Essay on The E-Commerce Reforms in Developing Countries

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Essay on The E-Commerce Reforms in Developing Countries

The E-Commerce Reforms in Developing Countries

In order to bring the same level of usage of the internet and e-commerce reforms in developing countries as it is in developed countries, there is the need to address regulatory, economic as well as social issues. It is easier to make consumers realize eCommerce benefits if the political and regulatory barriers are overcome.

The above-mentioned barriers are easier to overcome as compared to socioeconomic barriers. From previous literature, it is evident that the primary factors negatively affecting e-commerce adoption and growth are low internet usage, high costs of using the internet, inefficient delivery systems, and low penetration of electronic payment modes such as credit cards.

These factors are critical in relevance to developing economies. It is clear that there is a need for a mechanism that supports electronic payment which means there needs to be a strong link between the financial institutions and eCommerce development if the eCommerce business is to be promoted.

Such an electronic payment system needs to be efficient in order to facilitate the adoption as well as diffusion of eCommerce. Previous literature also reveals that there is a strong need for high security so that clearance and authorizations can be trusted. The method of cash on delivery that is utilized by many eCommerce businesses is not effective when the business is online.

Electronic Payment System

The need for an electronic payment system is evident in the case of business-to-business transactions if cost-effectiveness, as promised by the service provider, is to be achieved.

Another area requiring attention is the security of financial transactions where liability must be clearly identified and practiced. The use of credit cards varies in the countries as in China; consumers avoid audit trials possible through credit cards.

On the other hand, in Taiwan, consumers fear theft of identity and unlimited liability in case of fraud which makes them unwilling to use a credit card for online internet transactions.

Another obstacle to eCommerce business success is the absence, of any central bank or financial institution payment mechanism that can monitor eCommerce transactions in order to ensure full efficiency.

In order to allow on-time delivery through eCommerce, it is necessary that the transactions are authorized in real time between the payment institution and the internet business. There is a comparatively, lower institutional risk if the time between authorization and actual payment is shorter.

Lastly, there needs to be an effective delivery system that can enable faster development of eCommerce. This is because the prime benefit of eCommerce is speed and thus just-in-time processing is the key to success. If there is an absence of efficient physical delivery and distribution system, then eCommerce cannot sustain itself.

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