaction to go through smooth and sound, there is no acting middleman. Websites are sufficiently loaded with directions to facilitate stress-free transactions. Simple and succinct instructional tabs, generally, save the potential buyer from predicaments of any sort. The mode of payment is predetermined, promising security to the customer.

Thus, online payments are a no-ho-hum affair. All that you are left with, as the proprietor of your online business, is to download the requirement order and ship it. This demands effort, too; however, the toil is far less than a tangible business profile.

• Overhead Costs Are Reduced
An E-business, essentially, is independent of costs that are incurred due to business having a physical entity. Utility bills and other expenses are manageable. You also cut back on costs incurred for hiring personnel and retaining them with competitive incentives topped with abundant facilities. Running an e-business is highly convenient as the proprietor does not require rent another site to execute the business.

• Sectoral Limitations
The main disadvantage of e-business is the lack of growth in some sectors on account of product or sector limitations. The food sector has not benefited in terms of growth of sales and consequent revenue generation because of a number of practical reasons, like food products being perishable items. Consumers do not look for food products on the Internet, since they prefer going to the supermarket to buy the necessary items as and when the need arises.

• Costly E-business Solutions for Optimization
Substantial resources are required for redefining product lines in order to sell online. Upgrading computer systems, training personnel, and updating websites requires substantial resources. Moreover, Electronic Data Management (EDM) and Enterprise Resource Planning (ERP), necessary for ensuring optimal internal business processes, may be looked upon, by some firms, as one of its disadvantages.

• Question of Safety
With the world beguiled by the Internet, it’s a fat chance that you are not one among the aficionados. The Internet is second to none, not to oxygen even, to say the least. Well, one breathes Internet. Shoppers act live wires when it comes to online pick and pay. However, with far and many pacing about, there are a few, who twitch at the mention of online payment. Instances of dupery have no intentions of nailing up anytime soon, and pseudo sites merrily mushroom. All what customer can do, is remain in a state of doubt.

• Data Security
To carry out online transactions, the websites ask for your email address and other contact details. Customers brake at the mention of providing personal details, lest defiling of some nature occurs. Besides, certain sites have a complicated operational structure. Thanks to them, hackers have a job! They fiddle with accounts; meddle with important files, and corrupt data. This, certainly, cannot be termed ethical hacking! Viruses metastasize every second damaging the database, sometimes awarding disastrous repercussions, too.

• System Upgrading
Once a system is developed, the responsibility of ad hoc upgrading at intervals follows suit. If this does not happen, the site turnover would be poor. To improve site performance and tow in a good share of online customers, keeping up with the advancements is pivotal. Though, some sites may find doing this an unnecessary feature.

• Momentary Intangibility
No matter what e-business may try, their chances of selling products like furniture and appliances successfully, are bleak. Unless a buyer has the liberty to splurge the kitty, the ‘E’ sector fights a battle; it absolutely isn’t a part of. For instance, if you are planning to buy a sofa set, you would want to sit on it, get the feel of the upholstery used, the finish, and what have you! An online furniture bay, by no means, can consider a proposition like this one. It is better to accept that, there, indeed, are certain things not meant to be bought online due to the spatial creep; for the rest there is e-transaction!

The common features fall generally into the following categories:

• Transactional (e.g., performing a financial transaction such as an account to account transfer, paying a bill, wire transfer, apply for a loan, new account, etc.):
 Payments to third parties, including bill payments and telegraphic/wire transfers.
 Funds transfer between a customer’s own transactional account and savings accounts.
 Investments purchase or sale.
 Loan applications and transactions such as repayments of enrolments.

• Non-transactional (e.g., online statements, cheque links, cobrowsing, chat):
 Viewing recent transactions.
 Downloading bank statements, for example in PDF format.
 Viewing images of paying checks.

• Financial Institution Administration.

• Management of multiple users having varying levels of authority.

• Transaction approval services.
Features commonly unique to e- commerce include personal financial management support, such as importing data into personal accounting software. Some online banking platforms support account aggregation to allow the customers to monitor all of their accounts in one place whether they are with their main bank or with other institutions.

However, this paper presents a short review of the advantages and disadvantages of internet banking in order to withdraw some main points based on which a reader or future online banking customer can understand.

Many banks have begun to offer customers the option of online-internet banking, a practice that has advantages for both all parties involved. The convenience of being able to access accounts at any time as well as the ability to perform transactions without visiting a local branch, draw many people to be involved. Some of these opportunities include:

• Customer’s convenience
Direct banks are open for business anywhere there is an internet connection. They are also 24 hours a day, 365 days a year open while if internet service is not available, customer services is normally provided around the clock via telephone. Real-time account balances and information are available at the touch of a few buttons thus, making banking faster, easier and more efficient. In addition, updating and maintaining a direct account is easy since it takes only a few minutes to change the mailing address, order additional checks and be informed for market interest rates.

• More efficient rates
The lack of significant infrastructure and overhead costs allow direct banks to pay higher interest rates on savings and charge lower mortgage and loan rates. Some offer high-yield checking accounts, high yield certificate of deposits (CDs), and even no-penalty CDs for early withdrawal. In addition, some accounts can be opened with no minimum deposits and carry no minimum balance or service fees.

• Services
Direct banks typically have more robust websites that offer a comprehensive set of features that may not be found on the websites of traditional banks. These include functional budgeting and forecasting tools, financial planning capabilities, investment analysis tools, loan calculators and equity trading platforms. In addition, they offer free online bill payments, online tax forms and tax preparation.

• Mobility
Internet banking also includes mobile capabilities. New applications are continually being created to expand and improve this capability or smart-phones and other mobile devices.

• Transfers
Accounts can be automatically funded from a traditional bank account via electronic transfer. Most direct banks offer unlimited transfers at no cost, including those destined for outside financial institutions. They will also accept direct deposits and withdrawals that the customer authorizes such as payroll deposits and automatic bill payment.

• Ease of use
Online accounts are easy to set up and require no more information than a traditional bank account. Many offer the option of inputting the customer’s data online or downloading the forms and mailing them in. If the customer runs into a problem, he has the option of calling or e-mailing the bank directly.

• Environment friendly
Internet banking is also environmentally friendly. Electronic transmissions require no paper, reduce vehicle traffic and are virtually pollution-free. They also eliminate the need for buildings and office equipment.

E- commerce seems like an obvious choice to leave the hassles of traditional money management behind in exchange for it. However, there are potential problems associated with banking over the internet of which customers may not be aware. Consumers need to weigh the advantages as well as the disadvantages of internet banking before signing up. Some of the disadvantages of internet banking are transaction issue, insecurity and service issues.

E-business does have its set of opportunities and pitfalls. However, eventually, every business be it partially or completely has to change its modus operandi, and adopt e-business practices in order to ensure survival and success.

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