E-COMMERCE

E-Commerce

E-Commerce

E-commerce is the practice of buying and selling products and services over the Internet, utilizing technologies such as the Web, electronic data interchange, email, electronic fund transfers, and smart cards. Global electronic commerce has exploded in recent years. According to O'Reilly & Associates, worldwide business access to the Web is expected to grow to 8 million by the year 2001. This growth, coupled with rapid changes in information technology and communication, is having a profound impact on business and the workplace. Increasingly, the use of e-commerce is becoming a condition of trade for the manufacturing and retail industries and is imperative for all industries striving to maintain a competitive edge.

The impacts of e-commerce on the workplace are numerous; The Internet provides access to an electronic global marketplace with millions of customers, operating on a 24/7/365 basis. The increasing availability of sophisticated Web tools allows companies to eliminate, re-engineer, and automate business practices, thereby providing a more cost effective, time-efficient manner of conducting business. In addition to these positive changes, some challenges arise. As the information technology profession continues to expand, personnel in the industry are increasingly in high demand, causing a work shortage crisis for many employers. In addition, "cyber law" is still a relatively new discipline, with the legal ramifications of e-commerce still be explored.

E-commerce entered a new era when President Clinton signed the Electronic Signatures in Global and National Commerce Act into law June 30. Considered the most significant e-commerce legislation Congress passed this year, the measure presents both challenges and opportunities for credit unions. The law legitimizes the place of the Internet and other forms of electronic transactions in the future of credit unions and other financial institutions. Most of its provisions take effect Oct. l, 2000.

The strength of the law is that it gives financial contracts signed online the same legal weight as the pen-on-paper variety-with a few exceptions-and thus removes a major impediment to the development of a full-blown e-commerce economy. Without this legislation, the Internet age would be significant just for its ability to provide information rapidly and broadly. Recognizing electronic contracts, signatures, and disclosures will allow the online consummation of most forms of commercial activity, and may eventually lead to a significant decline in brick-and-mortar facilities. In fact, it's safe to say that most businesses aren't fully prepared to take full advantage of their new opportunities for "electronic contracting."

Here's an important point: this legislation doesn't make all contracts with electronic signatures legally binding. The law allows the use of electronic signatures and disclosures where writing is required, subject to certain requirements and exceptions, otherwise, all the usual issues that relate to the validity and terms of a contract, or compliance with the law, remain the same.

The act specifically avoids endorsing any particular hardware or software. It is technology neutral. Congress is leaving it up to computer scientists and engineers to find the best way to conclusively connect an electronic signature with a specific person. This will be the next big challenge in electronic ...