ECOM TODAY Vol.1
http://www.ecom.or.jp/eng/ecom-today/no1/index.htm

Information technology has been making breathtaking strides for some years now. That trend, together with the popularization of the Internet and other open network services, has in turn brought sweeping changes in practically every facet of life and business endeavor-from industry and the home to the public sector, and in such areas as health-care and education.

Electronic commerce is fast becoming a catchword for the emerging Information Age. And, as a promising force for economic growth and improved conveniences for consumers, there is now strong hope that electronic commerce will take root and become widespread.

However, many hurdles stand in the way. On the technical side, and particularly in the arena of consumer-oriented services, we still face questions concerning standardization, interoperability, and security, as well as a need for friendlier communications gear and systems that anyone can readily use. On the institutional side, the issues range from privacy and consumer protection to the exploration of new rules and guidelines for business transactions and settlements.

On that understanding, the Electronic Commerce Promotion Council has been coordinating various pilot studies and testbed projects to address these technical and institutional issues. Our ultimate goal in that undertaking is to assist in the creation of common platforms that will allow consumer-oriented forms of electronic commerce to take root and thrive.

This is the inaugural issue of our new journal, ECOM Today. It is designed to broadly publicize our activities and the findings of our investigative activities to our membership and to the general public. We are hopeful that all readers interested in electronic commerce will find ECOM Today a valuable source of information and insight.

December 1996

Hiroshi Ikawa, Chairman

Electronic Commerce Promotion Council of Japan

source: http://www.ecom.or.jp/eng/ecom-today/no1/p01.htm

Katsuhiro Nakagawa

Director-General, Machinery and Information Industries Bureau Ministry of International Trade and Industry

Though the Japanese economy on the whole has been picking up in recent months, conditions in the job market remain somewhat bleak. Indeed, there is still concern about the trend in industrial hollowing and lost competitiveness due to high cost structures, particularly in the retailing and distribution sectors. It now seems crucial that Japan move swiftly to achieve sweeping reforms in its economic structure if it is to register smooth and steady growth and continue creating jobs for its citizens in the century ahead. In other words, at the societal level, we must take action to overhaul those systems and structures now showing signs of institutional fatigue. In the meantime, Japanese corporations will face the pressing task of re-evaluating their real international competitiveness and accordingly taking steps to boost their productivity and efficiency through accelerated drives in operational and organizational re-engineering.

The government has vowed to continue doing everything it can to assist this structural transition: for instance, by pursuing additional headway in the deregulation process, and fostering an environment conducive to the cultivation of new business ventures. The government is also well-aware of how pivotally important it will be to move forward quickly with the adoption, strategic adaptation, and utilization of advanced information technologies across all sectors of the economy, and on that basis nurture a new electronic commerce (EC) industry. Combined with steps to overhaul business processes, the introduction and deployment of cutting-edge electronic information technologies in design, development, production, sales, administration, and other corporate areas of endeavor can be expected to cut business overhead, improve the transparency and efficiency of retailing and distribution operations, and expand the scope of business activity with the creation of open networks. Manufacturing processes will likely demonstrate other benefits: e.g., in the form of shorter lead-times, improved efficiency, and additional cost reductions.

A consumer-led revolution of precisely this kind in each and every business sector and commercial format will be crucial in helping Japanese industry sustain its competitiveness in tomorrow's international marketplace. Needless to say, this in our view could also serve as a driving force for the fertilization of an array of entirely new industries outright.

Such an awareness prompted MITI to obtain budget appropriations totaling 31.75 billion Yen last year for the promotion of electronic commerce projects. That should provide enough funding through fiscal 1997 for a number of slated pilot projects that will address and hopefully help surmount certain technical and institutional issues. These projects will serve as testbeds for various technologies that promise to provide the interoperability essential for common EC platforms. However, their importance actually extends beyond that. Namely, they can also be expected to cut the strategic investment risk faced by the private sector, thus "pump-priming"

investments in information technology by companies of all sizes, and in turn spurring desired reforms in industrial structure.

In particular, electronic commerce will make it possible for producers and consumers to conduct key stages of a merchandise transaction over the Internet or through other network channels: from advertising to sales to settlement. In our view, that will help boost the efficiency of merchandising, bring about needed structural reforms in the distribution and retailing sectors, and add to the overall benefits enjoyed by consumers. MITI has therefore earmarked 10 billion Yen in funding from the first supplementary budget for a series of testbed projects aimed at developing and testing the technologies essential to making EC a reality. Those projects will be farmed out to a consortium of 19 firms. Ultimately, MITI plans to conduct one of the world's largest testbed undertakings, with the participation of over 500,000 consumers and more than 350 individual companies.

As a participant in the drive to establish common platforms for EC technologies and regulatory frameworks, the Electronic Commerce Promotion Council (ECOM) will assume a valuable role in coordinating the 19 projects currently planned, and serve as an open forum for the dissemination of project findings throughout the business community at large.

ECOM is now engaged in an intensive study of various technical and institutional issues. In addition, it is reportedly striving to build closer working ties with a number of foreign organizations in the field. In the process, though, it will face many hurdles that must be overcome.

Utilizing the Internet as a medium for electronic commerce presents several challenges. For one, it will be crucial to perfect technologies essential for user authentication, data integrity, and confidentiality.

Second, to offer satisfactory content, it will conceivably be necessary for multiple providers to pool the different forms of information in their possession, develop the technical infrastructure for electronic interaction with their customers, and otherwise prepare the technical foundations for the delivery of a varied array of appealing information products and services.

Third, to more effectively exploit the attractions of electronic commerce, it will be vital to devise suitable mechanisms not only for the consummation of business contracts, but also for transaction settlements. Studies concerning protocols for that particular purpose will therefore be paramount. This goal, in fact, will also demand improved security and new technologies capable of maximizing the conveniences of smart cards.

Solving the technical issues alone, though, will not be enough. To make electronic commerce a viable reality, it will also be necessary to examine certain institutional or regulatory factors: for instance, ways of adapting the practices and legal frameworks for conventional forms of commerce to the world of cyberspace. In exploring such questions, investigators will likely find it essential to adopt an emphasis on international commerce and the protection of consumers and intellectual property rights.

Running an effective network-based business for consumers will demand that providers fully exploit the technologies inherent in the Internet, differentiate their market segments from those catered to by conventional forms of mail-order or store-based sales, and, above all, offer a set of goods and services that consumers actually find appealing. To this end, though, it will be vitally important to pursue a comprehensive study of the issues outlined above and develop the infrastructural essentials with international harmonization and consumer preferences firmly in mind.

The investigation into these technical and institutional issues will count as a pioneering step toward the goal of making electronic commerce an everyday reality for society at large. The search for solutions, however, will at times be a difficult process, demanding a consensus-driven, step-by-step advance into largely uncharted territory. Yet now that we stand on the threshold to the age of electronic commerce, I am confident that our explorations under the aegis of this EC project, together with the discussions and debates pursued by each ECOM working group, will be of immense value in bringing electronic commerce into the real world.

The currently booming popularity of the Internet has familiarized people in many walks of life with the ins and outs of computer networking. However, that trend could easily foster the impression that the promotion of electronic commerce itself is little more than a passing fad. However, as pointed out earlier, MITI's position is that the introduction and use of advanced electronic information technologies in all sectors of the economy will be essential to the goal of structural reform.

We are hopeful that everyone involved in ECOM and the EC projects will help sustain the intensive level of discussion and debate and push forward with work to lay the foundations for electronic commerce. MITI is determined to put together an array of measures aimed at stepping up the promotion of electronic commerce as an integral part of practically every economic activity.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p02-03.htm

ECOM Roundtable Discussion:

Electronic Commerce in Japan

-Nov. 20, 1996, at the ECOM Conference Hall-

Moderator: Shigeki Suzuki ECOM Secretary-General

Participants: Hisashi Yoshikawa Director, Information, Computer, and Communications Policy and Planning Office, Machinery and Information Industries Bureau, MITI

Toshio Gomi Research Director, ECOM Working Group on Common Security Technologies

Akitoshi Yonekura Research Director, ECOM Working Group on Certification Authority

Mikio Aoshima Research Director, ECOM Working Group on Electronic Settlements

Establishment of the Working Groups

Suzuki: This roundtable discussion has been called together in celebration of the inaugural edition of ECOM Today. Our participants include the research directors of three ECOM working groups and Director Yoshikawa, one of our mentors from MITI.

I would like to begin by having everyone discuss the circumstances leading up to their taking positions at ECOM and some of the difficulties they faced in the process of setting up their working groups. Mr. Aoshima, let me start with you.

Aoshima: Just prior to my transfer? Before I came to ECOM I worked for about four years with the Japan Credit Card Association. During that stint, I had the task of leading infrastructure projects for card online systems. One association rule, though, is that staffers on loan be returned after four years. Just before my time there was up, I was informed that my next assignment would be with ECOM. I knew that position would be strongly focused on settlement-related issues, so I was quite happy to come.

Suzuki: I recall there were openings for 60 to 70 members in your working group, which is rather high. I imagine it must have been tough getting something that large up and running.

Aoshima: That it certainly was. Right now, it consists of 60 members, including 56 companies and four organizations. Including my own team members, the total works out to about 70. In any case, we had almost 60 members from the very start. Sometimes I wonder how anyone can really manage a group that big.

In fact, we initially thought about splitting our group into two: with one on credit and the other on noncredit topics. That still would have left 30 or more members in each.

Defining our ultimate goal has been the hardest thing to deal with. In other words, what sort of findings or results should we be aiming for? The common view is that contracts should be the prime foundation for electronic commerce or electronic settlements in particular. So, my first assumption was that we would have to come up quickly with a set of standardized contract guidelines.

The operational schemes for credit-based transactions seem straightforward enough and should work provided they are properly adapted for a new role in electronic commerce over the Internet. I was concerned, though, whether it would be possible to seal credit-related contracts this way in a timely fashion. This is extremely tough, as has been learned by other electronic-money ventures, including various banks that have put their own electronic settlement systems online. There happen to be a number of contract provisions for bank POS-based or prepaid-card-based transactions. My view is that if we study these, we should be able to determine where the problems lie with respect to electronic commerce, and in that respect, approach our ultimate goal.

There are also many potential contract variations for credit transactions. What we needed to do first is come up with a version that can serve as a basic model.

Suzuki: I see. Mr. Gomi, what about your situation?

Gomi: I was a systems engineer for a production line. My last two years in that position, I was involved with a Chinese project and spent quite a bit of my time away from Japan. In any event, the news that I would be transferred to ECOM came as something of a surprise. I was familiar with the notion of electronic commerce, but after a little background investigation I realized this would be a big assignment. But in another sense, I felt that the Internet business was the best place a computer company could be these days.

Our working group on common security technologies is a highly diverse mix of 40 members. I knew I had a lot of studying to do, but I was lucky in that the sub-research director for our group is a highly principled man who also happens to serve as research director for an other working group. Confiding with him gave me the self-assurance that I could get my job done.

Suzuki: Mr. Yonekura, could you give us some background on how things worked out for you?

Yonekura: Before teaming up with ECOM, I worked for about five years away from home, as a computer systems engineer in Kyushu. My prime function then was to provide system support to customers in the manufacturing and retail trades. About the time my five years away had run out, I received orders to return, but at that time no one mentioned the name ECOM. All I knew was that I was going to be given a new assignment in the field of electronic commerce.

In January, I was finally told that my new job would be with ECOM. I took up that post on April 1. Granted, I was not very familiar with the workings of electronic commerce itself, so, for about three months before I was reassigned I had the opportunity to hear a lot of horror stories and in the meantime decided to do some self-study. While that did apparently give me a certain degree of grounding in the basics, anxiety attacks told me I needed to do more, especially since I would be working with a number of people who had been researching this field for some time, and who already commanded a substantial amount of technical expertise.

My first task was to decide what our working group on certification authority (CA) would actually be doing. However, I was extremely fortunate in that I had valuable assistance from MITI. After all, given that there were no CAs in Japan yet, we needed some guidelines or pointers on where our working group should be focusing its attention, and on ways of setting such CAs up in Japan. Eventually, CAs can be expected to debut. MITI stressed that frameworks for cross-certification would be absolutely essential, and that bit of advice helped us decide what our mission would be rather early on.

I am aware that we face some ups and downs ahead, but right now I am simply relieved that we managed to get the group on its feet.

Suzuki: Next I want to hear from you, Mr. Yoshikawa. I and others in the secretariat engaged in preparatory work along with your predecessors, Mr. Ishiguro and Mr. Ihara, beginning near the end of last year. Could you fill us in on the details leading up to your assignment?

Yoshikawa: Well, there wasn't really that much to it. I previously served as director for International Affairs of the Petroleum Department of MITI. The orders for my current position were issued June 11, I recall, but I was off on an assignment in the Middle East up to the 10th.

Since that job had already been going for around two years, I figured something was about to change, but I had not the faintest idea how.

Besides, the information industry was something new to me, and on top of that I was quite convinced that MITI's Machinery and Information Industries Bureau would not be a place for virtual neophytes. So, needless to say, I was quite surprised when I heard where my next assignment would be.

Unlike the rest of you, I really am astonished to be here, and I still feel as though I am trying my best merely to catch up with a train that's already running at full speed.

Working Group Objectives and Findings

Suzuki: At this point I would like to turn our discussion to working-group objectives and findings. Mr. Aoshima, I will start with you again.

Aoshima: Our group has many members representing a diverse range of professional fields. My first impression was that it would therefore be extremely difficult synchronizing our different views on ECOM or electronic-money issues.

Yet everyone in our group is on equal terms, and all have adopted a basic position of respect for the views of their peers. Still, given the limitations of time, it is essential that we have proposals from the secretariat, whether hypothetical or conditional, and on that basis try to hammer out something useful. This demands that working group directors assume a leadership role. We have a lot of talented members in our group, hence my feeling is that we will simply have to get accustomed to working with each other within the first half-year or so. I have worked with a number of groups in the past, but my impression with ECOM is that everyone is highly talented and professional at what they do.

Exploring settlement-related issues forces one to consider all the processes involved in electronic commerce. On the technical side, encryption and authentication are the key words.

Suzuki: Could you explain in laymen's terms the contracts your group has been studying?

Aoshima: Currently we are looking at contracts for the parties involved in electronic settlements. Contracts are in one sense the essence of a regulatory framework. In other words, one question has to do with their transparency, that is, whether they expressly deal with certain problems. The problems can be of a regulatory, legal, or procedural nature, not to mention technical. We believe we have worked out a set of contract terms that in this respect should serve as a good starting point for future efforts. Of course, if that were our only achievement, it would not be saying much. Hence, we have also engaged ourselves in the task of identifying related issues and putting together recommendations for their solution.

For instance, in terms of procedural approaches, we have shown some success in finding ways to promote environments conducive to business, facilitating the issue of cards, and developing transaction procedures that are easier to understand. From a macroscopic perspective, there are still restrictive sections of the legal code that need to be addressed and rewritten. On the other hand, we also have to consider how things will work as the laws currently stand. So, in the initial stage, our mission is to come up with a "version one" contract that is suited for use in a climate shaped by the existing legal constraints. Next will come "version two", which we hope will better serve as our model of what a contract should be.

Yoshikawa: Then, in the process of moving from version zero to version one to version two and so forth, you concentrate on ways of cultivating the market or fostering a more favorable climate for business-as you indicated a moment ago-thereby setting the stage for the next version, right?

Aoshima: That's it. We now have teams engaged in market research, trying to gauge how far behind Japan lags in communications infrastructure, or the extent to which electronic commerce has become the key mode for modern mail-order business transactions. We are also looking at potential IC card-based formats, and in that context have been contemplating such factors as suitable terminal installations, whether existing credit-authorization terminals can be used, the number of POS terminals required, and even questions about card use with public phones or vending machines. We are gathering data on these fundamentals and intend to investigate them further.

Suzuki: Mr. Gomi, could you tell us something about the activities of the Working Group on Common Security Technologies?

Gomi: Basically, we are trying to come up with yardsticks that will help us better gauge the security of systems for electronic commerce. Global standards for security have already been set up, of course, and Japan is party to those international frameworks. To date, though, these standards have only been applied to computer centers. When financial transactions are at risk, though, top management has an obligation to demand security, and in such cases that security will be made as tight as possible to keep out anyone and everyone who has no business there. The iron rule is to make security rock-solid, and explicit yardsticks of security for that purpose do exist.

On the other hand, there is less certainty about the notions or measures of security for settlements conducted over open networks that practically anyone can access. Though everyone understands the need, opinions diverge on the issue of how those measures or yardsticks should be made more explicit in practice. That has prompted us to adopt a case-study approach, for instance, by looking at examples of credit transactions or IC card-based electronic-money transactions, trying to shed light on the security risks they face in real life, and coming up with ways of countering that risk. In other words, we have examined case studies of this kind, reached a certain degree of consensus on tangible security measures, and are now preparing for the next stage.

Before coming to ECOM, I worked on various projects with teams of several hundred individuals. Usually, the management process in those undertakings moved in vertical steps from reporting to contacts to consultations. Since I have been accustomed to that for 20-odd years, the horizontal or flat power-sharing approach taken by this organization was something new. Research directors, sub-research directors, and other members in ECOM working groups are all on equal terms-there is no rigid vertical hierarchy. Furthermore, no group has more priority or authority than any other, and the general climate is one of candidness. On the other hand, the task of coordinating the different groups and ECOM activities in general is something that seems to deserve more attention.

Suzuki: That's true. After all, you have some 30 or so individuals who have never met, all suddenly sitting down together, and bringing in their own, different corporate backgrounds. We have several testbed projects going now, but the ECOM secretariat is almost like an experiment itself.

Gomi: I doubt there is any precedent for an amalgamation of this many working groups with as much institutional or technical reach.

Yoshikawa: You just mentioned the task of coordination and charting the direction of the organization at large. That happens to be one of the most important jobs for Mr. Suzuki here, ourselves, and other staffers in the secretariat.

Aoshima: Well, usually you just pick out one goal and rush headlong toward that as fast as you can. This project, though, is so huge in its sheer scope.

Yoshikawa: Yes, the data itself doesn't provide much direction, and the organization here is so flat in terms of power-sharing. At first glance, we might appear to be on rather precarious ground. Even so, our activities have drawn a lot of attention, and there is this productive atmosphere of freedom with tension. On the whole, it seems to me things are moving along quite well.

Suzuki: Incidentally, every day members from various working groups visit the secretariat.

We are extremely grateful that everyone is so hardworking. Many members put up with various inconveniences to come in several times a month, almost voluntarily, and compile documentation for these projects on top of their regular jobs outside. If it weren't for them, our group directors and sub-directors would be in a serious fix. As I've noted before in our newsletters, we should remember to be thankful to our working group members for all their help.

Gomi: We have many meetings to attend, some at the sub-group level, but our members are always conscientious about that. I am really happy to see everyone working so hard together, particularly the leaders and sub-leaders.

Aoshima: I agree. From a member's standpoint, sub-leaders appear to have an especially tough job. For one, they have at least four task forces to look after. Though there are individual leaders for each task force, someone has to manage them, too.

Gomi: Another thing, at least in my case, is our internal system of self-evaluation. None of the yardsticks or criteria my group comes up with will be recognized as such until they have been scrutinized by the project leaders for all 19 testbed projects. Currently we trade views and opinions with those leaders at meetings of the liaison and coordination committee, but in time we will need to step up the level of coordination. I look forward to having everyone's cooperation when that time comes.

Suzuki: Mr. Yonekura, how about telling us about developments with your group now.

Yonekura: My working group has the task of drawing up guidelines for the operation of CAs. Japan has absolutely no model CAs to speak of, and even when we started up, there were few very well-defined CAs even in the U.S. After we began our studies, the undertakings by ISO, the IETF's PKI, and VeriSign Inc. came into clearer focus. Though we now have some models to work with, initially we were clueless on how to set such CAs up.

Our group also has another mission: namely, devising protocols for cross-certification by CAs that are interconnected. So far, we have yet to hear of anyone anywhere actually doing this. While that has excited us about the prospect of coming out with the world's first-ever protocol of this kind, we are still puzzled about the best course of action to follow. By the same token, though, we are delighted to have been given such an interesting theme to tackle, and we believe it will be very much worth the effort.

Fortunately, the leaders and sub-leaders of our three sub-working groups all have extensive knowledge and a passion for work in this area, and I am continually grateful for the advice and pointers they offer. ECOM, of course, puts together our agenda and charts our direction, but if we didn't have these individuals on our team, I suspect we would still be caught up in the early discussion stages and not even have so much as an alpha version of the guidelines to work with. I am especially thankful to our leaders and subleaders in that respect.

Suzuki: I realize everyone has a lot of work to do, but I have been particularly impressed by our sub-leaders and the others who also have core executive functions to perform. Mr. Yonekura, your group seems to have made somewhat more headway than the others in pursuing its objectives.

Yonekura: At the first meeting in May, I told everyone I expected the group to have an alpha version of the CA guidelines ready within four months.

From the outset, I was convinced that I might be expecting too much. I didn't know what to say, or whether we could actually come up with something like that in four short months with such a lack of information and background. The only thing that seemed certain was our deadline. I should credit our group members for the version we finally did put together, even if it was close to two months late.

I suspect we will face an even harder time trying to devise the world's first protocol for cross-certification, but we are all determined to come up with something tangible by next March.

Suzuki: Mr. Yoshikawa, I would appreciate it if you could now relate some of the details-including the requests to ECOM-behind the decision to pursue the EC project on that fast-track two-year schedule.

Yoshikawa: Well, for one thing, I think it reflects the fact that the pace of technological innovation is actually that fast. I concede, as our three group directors gathered here have already testified, that there really was little to work with when the groups were set up, and everyone did indeed have to hit the books and cram in midstride.

On the other hand, there are apparently several reasons for the two-year deadline. One is that the goals are very clearly defined. Another would seem to be that we have a certain level of productive tension driving the efforts of the organization itself. Mr. Gomi noted a few moments ago that the organizational structure is flat and the work atmosphere very amiable, but that things could use a bit more coordination. Granted, the structure is very flat and independent, which I imagine places more of a management burden on the shoulders of Mr. Suzuki here.

From a global slant, I get the impression, as Mr. Gomi also suggested somewhat earlier, that ECOM is now one of the most energetic and most-watched organizations in the EC field. ECOM has brought together professionals representing over 200 different companies and has them pursuing various objectives together within 14 different working-group frameworks. Though they will probably be involved in new themes later on, I would venture that their work already covers most of the themes we can currently think of.

Group directors basically compete in this manner while striving for mutual cooperation and coordination. They and other group members must pursue their work within an atmosphere of tension that stems in part from being in the public spotlight.

Another point, and one that I think was made by Mr. Aoshima earlier, is that leadership is necessary in any case. Yet there has to be a sense of balance as well. These factors seem to have provided an ideal consensus-building atmosphere for this broad-based gathering of so many researchers from different disciplines.

Suzuki: That's one way to put it. After all, one of the founding objectives was to create an open forum for information exchange by people from diverse industrial and professional backgrounds.

Aoshima: Actually, we have plans to put together a set of guidelines based on the discussions and interactions allowed by precisely that kind of forum. The only remaining question will be how to arrange those discussions and integrate their conclusions.

Yonekura: ECOM's cohesion as a whole could come under scrutiny once the working groups have made a certain degree of progress and see their findings carried to the project stage. For instance, critics might find something missing, or question the core philosophy.

The way I see it, we had possible two approaches. One would have been to begin all the working groups in unison, say, around April 1 this year. The other would be to start them after coordinating our perspectives to some extent. Well, we are far beyond April 1 now, and had anyone at the outset asked me about my perspective on CAs I doubt that I would have been able to provide a suitable answer.

So, the point is that most of our work lies ahead. Everyone at ECOM has to stay in contact and work closely with each other even before our working groups begin coming out with their conclusions, not to mention beyond. We also need to hear opinions of our mentors from MITI. Eventually ECOM will face the necessity of demonstrating its focus or concepts for action to the general public.

Suzuki: I was involved in the preparatory stages, and I can state unequivocally that it would have been unreasonable to try and consolidate or coordinate the focus of our working groups in March or April.

Gomi: But we strongly feel the necessity for coordination now.

Suzuki: That's true for the working groups, but we also have the projects to bear in mind.

Yoshikawa: ECOM is an open forum and also a forum for coordination. However, the connection between the working groups and those 19 projects is somewhat competitive in that it depends on the benefits offered by both.

What Is Expected of Electronic Commerce

Suzuki: Next I would like you to share some of your views and opinions on the future of electronic commerce. Feel free to discuss your expectations, misgivings, or any obstacles you see on the horizon.

Aoshima: Though it's not yet that well-defined, I feel certain there is a distinctly Japanese version of electronic commerce emerging. The truth of the matter is that each country has its own traditional set of values. Since the Internet has assumed its role as the common communications medium for electronic commerce, the distinction is basically one of utilization. My impression of the Japanese version is that we will need something to make interfacing easier-say, by having services offered in the Japanese language, or with certain codes or icons. In other words, something has to be done to make interfacing more user-friendly for Japanese consumers, whatever the information or service content.

Currently, the credit-card industry has most of the market for settlement services. However, if smart-card-based electronic settlement systems were introduced, Japan would catch up with Europe and North America almost immediately. There are around 140,000 ATMs up and running in Japan today, which means you can withdraw cash just about anywhere you go, but the service charges for ATM transactions are still too high. That is one reason it seems necessary to come out with alternative online systems that can effectively spur cuts in these ATM-based cost structures. My feeling is that it will be a good idea to promote advances while merging real and virtual services in this way.

Yonekura: I believe the key to triggering a boom in electronic commerce will lie more in promoting barrier-free business opportunities than in cutting costs, as such.

Consumer EC will likely force existing industries to stake their survival on the exploitation of various electronics technologies, but we also have to consider other avenues of market participation, too.

Aoshima: Could you give us examples of other avenues?

Yonekura: I still haven't developed a clear picture about this in my own mind, but basically I feel that EC will have to offer returns for everyone: from manufacturers to distributors, retailers, and consumers. Appearances are important, but appearances alone will not be enough. Granted, we have to have a groundwork for secure transactions, but we also have to think about ways of stimulating other sectors of the market in the meantime.

Suzuki: If there really is a distinctly Japanese approach to electronic commerce, then it can be expected to manifest itself at the consumer level. Japanese have their own patterns of consumption and ways of spending their leisure time; in other words, the culture is distinctively different from what you find in other countries, particularly in the West. That's why a different approach may be necessary if electronic commerce is to catch on and spread in Japan. But we all know that consumers tend to be very conservative and unyielding, whether as individuals or as a group. How can one get them to accept and use electronic commerce? No one is likely to be that enchanted with EC unless it affords benefits that surpass the conveniences available through conventional offline alternatives. And as I see it, unless steps are taken to draw attention to those benefits, consumer EC will not get off the ground.

Aoshima: That's a tough issue. It use to be that markets took shape starting at the upstream end with producers and then worked their way down through each level of the industry to the final consumer. Someone came along and said "okay, that's no good", so then we went through a revolution in the distribution sector. Now we have the reverse: markets are spurred by consumer demand, and the ripple effect spreads back upstream to manufacturers or providers, as the case may be. This is how small-lot multi-product manufacturing caught on, among other things. So, the point is that the future will increasingly see consumers prompt the upstream elements of the market-producers or providers-to take action and respond to their needs with the goods and services they want.

Yoshikawa: Obviously, small-lot multi-product manufacturing and the diversification of consumer needs are two sides of the same coin.

Aoshima: Essentially, it's easier to do or make something when there are reasons for it. It becomes feasible when a customer comes along with detailed requirements and wants someone to fill the bill.

Yoshikawa: I suppose that's why such processes are dubbed "user-driven"

.Aoshima: Do you have a tangible image for a market that's user-driven?

Yoshikawa: For electronic commerce between companies and consumers, that image would likely be shaped by content and convenience. By that, I mean real conveniences and the kind of content available over infrastructure or platforms in the broad sense of the term as studied by ECOM.

Gomi: When I started my work at ECOM, one very important point occurred to me.

In effect, it is essential to bring up and discuss the regulatory issues in many respects, whether they concern credit settlements, bank settlements, the use of smart cards, whatever. Phone subscription and service rates are one issue that has to be addressed soon. Another problem, and one that has already become serious in the U.S., for instance, is that the vast popularity of the Internet has strained available network resources to the extent that E-mail is becoming too slow. This is basically an infrastructural problem that has to do with provider information "pipelines", and it should gradually subside as these resources gain speed or bandwidth.

Once this infrastructural hurdle has been cleared, the focus of attention will shift more toward Japan's readiness to adapt. Since open networks are by definition free from any centralized control, security will be yet another concern.

At the very least, though, electronic commerce will have enough impact to elicit serious changes in the industrial structure. In fact, that is the trend now, and my impression is that questions concerning how strongly EC takes hold in Japan will be extremely important, along with other issues for the future, and far more so than the question of whether Japan will eventually need its own domestic flavor of EC or not.

Suzuki: I think the testbed projects we are pushing forward with now will be a crucial condition for any speculation on the future. Given their potential impact, I believe it essential that they be put to the test and that countermeasures be crafted to deal with any problems that crop up in the process. I think it was a smart choice to decide to run them over a two-year span while we have the world's attention. Yet I wonder how strong the expectations are.

Gomi: Security is a very common issue. Testbed projects are now testing a secure protocol that incorporates extremely advanced authentication and encryption technologies. The fact that it is already being tried out and demonstrating results says a great deal.

Yoshikawa: This is precisely one example of what I mean by a testbed project that has a "pump-priming effect. The point, I believe, is to ask what will happen if such a project is backed by a combination of ECOM studies. On the other hand, as you have already suggested, it seems unreasonable to expect consumer EC in the strict sense to sweep the market and eclipse conventional forms of commerce any time soon. Therefore, perhaps it should be thought of as an entirely new market all its own-at least that's one way of looking at it. This does not have to be a zero-sum game where different business formats vie with each other for limited market share; it can instead be a plus-sum game that allows them to complement each other and expand the overall size of the market itself. In other words, EC should have a stimulating effect on the consumer market.

Japan has to expand the size of its economic pie by structurally downsizing its distribution sector. Roughly speaking, I believe that is a perception we all share.

Aoshima: Back to the testbed topic; my impression is that the customer will have the final say. So, we will probably see some new projects emerge as an offshoot of earlier testbed ventures, as well as others that are allowed to continue on an indefinite basis.

Yoshikawa: When I took up my current post, I was really impressed by the approach that had been implemented here. I mean the idea of limiting ECOM's activities to two years, running it on the basis of a flat organizational structure, and having a dozen or so working groups all address several issues in a synoptic fashion and at the same time. That has riveted the attention of our corporate members and contributed to the productive tension in which ECOM now operates.

In late October I attended an international conference on CALS and had the opportunity to deliver an address on electronic commerce, including developments at ECOM. That topic accordingly received a fair amount of attention, and someone made a comment to the effect that Japanese EC is highly structured. This came within the context of the CALS theme, and it was also noted that the approach in the U.S. had been led by the Department of Defense, whereas in Europe, although there appeared to be no structure at all, they have vitality amid chaos and disarray. I have to say that notion impressed me very much.

Aoshima: Indeed. Personally, I am not that worried about the future of EC. My remarks might seem misleading, but in my view, Japan has its own special climate, and once someone lights the right fuse, the chain reaction can gain momentum rather fast. Our educational standards are high, and we have a reputation for learning things quickly.

That's why I believe we will eventually witness the debut of a "Japanese way" of doing things.

Gomi: I wonder what will provide the critical mass: Internet TV, network computers, mobile communications gear? On the other hand, as the bottlenecks materialize, we may see a gradual slowdown in the delivery of E-mail. Yet once the infrastructural accelerator is revved up high, the business community and Japan had better be prepared to catch the train, so to speak, or face the resulting fallout otherwise.

Suzuki: It would be nice to know in advance what the decisive breakthrough will be, or what it is that is going to set the stage for market liftoff.

Aoshima: In any case, electronic commerce as we know it comprises more intangibles than it does tangibles.

Yoshikawa: Are you referring to content?

Aoshima: Yes, but particularly the notion of what's considered appropriate content. In that respect, I'm curious as to what we will see emerge in the intangible category.

Yoshikawa: You mean services. From Tokyo, Japan as a whole seems quite large. Also, demand differs from region to region for any given service. In terms of development, I feel there will be opportunities for an array of new market segments.

Aoshima: We have emerging service sectors based on networks, smart-cards, mobile phones, portable terminals, and hybrids of everything. Whatever you call them, though, for the most part we are talking about PCs. Plug those all into the Internet and you can expect to see an EC market boom.

Suzuki: That could be. We already have the tools, and they are destined to evolve and become even more advanced, along with the trend toward hybridization. The most important thing is what we plan to do with them.

Aoshima: This is precisely where I think the new markets will enter the picture. I suspect everyone has their own idea as to what those new markets might be. That's why it is so hard at this point to map a competitive market strategy or speculate on ways to expand the market itself, and certainly no one can do that all at once. But, as Mr. Gomi noted a few moments ago, it seems likely that something will come along and provide the critical mass for a market boom.

Yoshikawa: This may sound like a different perspective, but as I see it, electronic commerce must go hand in hand with the business protocols that Mr. Yonekura discussed somewhat earlier. In other words, they are inseparable issues and they must evolve and develop in tandem.

Gomi: The discussion about business protocol re-engineering (BPR) largely has to do with interbusiness electronic commerce, say, over intranets. If the scope of that discussion is widened to include transactions between consumers, though, I would expect that venture businesses will be the ones that come up with most of the neat ideas or hit products.

Suzuki: It's conventional wisdom now that Japan was or still is lagging in the field of electronic commerce. How much truth is there to that observation?

Aoshima: Many smart-card services, for instance, have already been widely commercialized overseas. In that respect at least, Japan is clearly behind.

Yonekura: When our working group on CAs started up, Japan was also clearly behind in that area, too. Japanese delegates delivered papers at the ISO and IETF forums I mentioned earlier, but the impression was that they didn't have anything impressive to say. Conversely, when it comes to absorbing knowledge and molding it into resourceful ideas, Japan is very nimble. We have already caught up in that sense.

That's why I emphasize that everything lies ahead. Of course, there remains the question of what we should be doing to grab the lead. If we succeed in developing an internationally viable protocol for cross-certification, that will put Japan out front. Then we will no longer have anything to worry about and can even hold our heads up with pride.

The real battle will begin once that protocol is actually consumer- or customer-based.

Gomi: When I visited VeriSign, I felt as though I were at a venture outfit or a company caught up in the convulsions of intense growth.

Yonekura: That firms like VeriSign can so easily pop up like that is something that I think testifies to the openness of America's markets.

Aoshima: In Japan, practically all industrial sectors are still dominated by corporate giants. One of the nicer points about electronic commerce is that it will provide immense growth opportunities for any business that has a good idea or product, even if that business happens to be very small. However, institutional forms of support for such business operators will be crucial.

Yoshikawa: If you throw education and personnel training into the equation here, then the U.S. excels in terms of the open networks that now reach into practically every dimension of American life. What is more, there seems to be a clear emphasis on harnessing networked environments for educational or training purposes.

Gomi: One reason, of course, is the extensive scale of U.S. infrastructure. If Japan were to pursue improvements in communications infrastructure, among other things, eventually the process would become self-propelled, unstoppable in fact. And when that first killer product or service hits the market, everyone will be overwhelmed. I suspect many of the businesses that enter this field will earn back their startup capital rather early on.

Suzuki: I see what you mean. Ultimately, then, the hand that rocks the cradle, so to speak, could be more important than the mother who gives birth to the fertile idea. The approach Japan uses to nurture this market may prove pivotal. That is where I suppose we will see manifestations of the so-called "Japanese formula" for electronic commerce.

Yonekura: The time will come when the two years for our testbed projects and for ECOM itself have expired. Assuming for the moment that business in this market reaches the takeoff point in the next century, I am curious as to how our ECOM guidelines or protocols will evolve thereafter. I believe maintenance in this context will be even more important than creation. Furthermore, my opinion is that whatever we do, it should actually support the coming boom in electronic commerce, whether in a Japanese flavor or otherwise.

Aoshima: I should add that the popularization of open networks offers additional hope for our children. The Internet has opened up a whole new world that you can interact or communicate with at any time. While electronic commerce will be one of the channels for that, the point is that access itself can familiarize Japanese children with the rest of the world and effectively prepare them for adult life in an increasingly globalized future. That in turn can be expected to bolster Japan's contributions to the international community and foster significantly heightened cultural exchange. This is one of my biggest hopes that these developments will help us raise our children so that they will be ready for tomorrow's world.

Yonekura: In other words, everything hinges on how successful we are in laying essential infrastructure for the next generation.

Aoshima: That's right. I feel that is our fundamental role.

Suzuki: At this point, Mr. Yoshikawa, I would like to ask you to wrap up with a summary of your own hopes and expectations toward ECOM and the business community.

Yoshikawa: For research purposes, ECOM has put together 19 testbed projects and in the process has entered the global spotlight. Moreover, as you know, technology tends to advance at an astonishing pace. Such circumstances can make it rather difficult to pursue an assigned research theme while flexibly addressing new issues and keeping your initial objective in mind.

Though no one would probably term it perfect, ECOM has nonetheless registered a substantial measure of success in its efforts to date. I am therefore all the more encouraged to urge that it continue on its present course.

Internationally, ECOM stands out as the only major Japanese forum currently dealing with themes in consumer EC, and for that reason it has drawn serious attention. So, I believe the real competition in this field is yet to come.

Suzuki: And since we are out of time, I will now bring this roundtable discussion to a close. Thank you.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p04-13.htm

EC Jargon Defined

Extensive mass-media coverage of electronic commerce themes has introduced the public to a barrage of new technical jargon. Noting that semantic inconsistencies can lead to confused discourse, ECOM set up a special task force and assigned it the

mission of providing standard definitions for many of the morecommon EC terms. This has facilitated better understanding and a smoother work flow at ECOM.

EC (Electronic commerce)

Definition: Activities that involve part or all of a commercial transaction over an electronic network.

Explanation: As used at ECOM, EC broadly covers such topics as electronic money, online electronic transactions between consumers and businesses, and all other factors ancillary to such transactions: e.g., online marketing as well as the technological and institutional essentials for the assurance of interoperability between certification centers and over international connections.

Electronic Money

Definition: Digital currency amounts backed by real currency in circulation, and suitable as a means of payment.

Explanation: Currency issued by a central bank is the only thing that can actually be called " money" in the strict sense. Terms such as " electronic money" and others that have been popularized by projects in a number of countries around the globe all refer to nothing more than electronic expressions of currency units that are backed by real currency in circulation, whether pooled or made available through credit guarantees. For electronic payment purposes, electronic money is essentially a substitute for real money.

Issued electronic money roughly falls into one of two categories, " open-loop" or " closed-loop," depending on whether it is freely exchangeable (as a liquid currency) in transactions between individuals, businesses, or both, without having to pass back through the hands of the initial issuer. These categories are further broken down depending on the value-added nature of the electronic medium, the issuer, and the method of disbursement (i.e., where the recipient is able to seek payment in real funds). What is more, each of these sub-categories is subject to a different set of legal and institutional controls.

Electronic Payments

Definition: The payment of a purchase amount or service fee resulting from a business transaction through payment procedures conducted over an electronic network or with a smart card.

Explanation: Means of electronic payment range from credit cards and electronic money to digital checks. Payment can be in advance, immediate, or credit-based.

Business Protocols

Definition: A set of rules on the information formats for the transaction data to be exchanged by parties in an electronic transaction.

Explanation: The data protocols for electronic commerce are generally termed " EC protocols." Business protocols count as a subset of all the EC protocols required, and they define the rules for the exchange of data between business applications when an electronic transaction is made. There are three specifically defined forms: standard message packets, data elements, and syntax rules.

EC Protocols

Definition: A set of binding rules for the parties in an electronic-commerce transaction.

Explanation: Electronic data interchange (EDI) is a protocol for digital transactions between specific businesses. As such, it incorporates provisions for four protocol types: communications protocols, business protocols, system protocols, and core transaction protocols.

For the sake of compatibility with existing protocols in an EC environment, it is acceptable to draw on these four protocol types as reference models.

Personal Authentication

Definition: Personal authentication is any action that confirms the identity of a person who was previously registered.

Explanation: Preliminary registration of some kind is a prerequisite for personal authentication. " Registration" in this instance has various meanings depending on the area in which it is used. In one case, it may mean a qualification such as a driver's license or membership in a credit card system. In another case, it may mean inclusion in a specific civil community, which could be verified by possession of a birth certificate, for example. Therefore, personal authentication is not a concept unique to computer technology but rather is a social activity widely used long before the introduction of computers.

A person who claims that he or she is the registered person in question must show evidence of that to the other party. This is the basic principle of personal authentication.

Certification Authority

Definition: A certification authority performs a number of related functions. Using public key encryption technologies, it can verify whether a public key is actually that registered to a particular applicant and will issue certificates on that basis. In addition, the certification authority is engaged in the task of forwarding such certificates, registering and maintaining public keys for applicants, registering and managing its own public and private keys, and registering and managing certificate revocation.

Explanation: Certificates will be issued on request only if the applicant presents convincing personal identification.

The format for certificates is as defined in ITU-T X.509. Certificates include information on the applicant's public key, the applicant's identification, validity, and the certification authority's (digital) signature.

Applicants can be either natural or legal persons.

Content

Definition: The electronic or " virtual" network representation of a real-world good or service.

Shop

Definition: The electronic or " virtual" network representation of a real-world shop or business that markets " content."

Mall

Definition: The electronic or " virtual" network representation of an actual collection of shops, a department store, or a marketplace.

Shop Operator

Definition: The party or agent responsible for a shop's business transactions.*

Mall Operator

Definition: The party or agent responsible for a mall's business transactions.*

Content Provider

Definition: In broad terms, a service provider contracted by shop or mall operators to assemble shop or mall content.* Narrowly defined, a service provider that electronically assembles content on a contract basis for shop operators.*

Explanation: Sometimes shop or mall operators perform the content-provider functions themselves.

Mall Constructor

Definition: A service provider contracted by mall operators to assemble or build their virtual malls.*

Explanation: Sometimes the mall operator also assumes the constructor role. Broadly speaking, mall constructors and content providers are equivalent.

Shop Administrator

Definition: The provider contracted by a shop operator to run or manage a virtual shop.*

Explanation: Sometimes content providers or shop operators fill the shop administrator role.

Mall Administrator

Definition: The provider contracted by a mall operator to manage a virtual mall.*

Sometimes the mall administrator role is filled by the mall operator, content provider, or mall constructor.

* Can be individuals or organizations.

Explanation: The definitions above are summarized in the following table.

Real-World Generic Responsible Constructor Administrator

Business Entity EC Name Party

Shopping district

Department store Mall Mall operator Mall Mall administrator

Marketplace constructor

Shop

Office Shop Shop operator Content provider Shop administrator

(Service) etc.

Product or service Content - -

Source: http://www.ecom.or.jp/eng/ecom-today/no1/p14-15.htm

Shopping Mall Construction Technologies WG

Shopping Malls

Shopping Malls on the Net are electronic representations of shopping districts, malls, marketplaces, or department stores that usually exist in real life.

For a fee, they provide space, primarily for the display of product information and for receiving payment. Advertising space is also available.

Shopping Malls consist of several shops in one place. A shop in that instance is the smallest unit of tenant space leased for the purposes described above.

Expectations toward Malls

Malls are now the subject of considerable debate, namely in terms of their value, useful purpose, and presence. From the standpoint of providers and prospective customers, the key issues are as listed below.

. From a Mall Providers Standpoint:

- Virtual shops are hard to set up and operate.

- Low development costs

- Can attract customers from around the world

- Synergistic effects: Customers "visiting" one shop will conceivably be interested in others.

- Higher customer-return rates

- Community-oriented space

- Space for special services and features (including electronic payments)

- Marketing space (personalized marketing, etc.)

- Consulting services for virtual shop operations (e.g., advice on copyrights and analysis of customer purchasing patterns)

- Space for provision of information on mail-order products and services

- Fosters market evolution

- Promotes consumer evolution.

. From a "Visitors" Standpoint:

- Broadens range of product comparison and selection

- Offers theatrical shopping atmosphere that is more interesting or entertaining than real malls

- Community-oriented space

- Spaces for a range of events and services (including electronic payments)

- Marketing space

- Space for provision of information on mail-order products and services

- Fosters market evolution

- Promotes consumer evolution.

Working Group Objectives

Designing shopping malls with stronger consumer drawing power in mind will be vital to the task of generating heightened electronic commerce between businesses and consumers. Accordingly, it will be essential to explore the strengths and features of each technology available for that purpose and select the one that is considered most cost-effective.

The Working Group on Shopping Mall Construction Technologies has been given the mission of drawing up evaluation criteria and methods that will form the basis for guidelines on technologies for the creation of common platforms and shopping malls. The perspective shall be oriented toward consumer conveniences, and the emphasis will be on technical issues pertinent to mall design and displays and ease of use.

Agenda for Study

This working group will explore technical issues (listed below) concerning the design of virtual spaces for practically every stage of electronic commerce, from the online display of malls and merchandise to procedures for the purchase of products consumers want. However, it will not devote any in-depth study to payments, content providers, or product delivery mechanisms, for these are subjects that will be addressed by other working groups:

- Mall design and displays

- Ease of use

- 14 testbed projects for the promotion of EC

- Overseas testbed projects.

Should the need arise, additional evaluation-related issues of a legal or institutional nature will also be explored on a cooperative basis with the other ECOM working groups.

At present, the working group has five sub-working groups (SWGs), each of which is engaged in a more focused, in-depth investigation of selected technical issues.

SWG-I (User-interface technologies)

SWG-I (along with SWGs-II, III, and IV) will have the task of developing evaluation criteria and methods that will serve as guidelines for the construction of virtual malls. Its investigative focus will be on current technologies for the graphic display and video synchronization of different types of content (e.g., two- and three-dimensional images), with special attention given to data-input operations or interfacing.

SWG-II (Content-authoring technologies)

SWG-II will focus on currently available hardware and software tools and technologies for content authoring.

SWG-III (Graphic-data storage and retrieval technologies)

SWG-III will be engaged in the study of technologies for the efficient storage and retrieval of graphic data essential to shopping mall construction.

SWG-IV (System design technologies)

SWG-IV will study the essential tools and technologies currently available for the construction or design of electronic commerce systems including network systems.

SWG-V (Institutional issues in mall construction)

SWG-V will concern itself chiefly with legal and institutional issues in shopping mall construction and operation. Also, should the need arise, it will work with the other ECOM working groups in producing abstracts of study findings in this area.

Schedule of Activities

Through fiscal 1996, the working group will chiefly study shopping mall construction technologies and develop (prototype) evaluation criteria and methodologies. In addition, it will request that these prototypes be put to the test, where feasible, in testbed projects (19) funded by the first fiscal 1995 supplementary budget.

In fiscal 1997, the group will basically continue with the project testing for its prototype evaluation criteria and methodologies and reflect the findings in subsequent (prototype) versions. Additionally, it will produce abstracts of the findings from its investigations into the legal and institutional issues associated with shopping mall construction.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p16-17.htm

Standardization of Formats of Product Attributes WG

Current Standardization Trends

Most of the products consumers buy usually flow through conventional channels, from manufacturer to wholesaler to retailer. In some sectors, the use of electronic data interchange (EDI) in the distribution stages from manufacturer to retailer has fostered a standardization trend in product codes and other product-attribute data. On the other hand, the essential product details that retailers supply consumers have yet to undergo any standardization at all. Hence, in making a purchase decision, the typical consumer still has to visit the retailer's store in person, or place an order based on past purchase experiences or the information in a merchandise catalog.

The Need for Standardization

. From a content provider's standpoint

Content providers are under pressure to offer their product information in an array of data formats. For instance, even if that information is already in a computer-readable form, they still face uncertainties in terms of office workload because there is as yet no clearly defined format they should be prepared to convert to. If there were a standardized format in place, it would serve as a basis for EDI between providers of consumer goods and services. In addition, as a detailed source of information on consumer buying patterns, it could be effectively harnessed for interbusiness transactions, corporate tie-ups, and market research.

. From a consumer's standpoint

Unless product information is available in a standardized format, computers cannot understand it. In turn, consumers will not be able to perform computer-based data searches or use the information at all unless they have some other means of access to it.

The hypertext markup language (HTML) has become the de facto standard for certain forms of information on the Internet. However, in one respect, it is not enough. Namely, while it does incorporate enough control-code information for the display of tables and other graphics with web browsers, there is no guarantee as to how any given browser will interpret that information. Even if all providers began supplying their information electronically in an HTML format, there is no assurance that their prices would appear as anything more than a string of pure numbers.

- For example, in Japan more than one currency symbol is commonplace for the "yen " displayed in price lists. On top of that, prices listed in a table format often have no currency unit at all.

- In certain cases, the unit may actually be 10,000 yen or some other multiplier.

- Worse, even if consumers can access a provider's product information, the electronic queries they make regarding any given product will often not be in a readily computer-readable format, thus requiring that it ultimately be processed by hand.

Expected Benefits of Standardization

. Impact on the distribution process

Until now, most EDI-based management frameworks for information on product orders, inventory, and delivery have been limited to specific businesses (manufacturers and retailers). If such product data were accessible in a standardized, computer-readable format, these frameworks would then effectively extend across the entire distribution process, that is, from manufacturers to final consumers.

. Improved client-software capabilities

Once product information and consumer needs are all digitized and in a standardized, computer-readable form, it will be possible to develop and perfect highly functional software agents for consumers. This can be expected to foster sweeping advances in the features and functions of client software in general.

. Content integration

Having mutual, computerized access to content information will enable content providers to better integrate their offerings and in turn significantly expand their business opportunities. It will be possible to integrate their services once information on such factors as product options, time, place, consumer preferences, and so forth have been standardized in a meaningful way.

For example, providers will be capable of filling requests for concert tickets in a comprehensive fashion by supplying tickets that reflect schedule information furnished by the customer's data terminal and that are bundled with directions to the concert hall as well as arrangements for accommodations, if need be. On top of that, they will be prepared to offer a personalized selection of modes of transportation or hotel accommodations that are suited to the customer's preferences.

Providing these integrated services in an automated way will demand that product information gathered via the Internet be available and kept in computer-readable form. One future image of software agents is the ability to present a bundle of services tailored to the preferences of the consumer, even in response to such fuzzy requests as "I'm free on the fifteenth. Do you know of anything happening then that I might find interesting? " However, unless the desired information is in a comprehensible format, such software agents will not be able to handle it.

Another example would be the consolidation of web-page information by used-car dealers, car manufacturers, and car-industry publications. This would pave the way for an entirely new range of content that bundles used-car price lists with detailed model specifications and magazine articles relating test-drive impressions.

Working Group Objectives

As one step toward the creation of an environment that allows consumers to participate in electronic commerce in a more convenient, secure, and timely manner, the Working Group on Standardization of Formats of Product Attributes will strive to ensure that existing content providers effectively implement rules for the standardization and management of product-attribute data.

Agenda for Study

The working group will study forms of product-attribute information for consumer EC that should be standardized in addition to existing product-code frameworks and will explore strategies for the management of that information.

It will pursue detailed investigations into each issue for study by setting up several sub-working groups.

SWG-I will have the task of drawing up proposals concerning the logical structure, display, and distribution of product information.

Additional SWGs will work together with industry representatives on the task of standardizing tag sets and other information for selected products; drawing up standard models and conducting simulated retrievals aimed at determining whether these models for standardization are viable.

Schedule of Activities

In fiscal 1996, the working group will be occupied primarily with case studies. By looking at industry classifications and domestic and foreign case studies, it should be able to effectively analyze product and service categories, product-attribute information, and the current scale of content integration, thereby gaining useful pointers for the standardization process.

Based on the findings of that case-study work, in fiscal 1997 the group will conduct questionnaire surveys of selected business sectors. In addition, it will also survey consumers in an effort to identify their needs as users of content services.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p18-19.htm

The popularization of electronic commerce can be expected to spark a proliferation in the number of online shops and malls. In return, though, finding desired products or services within that vast and ever-expanding virtual universe could become increasingly difficult.

As long as one has the product of a specific content provider in mind and knows that provider's web-page address, the task boils down to one of accessing that web page and following pointers or links to information on the desired product. However, sometimes a consumer knows what kind of product he or she is after but not the name or address of any provider who carries that particular item. In such situations, he or she will have to hunt for such a provider or conduct a relational search through data on several different providers.

Demands of various kinds are conceivable: for instance, the ambiguous and conditional, "I want to stay at a seaside resort for around X days at a cost of roughly Y, " the almost totally obscure "I want to go on a diet, " or the compound "I am planning to take a vacation and I would like to reserve the lodging and rail tickets. "

Fostering the spread of electronic commerce will require that frameworks be set up to effectively find the products and services that satisfy consumers who present such demands.

Integrated Content

Actually, "integrated content " is a rather ambiguous term. Nonetheless, this working group has given it a clear definition that provides a foundation for serious study. The purpose behind integrated content could be explained as one of providing consumers with a setting that supports their efforts to find the products or services they are looking for on the Internet, or get helpful advice to that end.

Consumers are not always looking for individual goods or services. Sometimes they are after a particular mix that demands a comprehensive or broad-based response if full (or conditional) satisfaction is the goal.

Integrated content is one such approach aimed at providing the support such consumers need. While it does not necessarily assume the existence of agent functions, the need for such functions is one contingency that is taken into consideration.

The word "integration " as used here can be weighed from a variety of different angles. In this working group, it is taken to have the context described below.

First, in terms of content integration, it can be thought of as the provision or representation of a structurally interrelated set of products or services as a single package aimed at satisfying the demands of consumers who are essentially after multiple content. It does not matter whether each form of content can be respectively treated as an individual product or service.

Another kind of integration is that of the business-show variety. In other words, the providers may differ but the integration itself is one of products all in essentially the same category, much as would be the case at a business exposition.

The last form of integration has to do with spatial or temporal dimensions. Spatial integration links content regardless of whether it is all on the same physical server or not. Though temporal integration can theoretically be defined as a way of linking content without time constraints, it is not addressed by this working group mainly because practical examples seem conceptually difficult to visualize.

Essentially three types of integration have been defined above. Needless to say, they can be used interchangeably, and even in reference to the integration of already-integrated content.

Working Group Activities

The mission of this working group is to investigate suitable technologies for the accommodation of integrated content while searching for agent technologies that are capable of finding products consumers prefer, negotiating transactions, and making the final purchase.

Activities during the current phase of study have been delegated to three sub-working groups.

SWG-I (Analysis of user needs)

What constitutes a "good " user interface for the retrieval of desired data from virtual malls? To answer that question and come up with useful methods, techniques, and objective assessment models for the practical realization of such interfaces, SWG-I will, as necessary, conduct various surveys and analyses of consumer segments in terms of such parameters as age, gender, income bracket, or geographic region.

SWG-II (Surveys of trends in technology)

SWG-II will survey trends in the core technologies for the retrieval of data from virtual malls. For instance, it will look at the latest technologies for search-engine data-gathering robots, thesaurus-based data retrieval, and software agents.

SWG-III (Surveys of testbed-project developments)

The survey focus for SWG-III is on sites that now accommodate demand for integrated content, or that are planning to do so on a trial basis. It is currently investigating user interfaces (i.e., from such perspectives as interactive menuing, functionality, responsiveness, and real-time or delayed operations), user-specific services (personal data), content categories (for products and services), content elements, interfacing for content integration, and current levels of integration, as such.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p20-21.htm

Business Protocols between Malls and Providers WG

Business Protocols

Business protocols are rules for the exchange of information on agreements reached by parties to an electronic transaction. For example, mail order usually involves the process of looking in a catalog, selecting the item one wants, filling out the order form, and sending it off to the mail-order company.

When exchanges of this kind are electronic, there must be some set of preliminary rules established for the procedure and the information format. That arrangement is termed a business protocol.

More specifically, business protocols comprise three types of rules: 1) message sets, which contain information on the order form or sales receipts that will be exchanged; 2) data elements and code sets, which count as units of a standard message set and include information on the product name, amount, and unit price; and 3) syntax rules, which determine the array or sequential format of each message.

The Current Situation with Electronic Commerce

Consumer-oriented electronic commerce operates on a set of business rules that differ from those for interbusiness transactions. In its current form, electronic commerce usually involves a procedural flow that extends from manufacturers to wholesalers, retailers (shop operators), mall operators, and final consumers. Therefore, the study of business protocols will demand that the following EC-specific business rules be taken into account:

- Transactions tend to be with a randomly large number of individuals.

- Orders are mostly small-lot, for one item or so.

- Different procedures apply to personal credit checks and repayment schedules.

- Most retailers who operate EDI-based order-placement systems still do not have order-processing systems in place.

Objectives and Agenda for Study

This working group will be concerned with the standardization of business protocols that allow content providers (shop operators) to set up in virtual malls of their choice. In particular:

- Testbed projects and EDI standards will be investigated, and every effort made to ensure compatibility with existing business protocols.

- A prototype business protocol will be developed at an early date, with the fiscal 1997 yearend as the target date for a commercially viable version.

- During the initial phase of application, findings on the newly developed protocol will be made available to the general public through the ECOM information server. Views and opinions on the new protocol will be sought, and efforts made to promote its use in a nonexperimental EC environment.

- Steps will be taken to investigate and compensate for any institutional or technical problems that arise when the new protocol is put into effect. If necessary, the cooperation of other working groups shall be sought to that end.

Activities

Group activities have been delegated to three sub-working groups.

SWG-I (Domestic EDI surveys)

SWG-I has the task of investigating domestic EDI standards in terms of three factors: standard messages, standard protocols, and information content. The focus of this investigation has been placed on CII standards and distribution system development center standards (EDIFACT).

CII is a broad-based domestic EDI standard that incorporates multiple BPIDs. EDIFACT is a distribution industry standard that predates the shift toward EDI. CII can be viewed as a "framework " composed of CII standard messages and protocols. SWG-I will study the problems likely to surface when CII is applied to electronic commerce, and examine the actual information content of several BPIDs already in use.

A UN/EDIFACT-compliant specification is now being drawn up for standard messages. SWG-I will study the information content of non-CII, internationally compliant industry standards.

SWG-II (Overseas EDI surveys)

SWG-II will examine the UN/EDIFACT and ANSI X12 standards in terms of standard messages, standard protocols, and information content, and identify the problems they could pose in an applied electronic commerce environment. In particular, it will look at:

- The extent of standardization on UN/EDIFACT (including details on message sets, data elements, and code sets)

- Issues for the adoption of EDIFACT by the mall business

- Current EDIFACT use and issues in the overseas (U.S.) mall business

- Technical trends in, and approaches to, EDIFACT use

- EDIFACT-CII conversion tools and other topics.

SWG-III (Testbed-project surveys)

SWG-III will have the task of studying data-conversion techniques for messages and protocols between the malls and content providers in those ECOM testbed projects that involve mall construction. In addition, it will shed light on business models that can serve as a foundation for electronic commerce, and strive to identify the business protocols that deserve to be standardized.

The exploration of viable business models will be pursued from two angles: an inductive approach based on the examination of questionnaire-survey findings, and a deductive approach that draws on current trends in industry and technology. Consequently, plans are to break SWG-III into even smaller units, each of which will be engaged in one of the following activities:

- Assessment of questionnaire survey findings

- Study of viable business models (consumer goods)

- Study of viable business models (consumer durables, properties)

- Study of viable business models (information products, digital content).

Business models for electronic commerce will be explored in terms of two scenarios: with malls as prime contractors, or as advertising mediums alone.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p22-23.htm

Common Security Technologies WG

The Need for Security Technologies

Consumers, providers of goods and services, and intermediary financial-service institutions are all active in electronic commerce, and engaged in a network-based exchange of information in various forms, including data on orders and payments. Needless to say, ensuring the security and privacy of that data has become a serious challenge.

This challenge underlines the need for data encryption, digital signatures, and other encryption technologies, and suggests that top priority be given to laying the infrastructural essentials that will pave the way for the reliable and secure exchange of information in electronic form. In addition, electronic commerce can also be expected to foster a variety of approaches to payment, including those that are credit- or electronic money-based.

However, ease of use will also be a vital element. From a consumer perspective, it will be desirable to be able to connect with provider services from a variety of locations, including the home or workplace. Though such connectivity should be simple to achieve, and inexpensive as well, it will be a challenge to effectively reconcile these desires with the need for data integrity and privacy.

Business Terms for Secure Protocols

Secure protocols for business transactions conducted over the Internet or other open networks will be expected to meet the following terms.

Purchaser's terms:

- Assurances of confidentiality regarding place of purchase

- Assurances against disclosure or abuse of purchaser's credit-card or bank-account number

- Assurances that the online shop and financial intermediary involved in a transaction are not fraudulent operations.

Seller's terms:

- Assurances that the purchaser can be identified

- Assurances that business inquiries from prospective customers can be answered in a timely manner

- Assurances that customer information will not be disclosed to others.

Working Group Objectives

Security measures for electronic commerce should be readily apparent from the perspective of the consumer, the retailer, and each node (certification authorities, payment gateways, etc.). The Working Group on Common Security Technologies will be engaged in efforts to develop those measures along with other criteria that will allow for objective evaluations of the security features or capabilities of any given open network system for electronic commerce, or other network systems connected to it.

A measure for credit card payment system: what is it?

A sub-working group will draw up a standard form of expressing the security function in credit card payment system.

It will be made from the viewpoint of a system developer as he could use it for self-evaluation for his designed system.

When he is asked from what threats the system is protected, it will be easier for him to explain the strength of the system, and also easier for a client to recognize it. Without a measure the system developer must explain how the system implements security functions. Or worse, he might miss to describe critical functions to the client.

Agenda for Study

Case studies

The working group has pursued three relevant case studies, explored foreseeable security threats and potential countermeasures, and formulated well-defined concepts for viable security measures:

- Smart-card electronic money transactions

- Credit-card payments

- Noncredit payments.

Scheduling for evaluation of proposed security measures

The working group is now weighing the idea of setting up several sub-working groups for further study on the issues of security measure conceptualization, formulation, and scope of applicability.

Security yardstick formulation

Prototype measures will be formulated by sub-working groups.

Prototype reviews

Plans are to have testbed-project leaders conduct reviews of the security measures that are derived from the above-cited prototypes. Depending on the feedback from these reviews, the measures will be modified and improved. In addition, the working group will produce and announce version 1 of its security measures, together with an evaluation handbook.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p24-25.htm

Personal Authentication WG

Personal Authentication

Personal authentication is a process of verification conditioned on the preliminary registration of the individual user, and it should be considered as a different concept from mere discrimination of individuals. In other words, it is essentially a means of ascertaining whether someone attempting to have a service under an existing user's account is in fact that user. Registration in this context can take various forms. It might consist of qualifying information such as that on a driver's license or in the form of user-access rights. It might include membership information such as that on a credit card. Or, it could even be resident information of the kind contained on a birth certificate. Personal authentication is simply the act of determining whether someone is indeed the registered individual he or she claims to be.

Reasons for Authentication

Authentication can also be of value to the user. For instance, it can be utilized used to convince others:

- as to who you are

- that you are the lawful owner of some object

- that you have proper credentials for something

- that you are in fact the registered user you claim to be

- that you are a legitimate member of some group or organization

- of your legal (publicly registered) identity.

Authentication Technologies

Personal authentication methods existed long before computers arrived on the scene. With the advent of computers, though, authentication has become a familiar practice throughout the computer world. This working group will examine several authentication technologies, as outlined below.

Fingerprints

In view of their biometric features, fingerprints are one of the most reliable means of personal identification available today. What is more, computer-driven technologies for fingerprint-based authentication have reached a fairly advanced stage of perfection. Palm-prints and palm shapes are also being studied as a means of personal identification.

Facial features

Facial profiles and the eye retina or iris can also be used to identify a person. In fact, the technical foundations for retina-based forms of identification have been laid and are already finding extensive use.

Token

Passports, licenses, and other personal effects served as a common means of personal identification long before the arrival of the computer age. In settings for electronic commerce, however, freely reproducible digital data is the only thing users can display. As such, there is little choice but to use that in tandem with the authentication of token holders.

Handwriting

Handwriting is another means of personal identification. There are basically two methods: a text-dependent version that compares against the user's signature, and another that is essentially text-independent.

Secret codes

Verbal passwords have been around for ages. Today, we type in PIN codes to access our bank accounts from ATM terminals, or passwords to log-in to a secure computer or network. Digital signatures are yet another variation that has recently entered the media spotlight.

Working Group Objectives

This working group is driven by the goal of ensuring that society has a choice of authentication technologies that are well-suited to frameworks for electronic commerce. Accordingly, to objectively evaluate each technology and any products equipped with authentication features, it has been given the mission of working out useful evaluation criteria, guidelines, and yardsticks.

Schedule of Activities

To effectively circumvent snags in the investigative process, the working group has already put together an authentication reference model.

As of this writing, it was investigating current trends in the above-noted technologies, and studying potential evaluation criteria and guidelines. That study has been guided by an array of perspectives, including degree of social acceptance, threat countering, accuracy, end-user acceptance, ease of use, and maintenance and administration.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p26-27.htm

Smart Cards WG

Why Smart Cards?

Credit cards and prepaid cards with magnetic stripes are widely used by many consumers to settle business transactions with corporate providers of goods and services (e.g., shops). However, these methods suffer a number of security drawbacks, and the incidence of cardholders being victimized by unlawful card tampering or use is on the rise. To put it another way, society has basically reached the limit of what can be done to ensure the security of magnetic cards.

Smart cards have drawn attention as an extremely effective way of circumventing illegal card tampering or use. They are equipped with a CPU chip that provides far more memory capacity than conventional magnetic stripes, and can be used to safely store member account numbers and other personal ID information essential for electronic transactions over the Internet. Another compelling attraction is that smart cards are suited for multipurpose use. That is, they can be loaded with a variety of service applications tailored to the needs of the cardholder.

Working Group Objectives

This working group aims to foster heightened electronic commerce as well as the widened utilization of smart cards by putting together technologies for a common smart card platform.

Topics and Goals of Study

Trends in the standardization of smart card technologies will be investigated and analyzed, and consideration given to potential testbed applications. Furthermore, if deemed necessary, efforts will be made to develop pilot models and devise a set of useful technical standards.

(1) Testbed agenda will be explored and the findings of testbed projects cataloged. In addition, the group has plans to compile a database on related technologies.

(2) Development work on contact smart cards will be reviewed, and the study of working models pursued.

(3) Situations suited for the use of contactless smart cards will be studied, and development specifications drawn up. The development process will be driven by a project focus on common technologies.

Study Orientation and Considerations

The working group will also be engaged in the study of complete smart card systems for electronic commerce. Several likely hurdles (listed below) for the adoption, popularization, and heightened utilization of smart cards will be chosen and given special consideration:

(1) Systems beneficial to cardholders, affiliated stores, and issuers (in terms of ease of use, security, cost, opportunities for expanded business, etc.)

(2) Standardization, compatibility, interoperability

(3) Multipurpose use (payments, security, information, ID, use-trends in various fields)

(4) Technical issues (payment methods, personal authentication, encryption technologies, protection of privacy)

(5) Institutional and legal issues

(6) International standardization.

Activities

Investigative activities will be delegated to two sub-working groups.

(1) SWG-I (IC cards)

(i) Objectives

As a tangible undertaking toward the realization of ECOM goals for electronic commerce, SWG-I will have the objective of promoting the adoption and spread of smart card applications through the commercialization of smart card technologies and the expansion of smart card-based services.

(ii) Operational Approach

IC cards, terminals, and networks must function together as a single, integrated whole. Accordingly, in the interest of effectively fostering the commercialization and spread of smart card systems and services, SWG-I�fs investigative focus will be comprehensive in scope, extending to issues that concern user terminals and networks. Study will also be initiated on the potential for incorporating user-specific services and applications into a single card, thus taking advantage of the multifunctional features offered by smart card technologies.

In November, the investigative work on (1) smart cards, (2) terminals, and (3) services and systems will be respectively consigned to three separate teams, each of which will be responsible for developing specific application models.

(2) SWG-II (Contactless smart cards)

(i) Objectives

SWG-II has been given the mission of studying smart card technologies (particularly the technologies for close- and remote-coupling contactless smart cards), together with various institutional and infrastructure-related issues. It also has the objective of fostering the spread of smart card-based services through the standardization of specifications for close-coupling contactless smart cards and advances in compatibility and interoperability.

(ii) Operational Approach

SWG-II will investigate the issues listed below. Those undertakings will be pursued on the basis of a review of the literature on existing or planned ventures in smart card-based electronic commerce in Japan and abroad, and on hearings and the exchange of information with other organizations:

(1) Sampling of trends in contactless smart card technologies

(2) EC infrastructure

(3) Developments concerning various institutional issues

(4) Trends in international standardization.

Findings from the above surveys will serve as the basis for guidelines on the study of close-coupling contactless smart card applications, and will assist the task of deliberating and producing standards for close-coupling contactless smart card specifications.

Schedule of Activities

During the first half of fiscal 1996, the working group conducted several fact-finding studies aimed at identifying the extent of smart card adoption, use, and standardization.

During the second half, SWG-I will be engaged in the task of drawing up pilot models while SWG-II investigates questions concerning smart card applications and their market viability.

The working group as a whole will continue to update smart card-related information on ECOM web page.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p28-29.htm

International Business WG

Operational Objectives

- The group will investigate institutional issues for international transactions in an electronic commerce setting.

- In addition, it will study model protocols for the establishment of links with virtual malls overseas.

Features of International Business and the Scope of Study for This Working Group

International commerce between businesses or with individual consumers is now broad in its scope, ranging from transactions in goods (consumer goods, capital goods) and services (financial and information services) to investments and transfers of technology. Though they share much the same business foundations with domestic commerce, international transactions differ in that they usually must comply with multinational frameworks for foreign trade and be settled through foreign-exchange banks. In addition, the process itself essentially demands attention to several factors that stem from international differences in social, economic, and cultural traditions.

Electronic commerce conducted on an international scale should be attentive to these differences and deal effectively with the special problems they entail. Since fiscal 1996, the Working Group on International Business has primarily concerned itself with consumer-oriented international commerce in commodities.

Consumer-Oriented International Electronic Commerce: the Hurdles and Potential for Growth

Personal computer sales in Japan have been booming, and the use of Internet services is up significantly. These trends in turn have been fueling a year-on-year increase in the number of consumers experienced in online shopping (18 percent in June 1996, according to Nikkei BP surveys). In the meantime, as one manifestation of the internationalization trend in consumer purchasing patterns, the use of foreign mail-order has been climbing impressively. In response, the domestic mail-order industry has come out with a range of private importation service offerings. (The scale of foreign mail-order turnover has been growing at an annual pace of around 150-160 billion Yen.)

By current estimates, there are already innumerable virtual shops up and running in the U.S. alone. Furthermore, in view of the expansion in the number of virtual shops and malls abroad, and international efforts to handle and execute customer orders, it is anticipated that Japan will soon witness the formation of a full-scale market for international electronic commerce between businesses and consumers: for instance, with more and more Japanese consumers participating, and Japan-based virtual shops and malls registering growth in their sales and exports to consumers overseas.

Fostering the growth of this form of commerce, however, will demand systematic frameworks that afford consumer peace of mind and facilitate market entry by providers. To that end, several institutional questions must be addressed.

The Shape of International EC to Come

Electronic commerce is currently a marketplace in disarray. In the discussions of this working group to date, and among industry insiders themselves, it has been pointed out that some form of closed (or managed) yet barrier-free framework for commerce will be effective in cultivating a climate of credibility and order, promoting the protection of consumers, and paving the way for heightened provider participation. That observation, moreover, has been confirmed by case studies in Japan and elsewhere. Also, it has been substantiated again and again that healthy virtual shops and malls have a vital role to play in fostering consumer protection and the smooth, responsible function of institutions active in the digital marketplace. Though electronic commerce can be expected to ease the direct participation of consumers and businesses of various types in the international marketplace, it goes without saying that participation will be accompanied by certain risks. This reality has drawn attention to the need for ways of managing information services and electronic business transactions.

There is growing expectation that a set of basic rules and business guidelines will be drawn up in the interest of nurturing a healthier international market for electronic commerce.

Current Activities (as of Oct. 1996)

In the first half of fiscal 1996, the group busied itself with the task of selecting issues for study (see next page). In the second half, it turned to the task of identifying those that deserve special priority.

On the topic of business protocols, the group engaged in case studies of several Japanese companies in the first half, and turned its investigative focus to U.S. case studies in the second.

A Summary of Key Institutional Issues for Electronic Commerce, with a Focus on Consumer-Oriented EC

(The table below essentially summarizes open discussions within the working group; it is not a list of official recommendations, per se.)

Sept. 1996

Focus: International Market Issues and Anticipated Business Frameworks:

Consumer Protection Key Market Players

- Financially healthy virtual malls will be instrumental in earning the confidence of consumers.

/The need for industry watchdog organizations and evaluation frameworks for virtual malls and shops, and operating standards for malls (including explicit provisions for mall openings and closures, rules for the expulsion of dishonest business operators, and the monitoring of unannounced closures)

- Cross-sectoral issues: Internal management strategies for network operators that expand into the virtual-mall business

Interfacing with Consumers

- Advertising: Suitable rules for the required display of information on product quality, features, and use.

Ways of dealing with country-by-country advertising restrictions, notification requirements, and import bans or sales restrictions on certain items

(Ways of fostering recognition by "different "consumer segments [business operators or third-party institutions], consumer risk) *

- Business protocols

The need for full consumer recognition

/Prior to business deal: through placement of information on web page.

At time of order: notification via e-mail.

One problem: it is easy for service providers to change protocols.

- Mail-order frameworks

Ways of accommodating different frameworks country-by-country (same as * above)

- Requirements for the display of provider qualifications or credentials (as authorized businesses). /Connection with issues concerning certification frameworks.

Information and Business Management Systems

- The need for claims processing, consumer counseling, monitoring, and information services will lead to the conceptualization of centers for international EC-related arbitration and information exchange.

- Due to the unavoidable loopholes in institutional frameworks for protection, consumers who import goods on their own will conceivably face inevitable risks. /This will demand that international rules be established for the compilation and provision of information on those risks.

Fundamental Rules for International Commerce (Commercial Guidelines)

- Unlike interbusiness dealings, private cross-border transactions by individuals do not involve the exchange of any formal contracts. Accordingly, it will be necessary to foster business practices based on international guidelines of some kind.

Business Promotion (the cultivation of an attractive market climate for investment and participation) Market Systemization of EC Technologies

The need to promote the international harmonization and market systemization of goods and services, technologies, infrastructure, provider-based methods for notarization, authentication, digital signatures, and encryption.

Encouraging New Entrants

- The need for credit guarantee arrangements and steps to organize venture shops as ways of securing credit collateral and encouraging the market participation of credit agencies for small businesses.

- The need for the systemization of payment-institution frameworks for the recognition and extension of credit to virtual corporations.

Key Market Players

- Financially sound virtual malls will be vital to market growth. /They will help provide suitable levels of protection for consumers and facilitate institutional operations in the marketplace (e.g., settlements, customer and client management, ethical controls, notarization and authorization functions, transaction security).

Facilitation of Commerce (Contracts, Delivery, Payments)

- Online catalogs

User terminals vary in their recognition of displayed data or control-code information, thus strengthening the likelihood of an uptrend in consumer claims.

- Confirmation of contract terms

Aside from the controversy over whether e-mail contracts for electronic transactions should be considered binding on the basis of their electronic submission or receipt, businesses will realistically need to come up with clear definitions for the satisfaction of contract terms and provisions, and devise confirmation e-mail receipt mechanisms for consumer orders. (Case studies for this purpose abound.)

- Countermeasures for fraudulent orders

Such orders must be prevented during the contract confirmation process. International authentication systems for this purpose would be desirable.

- Measures to deal with country-by-country variations in EC frameworks (e.g., strategies for business with countries that limit content)

- The processing of orders for items subject to import restrictions or bans

/Systematic approaches in keeping with frameworks in the country of origin or destination are needed.

- Customs clearance

The potential for an increase in customs clearance-related snags as consumers order more items (including orders made mistakenly, in good faith) that happen to be subject to import restrictions.

The potential for longer delays due to an increase in customs-clearance workloads for small-lot merchandise.

Questions concerning the import taxation, ethical controls, trade management, and restriction of digital content

Order cancellations after the verification of contract e-mail are considered by some to be unreasonable. , / However, since most consumers are honest, this should be allowed in the interest of promoting market growth and increased purchases.

- Payments

Credit cards (and cardless cards) offer conveniences that make them an ideal means of payment for cross-border electronic commerce. However, (in the U.S.) checks and cash are still the principal means of payment for the vast majority of small-lot merchandise purchases by individuals. It is hoped that electronic money and electronic checks will be commercialized to accommodate these forms of payment.

Protection of Intellectual Property Rights

- The need for the establishment of a system of rewards and other international market mechanisms (including trademarks) for the protection of intellectual property rights.

- The overprotection of digital content could stifle market growth. (One example is the PreView case.)

Common Issues Network Infrastructure

- Stable business network infrastructure will be the foundation for electronic commerce.

- There is a limit to the amount of compensation that can be paid to offset damages attributable to networks or other elements of infrastructure. Besides, it could prove difficult pinpointing liability in an open network environment.

- Internet infrastructure risk

Questions exist about the need for steps to define and counter risk. , / Since consumers have the option to use alternative channels for their business dealings, they should personally assume the risk for the choices they make.

We welcome reader comments and views concerning the above. Working Group on International Business Fax: 03 5531-0068

source: http://www.ecom.or.jp/eng/ecom-today/no1/p33-35.htm

Privacy Issues WG

Privacy Safeguards in an Information-Intensive Society

In most industrial countries, the Information Age arrived with the trend toward computerization in the latter 1960s and beyond. In the process, "information " assumed importance on a par with economic power, private assets, and civil rights, and in some cases is now considered to have even more value than the subjects or objects it represents. That being the case, entities in the possession of valuable information have a social responsibility to properly manage it. In fact, this social obligation has become a major issue for private companies today, as demonstrated by questions about the disclosure of information on their corporate equity or balance sheets, or the need to protect the confidentiality of information on their business clients as they move forward with the development and adoption of information networks and other computer-driven systems.

Changes Brought by Advances in Information and Communications Technology

Recent advances in the use of computers and networking technology are in some respects an outgrowth of the routine mainframe processing of huge volumes of data by national and local government agencies and private-sector corporations. These advances, however, have heightened the ability of businesses to handle information on private individuals, thus increasing the likelihood that scattered pieces of such information will be collected and utilized in an more cohesive fashion.

This intensifying utilization of accumulated information on private individuals has aggravated certain risks. For one, it can lead to false impressions about an individual or mistaken predictions about how that individual is likely to act. In addition, this information is now in far greater danger of being illegally tapped, altered, or manipulated by unauthorized outsiders.

The Internet boom symbolizes the internationalization trend in information networks. One problem with that trend, though, is that once information on an individual is placed on the "net, " it is almost instantly accessible on an international scale. This particular reality seems to underline an essential need for coordinated, multilateral actions to protect information on private individuals.

However, unless something is done to protect such information in today's fast-evolving network environment, public distrust of the information revolution could come to a head and present a major obstacle to future development work on the Information Superhighway.

Given these circumstances, it seems imperative that Japan now review its security frameworks for the protection of personal information.

Trends Overseas

In the 1970s, many industrial nations began enacting privacy laws and other legislation aimed at protecting the information on private individuals. Introduced in September 1980, OECD recommendations for the protection of privacy were a major stimulus in that respect; they incorporate eight specific principles, as follows:

1. Collection Limitation Principle

2. Data Quality Principle

3. Purpose Specification Principle

4. Use Limitation Principle

5. Security Safeguards Principle

6. Openness Principle

7. Individual Participation Principle

8. Accountability Principle

Network growth and heightened cross-border flows of personal information have fueled demand for the international harmonization of frameworks for the protection of individual privacy. In addition, there is growing interest in strategies of protection that can accommodate the ongoing development of global-scale networks.

EU member-countries have already laid the legal groundwork for protection. A proposed statute for the protection of personal data was introduced in 1990. That was followed in 1992 by an amended version, which was eventually finalized in 1995. The proposal is aimed at fostering adequate levels of protection for private information worldwide. On the issue of transmissions of such information to a third country, it calls for negotiations in the event the EU Commission deems that country's measures for the protection of privacy "inadequate. "

Working Group Activities

Japan is one of the few industrialized nations that as yet has no legal provisions in place mandating that its private sector protect information on individuals. This poses a serious problem, in that the above-mentioned EU statute will effectively block EU countries from transmitting private information on individuals to Japan unless Japan develops "adequate " protection measures. Accordingly, this working group will explore possible revisions to existing Japanese guidelines on private information in the interest of bringing them up to the levels of protection required by other countries, and with an emphasis on electronic commerce. In addition, it will study proposals concerning suitable frameworks for claims processing and consumer redress.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p36-37.htm

Electronic Settlements WG

Settlement

A settlement is often described as comprising the acts of billing, payment (fund transfer), and confirmation, but from a practical business standpoint it is useful to consider it part of a continuous flow through several interrelated stages, as illustrated below. Its conceptual coherence would conceivably be compromised if it were thought of as an isolated act.

Accordingly, this working group has chosen to focus on settlements as an integral unit of the entire transactional flow between the parties to an electronic commerce transaction.

Working Group Objectives

Practically all transactions are based on a particular scheme or framework designed for the purpose. In addition, there are protocols or contracts that explicitly assign the scope of liability and define the terms for agreements between parties to a given transaction. This set of rules or procedures allows for a smooth transactional flow.

Nonetheless, there are no standardized schemes or protocols in place yet that could serve as a basis for electronic commerce.

For this reason, to promote the spread of electronic commerce, our working group has been assigned the task of devising and standardizing model schemes and protocols for different forms of transactions.

Specific Themes for Study

Transaction Types

Various types of transactions are conceivable in an electronic commerce setting. For the purposes of this working group, attention has been placed on transactions between businesses and consumers, and between private individuals. EDI and other types of interbusiness transactions remain outside the scope of study for now.

Approaches and Frameworks for Study

From a settlements perspective, a decision was made to divide transactions into roughly two types: credit-based and noncredit-based. To improve the precision of the investigative process, sub-working groups were formed, with several internal task forces (TF) set up to address the finer categories of each transaction type.

Action Plan

One assumption of this working group is that currently existing processes will serve as the basis for transactional flows in an electronic commerce setting. On that understanding, it decided to investigate the following processes in terms of current transactional flows.

That investigation is guided by several perspectives of interest to the parties in a transaction: namely, ease-of-use, scope of liability, and risk.

Progress to Date, and Future Schedule

SWG-A

(1) TF-I: TF-I is currently studying flows modeled on the virtual-bank transaction scheme that has been employed by the ECPJ (Electronic Commerce Project) Smart Collar Club (see p.54). March 1997 is the target date for completion of its transaction scheme and draft protocol.

(2) TF-II: To broaden the scope of investigation, TF- II has been studying the ECPJ virtual-city plan (see p.68) and online and offline debits. It is presently modeling flows on the virtual-city plan, and has targeted March 1997 as the date by which it hopes to classify common issues. Its transaction scheme and draft protocol will be completed at a later date.

(3) TF-III: The team on prepaid-type transactions has put together a draft transaction scheme that is modeled on VISACASH, and is now investigating issues on the legal front. It has plans to finish work on its transaction scheme and draft protocol by March 1997.

The team on medium- and longer-term issues has the objective of developing a prototype formula for advance payments that are suited to the Japanese marketplace, and that can be evaluated through testbed projects over the next two years or so. It is currently pursuing that objective from three angles: i.e., by exploring "prototype "features and functions, researching domestic market conditions, and weighing the suitability of foreign schemes for use in a Japanese market setting. The next phase will involve consolidating its findings from these investigations, drafting prototype transaction flows for the Japanese marketplace, examining the legal issues, and putting the finishing touches on a transaction scheme and draft protocol.

SWG-B

TFs- I, II, III, and IV respectively studied four transaction types: card, third-party, cardless, and itemized installment-type payments. Based on their findings, in October SWG-B drew up several schemes for specific transaction types, completed its sampling and study of specific issues, and divided problems with the current legal system into two categories: those of a short-range nature, and necessary revisions of a medium- and longer-range nature. In view of the need for a set of transaction protocols that can function within the existing legal system, in November the SWG reorganized its task forces and began developing draft EC credit-type protocols composed of card member agreemet and merchant agreement. That phase of work was expected to reach completion in December.

In fiscal 1997, the working group will widely disseminate its finalized transaction schemes and protocols to the project community and have them evaluated. To refine them further, it will draw up and recommend a set of prototype schemes and standard protocols designed specifically to address necessary revisions to the legal code over the medium and longer range.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p38-39.htm

Consumers Issues WG

Current Issues

Recent advances in information use and throughout the economy at large have complicated and multiplied the business options for consumers in the marketplace. Indeed, the changes have been rapid. Transactions now extend from merchandise to services and financial assets, and methods of payment include cash and various types of consumer credit. On the sales side, mail-order, call sales, and other nonstore sales strategies have joined the mainstream. In addition, the home-PC boom has begun to fan the popularity of electronic commerce over the Internet. In effect, before any serious investigations of the legal or technical issues had a chance to get underway, society moved headlong into a new age where multitudes of consumers-most of whom can be considered computer neophytes-are now engaged in electronic commerce. In many respects, it is still unclear whether existing customs or frameworks for advertising, contract arrangements, or payments can be utilized effectively within this new electronic setting. Unsurprisingly, those ambiguities will likely leave the door open to many new forms of victimization.

Mitigating that threat will demand that providers have a clear understanding of their responsibilities and potential liability, and that a set of suitable guidelines for business conduct be introduced. In addition, it will be important to furnish consumers with accurate information on electronic commerce, and encourage them to fully utilize that information and be prepared to decide and act in a responsible and prudent manner.

Consumer Protection and Consumer-Oriented Government

Rapid postwar economic growth transformed Japan into an affluent consumer society. On the downside, the marketplace has been producer-oriented, in that consumers often assume an inordinately large share of the business risk. In addition to having providers of goods and services engage in fair business practices, this situation underscores the value of striving to instill Japan's social systems and government structures with a perspective that is oriented more toward the public interest, including heightened benefits for consumers.

From that perspective, the challenges will conceivably include steps in (1) deregulation (e.g., through measures to stimulate competition, open up markets, and liberalize financial services); and (ii) consumer protection (including assurances of safety, freedom of choice [e.g., on the basis of proper contract terms], structures for consumer claims processing and redress, and consumer education).

Since electronic commerce poses no serious temporal or spatial restrictions, consumers have the opportunity to place orders whenever they like, wherever they may be. This convenience, however, has conversely amplified the importance of consumer protection (e.g., in terms of security guarantees or contract legitimacy) and ways of processing consumer claims and providing redress.

Enhancements to the Legal Code

Unlike conventional business dealings on paper, electronic commerce relies on network-based exchanges of understanding. This has raised questions as to whether existing transaction procedures and frameworks can be applied in unmodified form. Consider the following.

Under existing law, is it necessary to distinguish whether network-based transactions are those between parties interacting on a delayed basis, or immediately, as if in person or over the phone? If so, then on what grounds should that distinction be drawn?

Under provisions of the Japanese civil code, contracts between parties remote from each other are considered to take effect at the point when the required parties have issued their expressions of consent. If that consent is issued through conventional mail channels, naturally there will be a time delay between the points of issue and delivery. Barring a system breakdown of some kind, though, expressions of consent issued over an electronic network suffer no delays of this kind. One question, then, is whether it is still necessary to apply the conventional "on issuance " doctrine in the case of electronic commerce.

Questions such as these could leave consumers with a vague sense of uncertainty about electronic commerce, thus hampering its market development and growth.

Finding solutions to this situation will demand that the following issues be explored:

- Viewpoints on the withdrawal or alteration of contracts

- Contract provisions for mistakes, fraud, or intimidation

- Contract provisions for erroneous input or "typos "

- The use of written contract terms or conditions on paper

- Grounds for product returns or exchanges.

Consumer Education

Consumers must take the initiative in protecting themselves in the emerging field of electronic commerce. Consumer education will be increasingly vital to that end.

(1) Corporate-led efforts in consumer education

Though corporate activities in this arena are primarily focused in providing information, that information often tends to be of a solely promotional nature, and rarely what consumers actually need. Such corporate roles will gain importance once consumers have educated themselves enough to make decisions about the value of the information offered.

(2) School-based efforts in consumer education

The Japanese schooling system has fallen behind extracurricular and adult-education programs in providing consumers the wisdom and insights that can help them protect themselves in today's world. By some accounts, the key reason is that our schooling system places far too much emphasis on cramming students' heads with the facts and other bits of information required to pass their entrance exams.

In reality, though, children are consumers who have allowances they can use to buy certain things they want. In their innocence, they are easily influenced by TV commercials to go out and spend impulsively, and will instantly want whatever the kid next door has. Likewise, they too are in frequent danger of being victimized. As personal computers become more and more common in the classroom, the Internet can be expected to broaden the horizons of consumption by children. That will eventually develop into a serious social problem once children learn how easy it can be to electronically view and buy products that are illegal in Japan.

Viewing hard-core pornographic materials and stealing or tampering with personal data on individuals are violations of Japanese law. Such acts should not be committed by any sensible person. Adult education, however, is in this respect only a way of "treating the symptoms, " so to speak, and does not really help anyone get to the root of these consumer issues. That spells the need for organized and systematic programs of consumer education that can equip children with a basic understanding of suitable modes of conduct and decency while they are still young.

Working Group Activities

In view of the foregoing points, the Working Group on Consumer Issues is preparing to take the following actions:

(1) Develop standard contract protocols for electronic commerce between consumers and shop operators

(2) Study protocols and commercial conventions for the assignment of liabilities to providers, malls, delivery services, or consumers when trouble hits

1.From the standpoint of consumer protection, study the reliability of supplied information (on companies or their merchandise), investigate ethical and advertising-related problems, and strive to publicize the issues for consumers in the EC arena.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p40-41.htm

Digital Notary WG

Electronic exchange over communications networks offers an array of conveniences. It can be conducted practically anywhere at anytime and on a global scale. Not only that, but it helps cut operating overhead while multiplying the opportunities for new business. On the downside, these conveniences come with various risks (both internal and external) and uncertainties (e.g., about the first business dealing or transactions involving large amounts of money).

Though technical solutions to these problems are vital, it will also be important to search for optimal ways of assuring reliability and security in those areas where technical solutions alone are not enough. This calls for research on frameworks or mechanisms that will assist in the creation of an environment in which electronic transactions can be safely pursued on the basis of well-defined models.

In the interest of improved efficiency and productivity, work has been moving forward on EDI and CALS systems that digitize transaction data and allow for the sharing of such data over electronic networks. In effect, the quest to make electronic commerce a reality is gaining steam. To aid this quest, it will also be vital to research ways of standardizing corporate business process models by analyzing real-world business processes and developing a clearer grasp of the data flows inherent in each activity.

As these demands illustrate, digital notary systems and business processes have become topics for serious study.

Digital Notary: an Overview

Though the concept is something new, digital notary as discussed here is basically defined as a means of assuring the security and integrity of electronic exchanges over communications networks. Electronic exchanges range from e-mail and the exchange of contract terms or protocols for electronic business transactions to electronic money, electronic payment, and digital certificates or deeds of notarization.

For peace of mind, the parties directly involved in an electronic transaction will desire some form of outside confirmation or attestation to the factual nature of the digital data being exchanged.

The Need for Digital Notary

The assumption behind most electronic transactions is that the parties involved want to clear up all uncertainties and reach an agreement. This is one reason why it is so important that systems for electronic commerce employ effective contract protocols, procedural guidelines, and other preventive safeguards against disputes or misunderstandings.

Digital notary by third parties is one option capable of satisfying general concerns about risk aversion and economic benefits, among other factors. As such, it can conceivably play a valuable role in the following activities:

(1) Electronic commerce (interbusiness, and between consumers and businesses)

(Note that the required level of notarization will vary depending on the type of transaction involved.)

(2) Corporate documentation in digital format

(For instance, the computer data for accounting audits.)

(3) Electronic applications and notifications

(4) Electronic procurements

(5) The storage of digital data

(For instance, documentation that has to be stored for a specific period, and then later notarized.)

(6) Other uses.

Capabilities Essential to Digital Notary

The following functions will be essential for effective application of the authentication function and security techniques that will form the basis of digital notary:

(1) Electronic data registration function (function which enables the registration of electronic documents)

(2) Electronic data dual signature registration function (function which enables the registration of electronic data incorporating the signatures of both parties)

(3) Electronic data date verification function (verifies the date on which electronic data is created)

(4) Electronic data integrity verification function (verifies the fact that electronic data has not been corrupted)

(5) Electronic data arrival (delivery) verification function (verifies the fact of receipt plus the precise time at which electronic data is received)

(6) Electronic data storage function (function which enables electronic data to be stored as long as necessary and used as and when required)

(7) Electronic data retrieval function (function which enables stored electronic data to be accessed and retrieved with ease as and when necessary)

(8) Electronic data non-recognition prevention function (calls for the abstraction and examination of various situations in which non-recognition occurs)

¦ÞNon-recognition on receipt (although data has been received, this fact is not recognized by the receiver)

¦ÞNon-recognition on transmission (although data has been sent, this fact is not recognized by the transmitter)

¦Þ Non-recognition of contents (intentional non-recognition of the fact that the transmitted contents of a transmission and the received contents of the same transmission differ).

The volume of data flowing through electronic networks is growing exponentially, day by day. It will therefore be increasingly vital to ensure that consumers can engage in electronic commerce with peace of mind. Roles for digital notary in a networked society are being explored by the Working Group on Digital Notary.

Working Group Activities

The Working Group on Digital Notary is engaged in the following activities:

SWG-I (Study of digital notary)

(1) Surveys and research on concepts for digital notary

(2) Surveys and research concerning digital notary capabilities and needs (In other words, the pursuit of broad-based research aimed at determining where digital notary is needed, and categorizing the capabilities demanded at each stage. These capabilities will be organized into specific levels, or "service menus. ")

(3) Surveys and research on digital notary technologies and systems

(4) Investigations into the legal issues for digital notary

(5) Surveys and research on suitable formats for digital notary centers.

The findings of the above research activities will be used to formulate clear guidelines for digital notary systems.

SWG-II (Study of business processes)

(1) Surveys and research on standardized models of business processes for each transaction model (Methods of analyzing business processes will be investigated, cataloged, and utilized for the analysis of various transaction models. Standard models will then be presented for the business processes in each transaction category.)

(2) Surveys and research on topics relevant to BPI (business protocol innovation) implementation (To implement BPI, companies will find it useful to examine standard models for business processes and overhaul their existing processes, if need be. The research findings here will serve as useful guidelines for aforementioned action.).

source: http://www.ecom.or.jp/eng/ecom-today/no1/p42-43.htm

International Cooperation WG

Objectives

Electronic commerce allows for transactions on a global scale without concern for such factors as time or distance. However, international cooperation will be essential to the goal of making electronic commerce a practical, everyday reality. This will demand an active exchange of views and ideas with other EC promotional organizations and projects overseas, as well as the establishment of frameworks for mutual cooperation.

Given the importance of international cooperation in the EC field, this working group will engage in the following activities as a point of contact for EC-oriented promotional undertakings in Japan:

- Approach EC-related organizations overseas and seek cooperative tie-ups

- Engage in extensive overseas PR on EC projects underway in Japan

- Assist in the arrangement of international conferences.

Current Activities

Working-group members have been assigned the task of devising approaches for each of the 21 countries or economies listed below. In particular, their activities will comprise four steps.

Step I : Surveys and research on the target countries

Step II : Information exchange (periodic) with organizations based in target countries

Step III : Personnel exchange with organizations in target countries

Step IV : Establishment of working partnerships

Following these steps, the working group will act as a liaison window for the overseas dissemination of ECOM views on international electronic commerce. Steps II, III, and IV above will obviously demand a certain level of give-and-take. Accordingly, the working group will pursue a number of activities aimed at strengthening cooperation inside ECOM itself and promoting information exchange among the 19 testbed projects now underway.

Countries for Study

As of this writing (Sept. 1996), surveys and research had been conducted on the following countries and the listed EC projects, ventures, and organizations in those countries.

Additional countries and projects will be added to this list, as necessary.

. U.S.A. CommerceNet

FSTC

First Virtual

CyberCash

Mark Twain Bank

. Britain Mondex

ISI

. Belgium Banksys S.A.

Europay International

European Union

. France eCOM (National Bank of Paris

and corporate alliances)

. Portugal

. Switzerland Swiss PTT

. Germany Deutsche Bank AG

Geld Karte

. Denmark DANMONT

. Finland AVANT

Merita Bank

. Austria Europay Austria

. The Netherlands DigCash

. Spain

. Greece National Bank of Greece

Commercial Bank of Greece

. Italy San Paulo Bank

Olivetti-Telemedia

. Ireland Allied Irish Bank

. Canada CYBER Management

. Australia ICA

. Brazil Kalita Oribente Bank

. Hong Kong Hong Kong and Shanghai Bank

. Republic of Korea Dacom

. Taiwan III

Reception of Foreign Study Missions

Since its establishment, ECOM has been visited by a number of overseas business or study missions, and frequently has been asked by foreign embassies to hold lecture seminars on EC trends in Japan. It has been doing what it can to satisfy these requests.

It has also been actively engaged in public relations work. Japanese delegates delivered reports outlining ECOM and its activities at the Oct. 1996 Commerce Net Global Partners Summit that convened in the U.S.

source: http://www.ecom.or.jp/eng/ecom-today/no1/p44-45.htm

The Electronic Commerce Testbed Projects, carried out by 19 enterprises and involving consumer participation, are being implemented under the aegis of the Electronic Commerce Promotion Projects listed by MITI and the Information-Technology Promotion Agency of Japan (IPA) in their first supplementary budget for fiscal 1995.

Electronic Commerce Promotion Council of Japan (ECOM) is coordinating these 19 projects through the Project Liaison Committee.

A Trial to Operate a Cybermall with Electronic Commerce

Objectives

To ensure that electronic commerce (EC) opens up completely new markets and industries, attention must be given to other aspects besides the procedures of the on-line processing system. It is vital that EC presents an appealing marketplace which will attract users. The creation of such an EC marketplace requires experimentation with the user interface, to find ways of making it more attractive to the user.

This testbed project collects, analyses, and utilizes valuable market information obtained from Point-of-Access (POA) and Point-of-Sale (POS) data on EC users. Using a program called Virtual MallTM (currently under development by NTT DATA CORPORATION), it has augmented its random data presentation facility to create a user interface taking the form of an attractive virtual marketplace-a three-dimensional image of a mall-where users can mingle and exchange information with one another. One of the aims of this project is to develop the infrastructure needed to maintain the marketplace, and to develop a credit-settlement facility whereby credit can be extended to an unspecified number of users, in addition to conventional card settlement. The project will also provide an opportunity to try out this credit settlement facility on a testbed basis.

Outline

The effectiveness of the three-dimensional virtual-mall interface:

- Users' reactions to the three-dimensional virtual mall

- Users' appraisal of the three-dimensional and two-dimensional representations of products

- Users' appraisal of the interface, including its convenience

- Users' appraisal of the communication facilities

- Users' appraisal of advertisements and virtual storefronts.

The effectiveness of the marketplace management:

- Practical details of users' reactions to the three-dimensional image of the layout of the stores, and to the structure and internal fittings of the individual stores

- Users' appraisal of special events like bargain sales and special offers, whether users are attracted by such events, and whether such events are actually profitable from the store's point of view

- To what extent the users notice the details of the three-dimensional representations of the town, the products and so on, and to what extent they notice the range of goods and the price bands

- How much user take-up there is of communication facilities such as chat areas, noticeboards, suggestions boxes and the like.

The effectiveness of the communications platform for the three-dimensional town image interface:

- The impact of the content providers' management of the stores on the way the three-dimensional image is used

- The effectiveness of developing and operating facilities for easy image searching and priority-based searching, and the convenience of such facilities from the user's point of view

- The performance of the CAFIS Link in operational terms.

The structure of the testbed environment

This project uses a system made up of the test servers shown below, and consisting of a distributed network:

- A VM space server forming the nucleus of the Virtual MallTM system

- An advanced database search server, needed for searching for product information

- An applications server, used to carry out product purchases

- A system control server, used to carry out user control and operation control

- An analysis server

- A credit control server.

These are linked to the CAFIS center by a DDX-P network.

Schedule

Start of project: April 1997

Contact information:

Machiko Office

URL: http://www.machiko.or.jp

Tel: +81-3-5546-9768

Fax: +81-3-5546-9769

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p46-47.htm

Electronic Marketplace

Objectives

As patterns of consumption become ever more pluralistic, it is becoming increasingly important that the financial infrastructure is able to reflect individuals' preferences in terms of transaction payments. The use of IC cards for individual consumption necessitates careful consideration of international standards, and a secure infrastructure ensuring that the data stored on the cards is not tampered with. Payments performed on the network necessitate an infrastructure which allows the verification of the consumer, the store operator and the card company involved, and also protects the information and allows its contents to be secured.

This testbed project is setting out to develop multi-function IC cards, which function both as credit cards and prepaid cards, and to develop technology for installing iKP (Internet keyed payment protocol), credit-payment information transmission protocols on the Internet. The project will also be implementing, in testbed form, a comprehensive infrastructure for secure and convenient electronic payment between consumers, stores, virtual stores, and credit-card companies.

Participants in this testbed project

The parties involved in Internet shopping are credit companies, electronic shopping malls, and consumers with personal computers, who buy goods on the Internet. The IC cards provided in this project are used for personal authentication in internet shopping, but they can also be "loaded" with a prepaid sum which can be then spent at a physical store.

Main features of this testbed project

In this project, electronic payments on the Internet will be carried out using the security protocol iKP released on the Internet by IBM's laboratories in June 1995. The encryption systems used in iKP are ESIGN and elliptical elgamal encryption, a public-key encryption system based on elliptical curves, developed by NTT advance technology. For personal authentication, the IC card will be used as the certification issued by CA. The project will observe and monitor the movements of purchases and credit payment in the electronic shopping mall, and assess the security, convenience, and effectiveness of the transmission of payment-related data on the Internet.

The multi-function IC cards comply with the ISO7816 standard. The applications layer of the IC card includes a certification function for use in electronic payment, a credit function, a prepaid card function, and a bonus points card function. These multi-function IC cards will be used to assess the security of IC card payment, and its convenience from the consumer's viewpoint.

The structure of the system used in this testbed project

The consumer's terminal (or in software terms, the browser) will use both Windows and OS2. The virtual stores will use HTTP drivers, i.e. merchant servers and the credit gateways of the credit companies will be connected to the existing credit authorization infrastructure. The credit company gateways and merchant software servers will be developed on AIX.

On the consumer's personal computer, the IC card interface and the encryption module will function alongside the browser (web client function), transaction processing and iKP. The IC cards will be issued at CA centers set up within the credit card companies. In other words, the CA centers will divide up the applications sectors, initialize the credit/prepaid data and card data for individual cardholders, issue information about the cardholders (certification information, etc.), store this data on the IC cards, and mail IC cards off to consumers who have requested credit. If an IC card is also to be used as a prepaid card, the prepaid data can be written into the card straight away at the card company's service center or at the store, which will have a special counter for this purpose.

Two types of IC card readers are to be developed. One connects to the terminals belonging to the consumers acting as iKP monitors, to read the individual certification; the other connects to the POS to read the prepaid card.

2,000 consumer monitors, who are personal-computer users, will be recruited, and each one will be supplied with iKP software and an IC card reader. This IC card reader, which comes in the form of a secure box, will exchange encrypted data with the personal computer via the RS-232C interface.

A total of 10,000 IC cards will be issued, including those issued to the 2,000 personal-computer-user consumer monitors. The other consumer monitors, who do not have personal computers, will use the IC cards at the stores, as a prepaid card and bonus points card.

The number of physical stores participating in this project is likely to be about 100. The number of service counters set up by credit card companies for the "loading" of prepaid cards is likely to be about 30.

Schedule:

Publication of Homepage: December 1996

Start of Internet payment:

April 1997 (testing to start in January)

Start of Multi-Function IC Card Testbed Project:

June 1997

Contact information:

URL:http://www.emp.or.jp

IBM Japan, Ltd.

Public Relations

Tel: +81-3-5563-4300

source: http://www.ecom.or.jp/eng/ecom-today/no1/p48-49.htm

JapanNet-Global EC Platform

Outline

Using network security technologies such as certification and encryption, this project will develop a certification system, a payment system, a shopping mall platform, an electronic publishing platform, an electronic commerce system and the like, and then join them all together to carry out a field test of electronic commerce.

To support international commercial transactions on the Internet, the project will also develop a system for international cross-certification, and a system to enable technological interoperability between countries. These systems will make extensive use of original Japanese encryption technology, with a view to promoting the penetration of such technology on the international market.

Functions such as security, certification, and payment, which are vital in bringing electronic commerce within the bounds of practicality, will be supplied not just to enterprises participating in the project, but to external mall projects too. Besides developing electronic-shopping and electronic-publication applications aimed at the individual consumer, the project will also provide the application functions needed by corporate users for electronic commerce with other commercial organizations.

Meanwhile, the realization of fully electronic commerce requires the formulation and amendment of rules governing the commercial practices and legal system underpinning the system, so the project will also be extremely active in formulating proposals for rules for national and international electronic commerce.

Practical examples of applications using JapanNet

(1) Electronic commerce between multiple businesses at a trading center (Figure 1)

This application makes it possible for buying and selling transactions between multiple commercial bodies at a trading center to be carried out in cyberspace, and allows incoming and outgoing order processing, and bank payment, to be carried out on-line. JapanNet issues certificates to the commercial organizations participating in the transactions as clients, and to the trading center, which acts as the server. It also provides a payment system, thereby allowing bank balance-checking and payment processing to be carried out on-line, and realizing a system in which buying and selling transactions can be concluded entirely in the electronic realm.

1.Intranet using JapanNet certification technology (Figure 2)

This application uses the JapanNet certification system to provide a secure environment for a company's own internal communications on its intranet, and for its communications with other companies.

The company's infrastructure for internal communications between head office and other divisions, communications with customers, with branches in Japan and overseas, and with customers and suppliers overseas, can gradually be converted into an Internet-based infrastructure, using the JapanNet certification system.

(3) Digitization of international transactions with overseas organizations (Figure 3)

This application uses the JapanNet certification system to achieve secure digitization of international transactions with overseas organizations, by means of digital-signature and cross-certification technologies. When a Japanese company performs an electronic transaction with a company overseas, the issuance of certificates to individuals and corporations within Japan is carried out by a certification authority (CA) in Japan, but the issuance of certificates to overseas business partners is carried out by a foreign CA. In this case, when an individual or corporation in Japan carries out a transaction with an overseas business partner having a certificate, cross-certification is vital between the foreign CA and the CA in Japan.

1.On-line shopping and electronic publishing on the JapanNet mall (Figure 4)

This application, used in business-to-consumer transactions, allows on-line shopping (sale of physical goods) and electronic publishing (sale of digital content) on an electronic mall built within JapanNet, in a secure environment using the JapanNet certification system (complying with the secure electronic transaction [SET] protocol).

Schedule

Establishment of CAs (for a limited membership):

November 1, 1996

Off-line issuance of certificates and on-line credit-card payment: End of December 1996

On-line issuance of certificates:

End of January 1997

Contact information:

E-mail: [email protected]

URL: http://www.japannet.or.jp

Mr. Yoshito Nakamura

Mitsubishi Corporation

Tel: +81-3-3210-9486

Fax: +81-3-3210-9495

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p52-53.htm

Objectives

In the West, various EC testbed projects have already been implemented, but satisfactory technology has yet to be established in areas such as encryption, certification, and payment, which are absolutely vital to the realization of EC. Besides, commercial practices in the West differ from those in Japan, and cannot easily be transplanted here without modification.

The aim of this testbed project is to realize the infrastructure for the creation of a new electronic market. To this end, transactions will be carried experimentally by electronic means on the open network, in the light of Western precedents, and giving consideration to Japan's own commercial practices. A low-cost electronic payment system capable of accommodating small-value settlements, and a rigorous personal authentication system using IC cards, will also be established.

The structure of the Smart Collar Club Home Page

Five theme venues will be run on this homepage.

Information Center

The Information Center will offer introductory information and contact addresses for members.

Virtual Convention Center

This will consist of general exhibition hall where members of the Smart Collar Club can post information, an event hall, which can be used by member companies to hold a variety of events, and an international convention site, which can be used to post national and international Internet-related information, information about events and conventions to be held at physical convention centers, and so on.

Virtual Shopping Mall

This permanent virtual shopping mall will be equipped with an infrastructure allowing card payment and small-value payment.

World Wide Shopping Center

This center will provide an environment-equipped with encryption as strong as anything America has to offer-where world-wide commerce can be carried out.

Cyber Techno Museum

On this page, experiments will be carried out using HotJava, VRML, and other new tool technologies, and information will be posted on research and development activities aimed at creating the technology of the 21st century.

The structure of the Smart Collar Club's electronic payment system

A combined virtual bank system and credit-card system

The Smart Collar Club's electronic payment system offers a choice of two electronic payment systems. In one system, which uses the tried-and-tested account transfer set-up, a virtual bank issues checks. The other is a credit-card system based on SET, the de-facto international standard. This twin-pronged approach makes it possible to accommodate electronic payment across a wide size range, from the small-value payments involved in digital content transactions, to the standard amounts involved in mail-order sales. The virtual bank system has an added facility allowing a limit to be set on the amount that can be withdrawn from a virtual account. As operations expand in the future, many more facilities can be added: for example, the user could be allowed to access specific details of product purchases made through the virtual bank, and to check the balance on his or her virtual bank account.

An electronic payment system with room for future expansion

A wide range of payment systems will be provided, including systems for credit-, debit-, and prepaid cards, and for collection services.

Convenient services will be made available to non-cardholders.

Internet payment methods will be offered to young consumers who are ineligible to be cardholders due to restrictions on minimum age and income.

Electronic payment functions will be made available to independent sites.

Basic policy for system design

The development period, the development running cost, and the restrictions imposed by relevant legislation must all be factored into the design of the system. This can be done either by taking an existing system and improving it, or else by creating a completely new design. The system's distribution potential must be determined by whether it is intended for domestic or international use. The system must also meet the demands of social acceptability in terms of convenience, cheapness (i.e. not placing an unreasonable financial burden on the user) and operational security.

The issue of anonymity must also be borne in mind. Transactions carried out on the Internet will be recorded on access logs, defeating the purpose of making electronic money anonymous.

Preserving anonymity forces costs up, so tracing carried out to prevent improper use utilizes as far as possible the tracing effect produced by the use of the digital notary function provided by the bank.

Risks include improper use by means of impersonation, tampering en route, contract repudiation, and illegally inflated requests from dishonest retailers. To guard against having money siphoned off through dummy accounts, a virtual bank account will only be set up on condition that the user already has a conventional account at the bank.

To hedge the risk, electronic personal authentication will be carried out using electronic payment protocols complying with the SET standard. Risk will also be minimized by using communications protocols such as SSL, by ensuring transaction security, and by limiting the amount of money the account-holder can withdraw in one month. Goods on sale will be protected by ingenious measures (by offering content in small-value lots, for example), and the tenants of the virtual shopping mall will form mutual aid cooperatives as a hedge against unforeseen accidents.

Schedule

Start of credit-card payment: April 1997

Start of payment through virtual banks:

January 1997

Contact information:

URL: http://www.infoweb.or.jp/mriscc/

Mr. Yoshishige Katori

Mitsubishi Research Institute Inc.

Tel: +81-3-3277-0550

Fax: +81-3-3277-0568

E-mail: [email protected]



source: http://www.ecom.or.jp/eng/ecom-today/no1/p54-55.htm

Cybernet Club

Objectives

Thanks to recent technological strides and the growing use of the personal computer as an ordinary household item, goods and services have begun to be sold over the Internet. This has increased the need for a complete transaction, including bill settlement, to be carried out on the network. With a view to creating EC payment schemes to form the next generation of payment systems, this project aims to provide a payment scheme, based on digital signatures, fulfilling users' desire for the full range of payment means on the Cybernet. The project's goal is to build a scheme complementing conventional payment schemes, covering business-to-consumer transactions, internal business transactions, and business-to-business transactions, and making it safe for everybody to do business over the Internet.

The project will also establish a third-party personal-authentication body (the Cyber Passport Center) to be used throughout the world, and will provide facilities for the authentication of all parties involved in cyber-transactions: namely users, participating merchant stores, card companies, and payment gateways.

In order to prevent misuse by dishonest third parties, theft, and stealage of members' credit-card numbers, and to adhere to the security of personal information, Japan's own standard for open and highly secure payment protocols will be established using the SECE protocol. This protocol is based on SET and adapted to Japan's commercial customs. Looking further ahead, interoperability with overseas payment protocols will be assured (and another testbed project will be implemented to experiment with borderless credit payment).

Using a security system provided by Hitachi, Ltd. and Fujitsu, Ltd., and a whole raft of encryption techniques, this testbed project will pave the way for a payment scheme providing the consumer with increased convenience and security.

Outline

The payment scheme developed through this project will later be used by a number of malls, most notably as the Cyber 66 (a project implemented by UC Cybermall of UC CARD Co., Ltd. and the Mori Building Consortium, in the form of a virtual city built on the Internet, designed as an experimental simulation of the physical Roppongi 6-chome Redevelopment Project due for completion in 2001). Spearheaded by UC, its parent banks (The Dai-Ichi Kangyo Bank, Ltd.; The Fuji Bank, Ltd.; The Asahi Bank, Ltd.; and The Sakura Bank, Ltd.) and other major companies including Mastercard International, a personal-authentication body will be created in the form of the "Cyber Passport Center," and this body will issue authentication certificates on-line, using digitized information.

The transaction schema is shown in the diagram shown on the right.

The certification authority (CA) mentioned above (the Cyber Passport Center) will act as a hub linking cardholders, participating enterprises, and card companies. A completely new element known as the gateway will play an important role in the infrastructure of electronic commerce. Internet links will be used between the cardholders and the participating enterprises, and between the participating enterprises and the gateway, so that messages, protected by encryption, can be sent between these parties. This encryption will be applied to all messages, even those sent from the members to the CA, because they all travel over the open Internet.

Special cards, used exclusively for this trial, will be issued in the form of "UC Cybernet cards," usable in conventional physical stores as well as in virtual stores on the Internet. Cardholders will be able to enjoy on-line shopping in the UC Mall.

Schedule

First phase: June 1996: 1,000 consumer monitors

Second phase: March 1997:

10,000 consumer monitors

Third phase: June 1997:

100,000 consumer monitors

Contact information:

Mr. Morihiro Wada

UC CARD Co., Ltd.

Tel: +81-3-5531-6347

E-mail: [email protected]



source: http://www.ecom.or.jp/eng/ecom-today/no1/p56-57.htm

Outline

The payment infrastructure underpinning Japan's consumer society includes a variety of media, such as cash, credit-cards, bills, bank transfers, and prepaid cards. The overwhelming majority of small-value payments are made in cash, and it would be helpful if small-value payments could be carried out in the electronic realm using IC cards.

In recent years, the environment surrounding IC cards in the arena of EC has undergone the following upheavals:

- Electronic money has come into use, in testbed projects and in "real life."

- The challenges of IC card-data encryption and certification functions are being addressed.

- The need for personal authentication in on-line shopping on the Internet is being perceived and addressed.

Japan, like any other country, needs a electronic money system adapted to its own legal and financial systems, and geared to its own commercial practices. This system will also need to be flexible, and make provision for compatibility with international systems. Again, like any other country, Japan must arm herself against the many and varied risks (forgery, etc.) posed by electronic money, and press ahead with research into countermeasures using encryption, certification functions, and the like.

The aim of this project

The aim of this project is to develop a shared technology for a high-security electronic money system capable of being phased in seamlessly throughout Japan. It is envisaged that, in this electronic money system, the electronic money will be issued by financial institutions or by Japan's government-affiliated bodies. Once the system has been developed, it will be implemented as another testbed project (schedule to be announced) involving Japan's leading financial institutions.

The aims of this project are as follows:

- To use high-security IC cards based on a card-to-card protocol

(The proposed system will operate on the principle that electronic money can always be transferred from one IC card to another. IC cards will then be installed in retailer terminals and ATMs, so that payment can be carried out by transferring the value, in a secure manner, from the customer's IC card to the IC card inside the terminal.)

- To provide high-convenience, high-security terminals for consumers and retailers, based on a card-to-card protocol designed to our own specifications

- To build a Money Management Center.

The Money Management Center will carry out centralized control of the total amount of electronic money to be issued by the financial institutions, and will also act as the central facility for the issuance of electronic money. The value of sales made by retailers will flow back to the Money Management Center.

Scheme for electronic money testbed project stage

The players needed to bring this system into actual operation, are the financial institutions which will issue the electronic money, and the mall (i.e. the participating enterprises) where consumers can spend their electronic money. Negotiations are now in progress with the financial institutions who are to take part in this scheme.

Development

The electronic money in this system will be issued by the banks. The user will open an account at a bank, and will then use the bank's ATM or a special IC card telephone to draw money out of this account and load its value, via the Money Management Center, onto his or her IC card.

When the user makes a purchase at a participating enterprise, payment will be carried out on-line using electronic money, and the value of the purchase will be transferred from the customer's IC card to the IC card installed in the store's terminal. The value stored in the store's terminal will later flow back from the store's terminal to the Money Management Center. The components required for this system are shown in Figure 1.

IC cards to be used

The IC cards used in this system will be MCU cards with a co-processor for RSA computation, and will comply with ISO standards. Our own card-to-card protocol will be installed on the processor in each card.

Card-to-card protocol (card security)

An electronic money system using IC cards needs an infrastructure which prevents fraud and allows secure payment processing and secure transferring of electronic money. In a card-to-card protocol, the RSA public key encryption system and the DES shared key encryption system are both used, obtaining the following advantages:

- IC cards are stored inside the terminals used for payment, and at the Money Management Center, and the value of the transaction is moved safely from one IC card to the other.

- Digital signature technology is used to specify the parties involved in the communication, and to prevent fraud occurring when value is transferred between IC cards.

To allow the use of RSA public key encryption processing, four different keys are stored on each IC card when it is issued. These are:

(1) The RSA private key

(2) The public key bearing the digital signature of the issuing body

(3) The public key of the issuing body

(4) The DES shared key.

Contact information:

Mr. Yojiro Nakayama

Information Communication Systems Business Head Office

EC Project Promotion Center

Oki Electric Industry Co., Ltd.

Tel: +81-3-3454-2111 Ext. 6909

Fax: +81-3-3798-8495

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p58-59.htm

Background and objectives

In view of the recent surge in the growth of the Internet and the use of network communications by home computer users, businesses and local authorities have shown an increasing interest in using the Internet for commercial purposes.

EC offers many considerable benefits, including:

- Low cost in terms of personnel, shop floor and equipment investment, and marketing

- Opportunities to speed up and rationalize commercial transactions

- Availability of a vast range of information, broadening the range of choice available to the consumer.

However, it also poses a large number of problems, including:

- The need to ensure personal authentication in the payment of bills, and to ensure the security of pin numbers

- The need to accommodate radical changes in the patterns of commerce and in the structure of manufacturing industry.

The Cyber Commerce City (CCC) Consortium has been established, with a membership drawn from the leading enterprises of the Kansai region. Its purpose is to study the problems described above, and devise solutions for them, proceeding to implement an EC testbed project based in the Kansai region, with a national perspective. The CCC Consortium will use the results of the testbed project to create new markets and stimulate economic activity.

Main features of the CCC project

(1) The project embraces the whole of the Kansai region

Besides linking together a wide network of enterprises representing the Kansai region, the CCC project is also enlisting the cooperation of the region's self-governing bodies and stimulating the operations of local industry and small businesses. The project's infrastructure also makes it easy for local industry in the area hit by the Great Hanshin Earthquake to participate in the EC testbed project.

(2) The project uses an open system

Because it will involve a high level of Internet use, the project is based on an open system. The project's main installation, located at Mydome Osaka, will be organically linked to the Kyoto Subcenter and to the credit companies. This network forms the EC testbed, which includes an electronic payment system and a product search system, among other components.

This project will also be linked to EC projects run by groups in other regions of Japan and implemented simultaneously. The certification system, encryption, settlement system and other key technologies will be shared by all the projects.

Details of the EC testbed project

(1) Testbed project taskforce

The CCC project has a membership consisting of 24 supporting member enterprises (mainly department stores, large general merchandise stores and manufacturing enterprises), plus more than 100 general member enterprises (including small businesses and stores) and participating enterprises. The enterprises and enterprise groups who are to be the project players will be selected from the membership, to form taskforces. The players will set their own objectives for participation in the testbed project, and then carry out their commercial activities on this basis. In the process, they will shed light on the benefits and problems of EC.

(2) Consumer monitors

An appraisal of the EC from the consumer's point of view will be implemented by recruiting more than 5,000 consumers to act as monitors. These monitors will be asked to report on their experience of and reactions to the following:

- Electronic payment using credit cards

- Product presentation adapted to multimedia technology.

They will also be asked to participate in a CCC monitor forum held on the Internet, where they can exchange information and compare notes.

(3) Items to be assessed and verified by the testbed project

Points to be addressed from the viewpoint of the EC world that already exists:

- The possibility, for existing businesses, of expanding their use of EC, or moving all their commerce into the electronic realm

- Ways in which stores and malls can apply their marketing strategies to EC.

Points to be addressed from the viewpoint of the new world that will open up thanks to EC:

- New products taking advantage of the functions and properties of EC

- New markets taking advantage of the functions and properties of EC

- How the consumer is viewed in EC.

Points to be addressed from the viewpoint of what is needed in order to make EC a reality:

- Product presentation using multimedia

- Product presentation providing an extra service function

- The extent to which the product search facility meets the requirements of the consumer

- The establishment of certification and payment functions as part of the fabric of society.

Outline of the CCC Mall

The illustration shows the top page of the CCC Mall. Initially, four standard methods will be available for selecting goods on sale at the CCC Mall. These are as follows.

(1) Selecting from the list of stores

The user makes a selection from a list of the stores put up in the CCC Mall by the CCC member enterprises.

(2) Selecting from a list of product categories

The user's choices are no longer bound by the limitations of a physical store, enabling a selection from a list of products arranged by product categories such as electrical appliances, stationery, books, clothes, haberdashery, and so on.

(3) Searching for a specific product

The user makes use of the newly developed product search facility to search for the desired product by means of keywords and wildcards.

(4) Selecting by region

The user selects stores by region (Kyoto, Kobe, and so on).

As new EC projects come into play in the future, new pages will be added. These could include a new products corner, a corner for stores recommended by the CCC Mall, and so on.

Schedule

- Establishment of consortium: May 30, 1996

- Publication of Home Page: June 24, 1996

- Start of mall operations: October 21, 1996

- Start of consumer monitor recruitment:

November 1, 1996

- Start of testbed project: January 1997

- Operational startup of electronic payment facility:

April 1997

- Termination of consortium March 1998

Contact information:

Cyber Commerce City

URL: http://www.CommerceCity.or.jp/

E-mail: [email protected]

Mr. Masamoto Yugami

Manager, CCC Project

Kansai Information Center

Tel: +81-6-346-2641

Fax: +81-6-346-2443

source: http://www.ecom.or.jp/eng/ecom-today/no1/p60-61.htm

Objectives

In this project, a virtual city will be built on the Internet as a testbed for electronic transactions. The ultimate aim of the project is to build an ideal virtual city offering security to the participating enterprises as well as to the consumers.

Structurally, the virtual city will be divided up not by business category, but by function, with one mall for ticket-reservation agencies, another for gift shops, yet another for stores selling bridal wares, and so on.

The malls will be linked together organically by facilities for payment, information searching and so on, producing an entire virtual city which will be used for the following three purposes.

1. To find out how to make EC more attractive to the consumer than catalog shopping

2. To find out what needs to be done in order to provide a user-friendly, high-security payment system for business-to-consumer EC

3. To assess the potential of the virtual city as a marketplace.

The idea is not to set up mere virtual replicas of physical stores, but to create a virtual city which subtly combines virtuality, reality and locality to give a sense of congregation and reliability.

The project is also intended to help stimulate manufacturing industry in the Chubu region.

Outline

Secure electronic-commerce environment (SECE) protocols-settlement protocols complying with the SET standard-will be used on the Internet, to create a virtual city offering security both to the stores (information providers) and the users (consumers). In terms of structure, the parts of the virtual city will be differentiated not only by business category, but also by function. The virtual city will be linked to databases and using SECE protocols, offering an "urban space" with excellent facilities for payment and information searching. The virtual city will also have on-line connections to distribution companies, so that delivery instructions can be issued, and delivery results received. The purchaser will have his or her own purchase log, and will be able to trace the delivery route of the goods purchased.

The project will provide a means for assessing the product presentation and a secure and user-friendly payment system from the user's point of view. In practical terms, this will mean making every effort to create a visually comfortable and easily graspable user interface using technologies such as VRML, JAVA, and Shock Wave.

The whole interface will be designed to help the consumer find the right product: besides the data-driven search facility and the search-by-product-category facility, the functional subdivision of the virtual city constitutes a search facility in itself. The gift mall, for example, will be designed to offer maximum convenience to the consumer: when a gift is purchased, a record showing the address to which the gift was sent, and details of the gift selected, will be sent to the home address of the user, who will be a registered "resident" of MEDIAPORT NAGOYA. This facility will be designed to accommodate gifts sent by corporations as well as individuals.

Secure and user-friendly payment will be made available as follows: instead of having payment carried out separately by each store, payment transactions generated at all enterprises in MEDIAPORT NAGOYA will be held in a "basket," and processed on a batch basis.

From the viewpoint of the participating enterprises, the virtual city offers the means to shorten distribution times, create new, information-based businesses, and carry out two-way marketing. Using this testbed, the participating enterprises will be able to find the answers to many questions: for example, which products and services best lend themselves to electronic commerce, whether price or product quality is the key to success, what impact advertising has in the electronic medium, what type of consumer reacts to which type advertising, and so on.

The schematic diagram of this testbed project is based on the principle that all the parties involved apart from the distribution companies-that is, the content providers, MEDIAPORT NAGOYA, the users and the payment gateways-will be subject to certification. To make it easier for small businesses to set up virtual stores in this testbed, and to make the setting up of virtual stores and virtual products easier in general, the content providers will be connected via the Internet. This will allow the content providers to add and delete products to and from their ranges whenever they like, and to run special offers between specific dates.

The results expected of this testbed project are as follows: new techniques will be acquired for effective presentation and on-line marketing as opposed to conventional retailing, and new business operations will be cultivated and stimulated in the Chubu region.

The testbed project will have upwards of 5,000 consumer members, and 300 participating enterprises will be running stores and providing services in the virtual city.

Contact information:

Mr. Naoji Shinpo

Meitetsu Computer Service Co., Ltd.

Tel: +81-52-589-2472

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p62-63.htm

Background

Smart Commerce Japan was founded as a testbed market where enterprises can cooperate in research and investigation into business-to-consumer EC. In this testbed project, organizations with different missions will work together on developing technology for security in business-to-consumer EC using encryption, certification and payment technologies, and on bringing consumers into the world of EC.

Themes to be pursued

A key component of this testbed project is the use of IC cards conforming to EMV specifications. In this experiment, these IC cards will have the function of conventional credit cards, but will also function as stored-value cards (SVCs) used to carry out small-value payment transactions at low cost.

For maximum consumer convenience, the EC market created in this project will consist of a Real Mall and a Virtual Mall. The payment system will be essentially the same in both malls.

Testbed project outline

Each of the participants in this project (numbering about 30,000 in all) will be issued with an IC card with a magnetic strip, which can be used instead of a conventional credit card. In the Real Mall, participants will be able to use their SVCs for payment, as an alternative to credit cards. When using the SVC for payment, the cardholder will be able to check his or her SVC balance and purchase log, using a personal card-reader with a liquid-crystal display and a simple keypad. The participants will be able to access the Virtual Mall at home, from a personal computers connected to an IC card-reader/writer, or from a commercial installation in the form of a kiosk terminal. In either case, when a participant makes a purchase, the IC card is used for personal authentication purposes, and payment is carried out using its credit-card function. The kiosk terminal is a new installation which can be used by unspecified numbers of consumers. These terminals are set up in the Real Mall to give users access to the services of the Virtual Mall.

The IC cards utilized in this testbed project can be used as both credit cards and SVCs, in the Virtual Mall and in the Real Mall too. In other words, different types of payment can be carried out using the one card. These IC cards also make it possible to carry out personal authentication and cross-certification, which are the technologies most vital to commerce on the network.

This project will include an experiment on the use of IC cards as electronic purses. To this end, reloading terminals (where the SVCs can be "loaded" with a given monetary value) will be installed in commercial facilities heavily used by consumers.

This testbed project will make it possible to study patterns of consumption behavior in the Real Mall and the Virtual Mall, based on the consumer activities described above.

Testbed Project system structure

In the Real Mall, POS terminals adapted for the new IC cards, or credit authorization terminals (CATs) will be used. SVCs can also be used on these types of terminals, but credit payment can be carried out on CATs and POS terminals not adapted for IC cards, using the magnetic strip on the card.

The consumers can use their own personal computers, or public kiosk terminals, to access goods and services made available by the information providers on the Virtual Mall.

Payment will be carried out using credit cards and SVCs. Payment systems will have to be coordinated so that from the user's viewpoint, goods and services can be obtained in much the same way in either of the malls. The effectiveness of IC cards as a means of personal authentication and payment will be assessed, allowing the participating enterprises to carry out an exercise in test-marketing. By running stores simultaneously on both the Real and Virtual Malls, these enterprises will be able to find out what level of consumer support their stores receive, what happens when prices are altered, and so on.

Schedule

Real Mall Testbed Project: To be phased in from April 1997

Virtual Mall Testbed Project: To be phased in from June 1997

Contact Information:

Mr. Yasuhiro Matsumoto

Toshiba Corp.

Tel: +81-3-3457-2652

Fax: +81-3-5444-9336

E-mail: [email protected]

IP Department stores Supermarkets Hotels Travel agencies Amusement places ...

VIRTUAL MALL REAL MALL

Payment Payment system (credit, SVC)

Security Encryption/Certification

Network Network (Internet, VAN, WAN)

Terminal PC Kiosk Reload POS CAT

Consumer IC card Magnetic card

VIRTUAL MALL

IP

Bank

Credit-card

company

Kiosk

INTERNET

Payment

network

Certification.

Payment

Home

Reload terminal

Sales

REAL MALL

PC

Orders

source: http://www.ecom.or.jp/eng/ecom-today/no1/p64-65.htm

Outline

The product exhibition content will be held in WWW servers. Each server will be connected to the Internet to allow free access to the exhibition content from anywhere in the world. In addition to exhibition data, each server will also be configured with a user access recorder to collect information on user behavior within the site. Individual site access loads will be compared for test purposes and the efficacy of the retrieval system will also be tested.

Background

There are generally held to be three major problem areas that will need to be tackled if EC is to become more widely used.

1. The security and reliability of communications will need to be improved.

2. Systems providing product information will need to be linked with existing systems for the management of internal corporate functions such as incoming orders and purchasing.

3. Systems will need to present information in a way which is attractive to users.

The problem referred to in "1. The security and reliability of communications will need to be improved." above is currently being tackled on several fronts through the development of electronic money and security protocols.

The problem referred to in "2. Systems providing product information will need to be linked with existing systems for the management of internal corporate functions such as incoming orders and purchasing." above is not easily dealt with by a general testbed procedure of this sort since it relates to the connection of individual company data systems to the Internet and must as such be dealt with by the companies themselves.

The third problem referred to in "3. Systems will need to present information in a way which is attractive to users." above can be approached from two main angles.

The first approach involves "supplying users with the information they want in just the right amounts." The supply of information through the Internet is increasing at an explosive rate with the result that relevant data is being submerged in an ocean of irrelevant data (or "noise"), thereby making it difficult for the individual to find what he/she wants. It is also difficult for the individual to determine whether the information he/she has obtained is up-to-date or not. Some virtual exhibitions presented on the Internet also offer their users product retrieval functions based on the use of database techniques. Unfortunately, however, these functions tend as yet to be inadequate and users find they are either unable to find what they want or else they are obliged to wade through long lists of data most of which they are not interested in. There is thus a clear need for virtual exhibitions to provide their users with just the right amount (i.e. neither too much nor too little) of relevant up-to-the-minute information.

The second approach involves "providing reliable and appropriate access to data." If users are unable to gain access due to server congestion or find it takes an extremely long time to download the information they require, they are simply going to stop using that particular service. If information is to be presented in a way which is interesting to potential users, it must be capable of reliable and speedy access.

Outline of the testbed project

In light of the difficulties outlined above, the testbed project was set up to examine the implementation of virtual exhibitions on the Internet. The area of primary concern for the purposes of the present project, namely the "need for systems to offer information in a way which is attractive to users," will be approached with two objectives in view: development through experiment of software of the sort outlined below and the establishment of a framework for the realization of large-scale virtual exhibitions.

- Exhibition applications

- Data navigation mechanism

- Mechanism for the distribution of load between servers

- Mechanism for the synchronization of content between servers

(1) Verification of the possibility of data navigation

The first objective involves "supplying users with the information they want in just the right amounts." To achieve this end, it is necessary first to visualize "what it is the user is looking for" and then to ensure that, from the huge amount of available data, "the user can access the information he/she particularly wants in a format that is easy to understand."

The achievement of this end raises questions in a number of areas relating, for example, to data filtering, high-speed text searches, and the construction of a high-speed database. The present project will look to test data navigation techniques with a view to establishing the as yet uncharted links between user interests, retrieval systems and the manner in which retrieved data is displayed on screen. This will enable us to find ways of retrieving and presenting data that conform to users' attributes and reasons for visiting a site and, in so doing, to make it possible for users to gain easy access to the information they particularly want.

More specifically, the experiment has been designed to present users with a variety of product data retrieval systems and systems for the "virtual" presentation of retrieved data, as provided by an unspecified group of organizations offering virtual exhibitions on the Internet. The ultimate object is to establish whether or not there are differences between users in the sorts of retrieval and presentation systems they prefer that can be put down to differences between users in terms of their objectives, attributes and the contents of their inquiries (i.e. the types of products about which they require information).

(2) Tests relating to the design and control of server load distribution

The second approach involves the "provision of reliable and appropriate access to data."

The most effective way of ensuring the successful completion of multiple access requirements or, in other words, of ensuring minimal access duration and large-scale throughput would be to install broadband communication lines and increase server capacity. However, given that there are limits to the improvements that can be made to individual lines and servers in terms of the introduction of broadband and additional server capacity, and given that there is a significant reduction in cost efficiency for any capacity added over and above these limits, site distribution would seem to be a more efficient way of adding capacity over and above these limits. Since the Internet is made up of a complex pattern of mutual interconnections and since site functions are also configured with the help of appropriate design and control features from a similarly complex set of mutual interconnections, if design and control features can be used to create a suitably distributed set of functions for a particular site, that site may be expected to provide a considerably more efficient service than a single isolated site based on otherwise identical line and server capacity. The question of site capacity distribution can thus be said to have an important role to play in encouraging the more widespread use of EC.

The present project will include a program to test design and control techniques for server distribution. It is hoped that this will go some way towards enabling equivalent resources to be used for the provision of high quality services to a larger number of users.

Implementation of the testbed project

The object of the project is to construct a system for the provision of virtual product data (Virtual Expo) over the Internet and to devise and test the comparative merits of a number of different data navigation systems and system load sharing techniques. Virtual Expo will be implemented for at least one month. Preliminary and additional testing will be carried out as and when necessary.

The figure illustrates the basic concept of a product data supply system (provisional name: Virtual Expo).

Contact information:

Mr. Masaki Kajiura

NTT Data Corporation

E-mail: [email protected]

Tel: +81-44-548-4639

Fax: +81-44-548-4695

source: http://www.ecom.or.jp/eng/ecom-today/no1/p66-67.htm

Outline

Virtual City is intended as a means of establishing the nature of the whole consumer buying process from the initial motivation through purchase to on-line settlement. By constructing a virtual city on an open network to act as a venue for the realization of electronic commerce, our intention is to establish close communication with the consumer and, in so doing, to provide him/her with products that better suit his/her needs.

The full testbed system will consist of:

- "Virtual Mall system" offering a range of attractive goods and secure settlement

- "Super Multimedia Kiosk (SMMK) system" which will be set up in public buildings, stations, department stores, and so on

- "product image data system" which will create a database of product images for use by the other systems

- "payment system" for the electronic payment of debts by credit card, bank deposit, etc.

The above systems will each be supplemented by a suitable "security system."

A concept drawing of the whole system is shown in Figure 1 below.

The visions

Virtual City will differ from the more simple forms of electronic shopping mall seen to date in that it is intended to give rise to new business based on the following four "visions":

- Generation of global commerce

- Development of local industries

- Amplification of public services

- Achievement of consumer-friendly services.

Main contents and features of the testbed project verification experiments

An outline of each experiment is shown in Figure 2.

In addition to the "products" offered for sale in the sorts of electronic shopping sites on the Internet today, Virtual City will extend the scope of electronic commerce by also offering "information" and "services" for sale. In the case of "information" in particular, the digital nature of the product will enable small-lot information sales to be made simply by downloading the product once purchased.

Figure 3 illustrates the concept of small-lot information sales.

Schedule

May 1997: Inauguration of verification service based on major functions of Virtual City

Forums will be mounted as and when necessary.

Contact information:

NEC Corp.

EC Center (Marketing Dept.)

Tel: +81-3-3798-7340

Fax: +81-3-3798-7339

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p68-69.htm

Objectives

The present project is based on the notion that dealings with organizations of a public nature such as local government agencies and public utilities (hereafter, "public organizations") could be made simpler and more efficient from the user's point of view.

For example, when a person changes his/her address, he/she is obliged by law to report the change to his/her local authority. Similarly in the case of essential services such as electricity, gas, water, TV, finance, post, telephone, and so on, the user will need to cancel the service at his/her old address and apply for a new service at the new address.

There must be many who have thought to themselves, "How much easier it would be if I only had to report this once." It is hoped that by providing a single electronic contact point through which all these necessary procedures can be processed at the same time, it will be possible to provide a "one-stop service" which will meet the public's need for a more straightforward way of dealing with the procedural requirements of local public agencies and public organizations.

The object of the present project is to create a one-stop service environment and test its technical potential and efficacy with the ultimate aim of increasing the procedural ease and efficiency of the user contact point while at the same time providing a more efficient means for local government agencies and public organizations to process the related office work. With the help of this series of tests, we hope eventually to identify operational and systematic problems and in so doing to obtain some insight into how best to encourage the use of this kind of one-stop service, thereby creating a foundation for future expansion and development as the user contact point is brought closer to the home and made into a permanent feature of the system.

Outline

The following figure illustrates the basic concept of the one-stop service system.

It will thus be possible for a user to input data via a single user contact point (public terminal) after which the data will be transferred to a downstream virtual center which will distribute them as appropriate to the various public agencies and other public organizations to which it is connected. Responses from each of the relevant public agencies and organizations will be collated by the virtual center and returned to the user by way of the public terminal. In short, the concept provides for the completion of a full range of official formalities through the medium of a single user contact point.

In order to use the system, the user will state his/her business in response to questions posed by an interactive public terminal. The user will select the agencies to which he/she wishes to report and input individual agency specific data in the same way. Once input is complete, the input data will be transferred to a virtual center. Acting as a kind of agent, the virtual center will then sort and distribute the data as necessary to the various agencies and request each of them to process the data as required. The public agencies will process the data as requested and return the results to the virtual center. The virtual center will collate the results as they come back and, after carrying out digital notary, it will certify the proceedings and return the results to the user by way of the public terminal. For their part local authorities will do their best to integrate their user contact point procedures such that all the official records relating to a particular user including their national health insurance record, their state pension record and their child allowance record can be updated at the same time as their residence record.

The project itself has been set up in Koshoku City in Nagano Prefecture. In addition to the municipal corporation of Koshoku City, Chubu Electric Power Co., Inc., the gas and water departments of Nagano Prefectural Business Bureau and the Hachijuni Bank, Ltd. will also take part in the capacity of public agencies or organizations, Densan Co., Ltd. will provide the data processing and communications expertise, and the whole project will be run under the auspices of the "Integrated Electronic Public Services Systems Association," which has been set up expressly for the purpose.

The association has occupied itself primarily with the discussion of matters such as the importance of conforming to the law as it stands today and of taking strict measures to ensure the protection of personal data. It has also confirmed its determination to press ahead with the project based on these preconditions. For example, given the existence of legal requirements relating to the submission of signed and/or sealed documents and the restriction of public access to the main residence register, provision has been made not only for the establishment of public terminals in local government offices to facilitate the immediate submission of supporting documentation, but also for the submission of electronic data prepared off-line and stored on floppy disk. Provision has also been made to ensure that personal data is protected by the use of security devices such as data encryption and access control.

The tests themselves will be divided into two main categories: monitor tests and operation tests. The monitor tests will be simulation tests designed to ascertain the usability of the public terminals, to measure the psychological effect of the public terminal environment on users and to determine the ideal format of user services. In establishing the usability of the terminals, the key point will be how best to bring the input method and the prompting technique, as determined by the degree of user understanding, towards the level of perfection required. In testing the input environment, the main focuses of attention will be how well booth privacy and the nature of the screen display during input can be arranged to prevent the user from becoming anxious, tired or impatient, and how much feedback need be provided for users of different services on completion of the necessary formalities.

The operational tests for users who actually need to carry out the procedures in question will be designed to establish usability from the point of view of not only of the users themselves but also of local authorities and of other public organizations. In the case of users, for example, the accent will be on whether the user finds the procedures easy to complete and whether or not efficiency is improved. In the case of local authorities, we will be looking to establish whether reports and applications made by floppy disk can be processed more easily and more efficiently than otherwise. In the case of other public organizations, the question will be whether or not the replacement of the old style verbal approach by fixed format electronic data submission will improve the level of reliability.

Our master schedule calls for the initiation of monitoring tests in July 1997 with operational testing to be carried out in the following September through December.

Contact information:

Mr. Hiroo Kanabako

Sales Dept.

Tokyo Business Head Office

Densan Co., Ltd.

Tel: +81-3-3432-8100

Fax: +81-3-3432-6699

source: http://www.ecom.or.jp/eng/ecom-today/no1/p70-71.htm

Objectives

To encourage the rapid growth of EC in Japan, the immediate object of the present project is to reduce transaction costs by developing a system platform which does not rely on the use of additional paraphernalia such as IC cards but which exploits instead the technique of automatic account transfers-a unique feature of the Japanese credit card system.

It is a further object of this project to test and establish the efficacy not just of a given security technique but of an entire system for protection of the security of everyone involved in electronic commerce from consumers through to commercial outlets and credit card companies and, in so doing, to establish a security management function based on the Japanese model.

Test features

Practical commercial testing

Monitor members and outlets will be canvassed and selected respondents used for real commercial testing. There will be nothing virtual about these tests. They will be based on real transactions between real customers and real outlets.

Cardless card system

This is a card system which does not require the issue of a physical card as such. However, while testing is in progress, there will inevitably be some risk involved while adjustment of the contractual relationship is also likely to prove extremely difficult to deal with. For this reason, the test will be confined to monitor members to whom real cyber cards will be issued for the purpose. We are currently considering using this same approach to test other cards such as electronic prepaid cards as well.

Security

To protect private data such as credit card numbers and personal details, the system will make use of an encryption and certification system based on the use of public keys and digital signatures. An RSA 1024 bit-key-length encryption key will be used for public keys and a DES 56 bit-key-length encryption key will be used for shared keys.

Integration of credit and certification

For the purpose of integrating credit and certification, the creditor providing credit to a cardholder will issue the relevant certificate on the network. To this end, certification authority systems will be set up inside card companies and certificates will be issued on-line to cyber cardholders.

User needs survey

A series of tests will be carried out to ascertain the sorts of user needs that are not normally taken into account for the purposes of electronic commerce. The results of these tests will then be used to identify conditions that would make for the creation of a more user-friendly platform while at the same time ascertaining what the providers of virtual shopping must do to ensure more user-friendly shopping.

Outlet needs survey

A series of tests will be carried out to ascertain the needs of companies that set up virtual shopping outlets. The results of these tests will then be used to identify conditions that would make for the creation of a more user-friendly platform while at the same time ascertaining what the providers of virtual shopping must do to ensure more user-friendly shopping.

Commercial business system development

Business transactions conducted through the medium of virtual outlets will involve the use of new rules and business practices on the part of consumers, shop operators, and card companies alike. Establishing such rules and practices are much harder than overcoming the technical problems pertaining to the maintenance of secrecy during communication. As part of the testbed project, the present series of tests will be carried out with a view to developing and operating a business system that will preserve consistency with existing business practices while at the same time ensuring that the security of the system is not breached.

Nature of tests

The tests themselves will be purchasing tests carried out with the cooperation of consumers, outlets, and card companies. From the point of view of promoting the rapid growth of EC, we will be looking particularly to encourage home use of the system. For the purpose of the present purchasing test, we will first recruit consumers to act as monitor members. The monitor members will next be issued with cyber cards and as cardholders, they will then be required to do shop from time to time at virtual outlets.

It is assumed that payments carried out as part of the present test will involve quite a number of risks and, given the need of the card companies to reduce these risks as far as possible, they will be required to issue the cyber cards used in the experiment. The first purchasing test will be carried out in fiscal 1996 using about 5,000 newly recruited monitor members. In fiscal 1997, we plan to run a second test using some 10,000 or so freshly recruited monitor members.

For test purposes, the monitor members will first make an on-line application to the card company for use of the cyber card network. The card company will respond by calling the applicant by telephone to confirm his/her identity after which it will issue the appropriate certificate. The monitor member will then be able to use this certificate in commercial transactions to exchange encrypted communications with various entities. Given the basic rationale of the present test, namely that the creditor and the certification authority must be one and the same, this must be the job of the card company.

For the purpose of carrying out a commercial transaction, a monitor member will first access an electronic shopping mall via the Internet and select something he/she wants to buy. To order the chosen item, the monitor member will send his/her order to a payment server using special client software. On receipt of the order, the payment server will pass the order to the virtual store server. The store server will ask the credit card company for authorization and, once the order has been accepted, it will dispatch the selected item as required. The sales invoice issued by the outlet will finally be transmitted to the card company through private lines for batch processing. Given the possibility that transactions may subsequently be canceled for one reason or another, as short a delay as possible will be allowed between the receipt of sales invoices and batch processing.

Requests for credit authorization are currently sent to card companies off-line but from fiscal 1997 onwards this will be done on-line. The current plan is that payment data from virtual retail outlets should be sent up in batches. At present, product information is output and orders are transmitted on-line through the Internet to the store company. Electronic payment is carried out through the medium of a third party.

The electronic mall currently consists of outlets using facilities such as the experimental NRI Cyber Business Park and Denkatsu Club, Sanwa Research Institute's Green Cyber Mall and Daiichi Corporation's Internet Shopping Mall. Another object of this series of tests will be to ascertain the sorts of user needs and virtual shopping site owner needs that have not normally been taken into account for electronic commerce purposes. The results of these tests will then be used to identify conditions that would make for the creation of a more user-friendly platform while at the same time ascertaining what the providers of virtual shopping facilities must do to ensure more user-friendly virtual shopping.

Furthermore, EC is going to involve the use of new rules and business practices on the part of consumers, store owners, and card companies alike. The present series of tests will, therefore, be carried out with a view to developing and operating a business system that will preserve consistency with existing business practices while at the same time ensuring that the security of the system is not breached.

Schedule

Launch of home page: July 29, 1996

Conclusion of first membership agreements:

August 13, 1996

CCP-based electronic payment test:

October 1996 (in progress now)

SECE-based electronic payment test:

September 1997

Contact information:

Mr. Tadashi Tsuji

Nomura Research Institute Ltd.

URL = http://www.ccp.or.jp

Tel: +81-45-336-7168

Fax: +81-45-336-1405

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p74-75.htm

Objectives

Integrated services are a combination of goods and services from different companies offered to the average consumer over the Internet as a package. The object of the present project is to provide the infrastructure necessary for the provision of integrated services by, for example, establishing a standard data format to describe the significance and content of integrated goods and services and by providing a support environment for the creation of integrated services.

Outline

We can expect information relating to integrated services to be presented for users in a more convenient way than that relating to individual goods and services is.

Let us look, for example, at a service whose object would be to offer a user on a fixed budget the optimum aesthetic plan for her.

In the past, a user would have had sat with a calculator at her side and, starting with the purchase of a diet book, would have wandered from one home page to another examining a range of different diet plans offered by various different companies in various different sectors.

In this project, the data that can be viewed using a WWW browser is standardized with the help of an HTML (Hypertext Markup Language). However, HTML is a formatting specification that gives shape to the presentation of information on a browser and has nothing to say about the way in which the significance of that display is presented. In other words, while price data relating to each of the goods and services on offer may be duly converted to electronic form by HTML, the software is incapable of determining whether the display is showing the price in "yen," "¥," or whether there is nothing but figures in the relevant fields and consequently it is equally incapable of processing the price data automatically.

For the presentation of integrated services, therefore, we will need to specify a standard format for the description of significant parts of the data such as price. Providing the data can be described using this new format, it will then be possible to offer a support service to users which would involve, in the present case for example, assembling information from various different companies and sectors and presenting it to the user in the form of an aesthetic plan within the prescribed budget.

Once a standard format has been established, operations such as the assembly of data in different combinations and automatic processing of the data will present little difficulty. For example, we might envisage the emergence of software that could scan the home pages of various used-car dealers automatically and in a systematic way for the purpose of compiling lists of used-cars of a certain age and price.

Again, by making use of the network's capacity for reuse and multiple use of existing data, it should be possible to recombine existing data to generate new business opportunities. If we were to take our used car example a little further, we might envisage the recombination of data from the home pages of (various used-car dealers + the major motor manufacturers + motor magazines), for example, or of (used-car prices + detailed vehicle specifications + reports on impressions derived from test driving the vehicles in question).

The main object of the present project is to develop a standard format for the description of significant data relating to a wide range of goods and services and to construct a trial database using this format. A further object of the present project will be to develop a support environment to combine individual services held in the database to form integrated services.

Contact information:

Mr. Jin Imai

Mr. Chizu Kobayashi

EC Promotion Office, Information Business Head Office

PIA Corporation

Tel: +81-3-3265-5527

E-mail: [email protected]

Example of an Integrated Service for the EC Consumer

1

On-line

counseling service

2 Diet programs

3 Electronic publishing

4 Diet books

I want to look better! I need to diet but I can't afford to spend more than ¥ XXX.

6 Counselor

7 Electronic mail-

order

8 Cosmetic

appliances

9 On-line reservation

services

10 Beauty salons

11 - Electronic publishing (diet book) purchase

Trial link to counseling

- On-line counseling service

Diet menu according to the counselor

- Diet program purchase

Cosmetic aids purchase link, beauty salon link

- Purchase of cosmetic aids by electronic mail-order

- Beauty salon reservation by on-line reservation service

source: http://www.ecom.or.jp/eng/ecom-today/no1/p74-75.htm

What is MHEG?

MHEG specifies a "standard format for the exchange of multimedia data between different types of machine or system." MHEG is being developed under ISO/IEC 13522 and ITU-T.17X. It is envisaged that an MHEG decoder is implemented on a set-top box or adapters for the cable TV reception. This will enable their operation to be controlled from the keypad of a TV remote controller, thereby making the system well-suited to be used in the average family home.

MHEG applications

Uses for MHEG in an EC environment might include the creation of mail-order catalogs (including video and audio), PR-related sales promotion tools, information kiosks (located at the corners of streets, for example), and providing free access to a wide range of information, manuals, etc.

Features of MHEG

MHEG has five main features:

(1) It can be used in the environment in which processing capacity is limited such as a set-top box connected to the TV.

(2) It is premised on the assumption that the user interface will be something simple such as a keypad.

(3) It guarantees the reproduction of created data in the intended manner. In the case of HTML, for example, the presentation may be different depending on the type of a viewer used. In the case of MHEG, by contrast, the presentation is guaranteed same in all cases.

(4) It has the capacity for interactive video and audio control. In other words, the user can use the pause, reverse, and related functions at will.

(5) MHEG data is assumed to be viewed by the end consumer only and not stored for reuse at a later date. In other words, re-editing is not possible.

Required environment

While implementation will necessarily vary from case to case, equipment such as set-top boxes, personal computers, game machines are seen as the most likely platforms. Typical interfaces would include the keypad and the mouse. Transmission would preferably be by way of a high-speed medium such as CATV (cable TV), digital TV broadcasting, CD-ROMs, and LANs (where at least MPEG1 stream can be used to represent video stream).

A comparison between HTML and MHEG

The following table provides a rough comparison between HTML and MHEG. Unlike HTML, for example, MHEG enables the user to control the timing of the presentation by specifying a change of scene every five seconds, say. MHEG also offers the user real-time playback control (video pause, resume, restart, reverse control, etc.) whereas HTML cannot. HTML does have the advantage of MHEG in one respect, however, in that it can offer the user the option of re-editing the material.

HTML MHEG

Screen layout limited Yes

specification

Output timing No Yes

specification

Real-time reproduction No Yes

control

Hyperlink No Yes

Data re-editing No difficult

Merits of standardization

Multimedia is not, of course, obliged to wait for MHEG. There are already a number of products available on the market. MHEG will, however, have the advantage of "relieving the user of his/her dependence on the hardware and software manufacturers for the way in which they present their data." This means that a presentation will be the same regardless of the type of hardware used and the end user will need only one viewer to access any data source. This will help stimulate the distribution and use of information while at the same time reducing the cost of using multimedia-based information.

Range of application of MHEG

On-line shopping,

information kiosk, etc.

* Specification of individual object

presentation position and timing

* Specification of user interface

* Specification of operation

conditions

Characters Still video Motion video

Recording method, transmission protocol, hardware, detailed processing method, etc.

Applications

MHEG

Data encoding

Other functions

It is well known that MPEG is used to encode video and JPEG still pictures. MHEG, by contrast, does not specify any content data encoding. It incorporates functions for the specification of the next layer up, the positioning and timing of presentation. It also provides with the specification of a user interface for interactive use and operation conditions indicated by the author. MHEG does not specify the application layer-the next layer up-which may include on-line shopping and information kiosk. The bottom layer in the diagram provides a specification of the data recording method, the transmission method, the hardware, and the processing method. These areas are not provided with by MHEG and this will therefore be one of the themes of this project.

MHEG interoperability testing

The three main objectives of the present test are:

(1) To formulate implementation rules (detailed rules for the use of MHEG): Special attention to be paid to Japanese language environment, calculation functions, uniformity of reproduced images, etc.

(2) To develop a prototype MHEG viewer and a prototype MHEG authoring tool:

Viewer: For MacOS and Windows 95

Authoring tool: For Windows 95

(3) Interoperability testing:

Verification of data compatibility and links with the WWW.

Implementation rules for the use of MHEG will be defined in detail. The ISO standard and ITU recommendation are generic and actual implementation is going to require a far more specific set of rules. For example, the user is going to have to decide which character code to be used. Again, we are also going to need a separate set of content-related rules specifying matters such as whether MPEG1 or MPEG2 is to be used for video and whether JPEG or GIF is to be used for still pictures. In a Japanese language environment in particular, the enablement or disablement of vertical writing is going to have a very significant impact.

A prototype MHEG viewer and authoring tool will be developed on the basis of the implementation rules. The new authoring tool will then be used to create multimedia data for the interoperability testing.

To complete the project, we will test the interoperability of each of the above both on- and off-lines.

Test system

We are thinking of testing the new authoring tool under stand-alone conditions. We will then load the newly created MHEG data onto a CD-ROM or similar medium and carry out an off-line interoperability test. Next, we will load the newly created data into a workstation as shown in the diagram and test it for interoperability on-line while at the same time trying out the HTML links.

The links used for the on-line tests will be comparatively high-speed network links such as a 100Base-TX LAN connecting personal computers. The clients will be fitted with an MHEG viewer and an HTML viewer.

Contact information:

Mr. Kei Takikawa

NTT Software Corporation

Tel: +81-45-212-8023

Fax: +81-45-212-8015

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p76-77.htm

Promoting the wider use of EC-Problems to be resolved

The Internet is likely to lead to a major boost of the use of EC by consumers. Among its many features, the Internet is an open network offering two-way communications; it also provides distributed systems and multimedia handling capability. Promoting the more widespread use of EC on such a network inevitably raises a number of problems. At the planning stage of the Commerce Navigation System, we identified a number of areas that were going to require closer scrutiny:

- How best to readily locate target data from amongst a massive volume of diverse and distributed data

- How best to ensure the continuous visibility of highly transitory and anonymous communications.

We concluded that the following devices resolve those problems:

1) For consumers:

A device enabling the consumer to obtain access to the target data reliably, quickly, easily, and safely

2) For retailers and service providers:

A device facilitating the ready provision of information to targeted consumers.

The Commerce Navigation System was planned to deal with these problems.

Configuration assumed by the Commerce Navigation System

The average WWW system is configured from a personal computer operated by the consumer and a WWW server (virtual store) run by the retailer or service company. In addition to the above configuration, the Commerce Navigation System has been designed to utilize a gateway server managed by the company that set up the network.

The goods and services offered by various distributed WWW servers (virtual stores) are held in a database by the gateway server; therefore, the gateway server can capture all the goods and services offered by the distributed sites throughout the Internet.

Communication of personal data

The primary function of the Commerce Navigation System is the communication of personal data, as described below.

When a consumer accesses the gateway server, personal data held in his/her personal computer is automatically transmitted to the gateway server. When retrieving goods or services, the gateway server not only uses the retrieval conditions input on the screen but also uses the personal data referred to above.

For example, if the consumer asking about "shoes" is a man, the server will start by displaying men's shoes and if the consumer is also a young, salaried worker, it will probably be advantageous to start the presentation with business shoes such as the "Regal" brand.

In the process outlined above, personal data is transmitted from the consumer to the server. On the other hand, when the consumer tries to retrieve goods and services from the gateway server, it automatically downloads to the client's personal computer the type of goods and services the consumer tends to be interested in. Again, when making purchases or reservations at virtual stores, the related data (receipts) are automatically stored in the client's personal computer.

Client personal computers will thus be used not only to store the personal attributes of the user but also to hold data relating to previous purchases. This personal data (personal attributes + retrieval patterns) can then be used during the next retrieval of goods or services by the same user.

The personal data communication function described above thus enables a virtual store to suggest products that will suit the consumer's requirements as revealed through previous purchases. When shopping in a department store, for example, the sales assistant can see at a glance the "sex" and "approximate age" of his/her potential customer. The customer's dress will also provide clues as to the type of job he/she has and what his/her tastes in fashion may be. The shop assistant is thus able to bring out the kind of items that are likely to appeal to the customer. The personal data communication function outlined above thus makes it possible to generate a closer approximation in cyberspace of the sort of sales activity that takes place in a real store.

Benefits of the new system

The new system offers the following benefits:

(1) Benefits to the consumer

- By disclosing personal data, the consumer is able to gain quick access to the sort of information that precisely meets his/her requirements.

(2) Benefits to the retailer or service business running a virtual store

- They are able to supply the type of goods and services that match the user's personal data profile.

- They can shift away from a mass marketing approach towards marketing based on the maintenance of an ongoing relationship (continuous-relationship marketing).

(3) Benefits to the company that manages the gateway server

- The company is able to obtain a clear idea of the lifestyle trends that most closely match individual consumers' behavior.

Participating companies

The Commerce Navigation System has been planned by I & S Corporation, Smis Co., Ltd., and Saison Information Systems Co., Ltd., each of which is a member of the Saison Group Internet Forum. Actual operational management and activity planning will be carried out by the eight-company EC Consortium, which consists of the above three companies plus Seibu Department Store, Ltd., the Seiyu, Ltd., Credit Saison Co., Ltd., Parco Co., Ltd., and SS Communications Inc.

Schedule

System development will be completed by August 1997 and a service using the newly developed system will be launched in September. The precise nature and the details of the service are under discussion by the EC Consortium.

Contact information:

Multimedia Business Promortion Dept.

Saison Information System Co., Ltd.

URL: http://home.saison.co.jp/SIS/

Fax: +81-3-3988-2956

E-mail: [email protected]

World Wide Web

Retail or service business

WWW server

(Expansion of agent function)

Product or service

information (detailed)

Consumer

List of search results

Gateway server

Retail or service business

WWW server

Product or service

information (summary)

Product or service

information (summary)

Retail or service business

WWW server

(Expansion of agent function)

Personal attributes}personal information

Retrieval patterns

Sales and reservation information

source:http://www.ecom.or.jp/eng/ecom-today/no1/p78-79.htm

Objectives

To develop a consumer-oriented secure electronic-commerce environment (SECE) that will enable the secure and reliable payment of electronic commerce transactions between companies and consumers over an open network such as the Internet using a secure commerce protocol with the in-built flexibility to meet the requirements of Japanese commercial business practice.

Outline

Configuration of the SECE will comprise (1) a secure commerce protocol specification, (2) a common platform consisting of the communications library and the security library that will be needed for the secure commerce protocol to work, and (3) a specification for the application programming interface (API) that will be needed to run applications on the common platform. The results of all of the above will be made freely available.

The Secure Commerce Protocol consists of a settlement protocol and an authentication certificate management protocol. A payment protocol such as secure electronic transaction (SET), which is used for purchases, can also be used both as a credit card or bank deposit payment protocol and as a protocol for transactions between consumers and their banks (balance inquiries, account transfers, etc.).

Features of SECE

The payment system will support two main payment routes, namely the credit-card route and the bank-deposit route. The payment environment will be made as flexible as possible to accommodate the sorts of procedural differences that might arise between different retail outlets and transactions.

Credit card payment will be based on the SET protocol which will be modified or supplemented in some way to provide it with the added flexibility needed to cater for practices peculiar to the Japanese systems such as that of employees making payments by lump sum payment at the time of their semi-annual bonuses.

The consumer's client personal computer will need to be provided with a protocol to enable him/her to carry out the procedures necessary to apply to a certification authority for registration of a certificate providing "proof of identity." The consumer's client personal computer will also need software to enable it to handle certification received in response to the above application, certificates for retailer and credit card company payment gateways, and certificate revocation lists.

SECE provides the user with the protocols and common libraries needed to run these functions.

SECE also supports payment using helper applications or Java applets rather than a Web browser. Since, in the case of Java applet-based payment, evidence is required of the legitimacy of the applet, payment transactions can be made secure by adding an digital signature to a script made in Java. This signature can then be checked by the client to confirm the legitimacy of the applet.

The payment protocol ensures the security and reliability of payment with the help of encryption. The protocol is structured in such a way as to enable a choice of preferred encryption logic from a selection of encryption algorithms.

RSA is used for public key encryption, DES for shared key encryption and SHA as the hash function. Domestically produced encoding and the like will be capable of incorporation in the form of a "cassettable" module.

The protocol developed for bank transactions will be based on SET and designed to cater for Japanese banking as it is today. Once developed, the new protocol will be reviewed by various bodies including an ECOM working group and verified on the test site through the provision of libraries.

SECE-based transactions

Purchase-driven credit card- and bank deposit-based payment.

(1) When a consumer chooses a product and expresses a desire to buy it, a message will be sent to the WWW server to start the SECE.

(2) The client personal computer SECE application will respond by advising the retailer of the user's desire to make a purchase.

(3) The retailer will confirm its intention to do business by forwarding a list of acceptable credit cards along with alternative methods of payment.

(4) The client personal computer will choose a suitable card and forward a request to pay to the retailer. The payment request message will contain two sets of data: order-related data such as the purchase date, product code and quantity required, and payment-related data such as the chosen credit card, the card number, the period of validity, and the amount of the payment.

Data such as the credit card number will be encrypted by the payment gateway's public key so that there will be no way for the retailer to get hold of that information. On the other hand, the order data will be encrypted using the retailer's public key, thereby enabling the retailer to decrypt that part of the message on receipt.

(5) On receipt of a payment request, the retailer will issue a credit inquiry to the payment gateway and receive credit information from the credit card company in response. Payment options include immediate payment and deferred payment depending on the type of product in question and there is thus a possibility that the payment procedure may be temporarily suspended prior to completion. The procedure will therefore include a series of question and response messages designed to confirm the point in the payment process that has been reached.

(6) The retailer server will analyze the payment gateway's response to the credit inquiry and advise the result to the client personal computer. The result will be displayed on screen by the client.

In the case of a purchase-driven bank deposit-based payment, the user will first select a product and advise his/her desire to purchase it to the retailer. The retailer will issue a list of payment options including bank deposit-based payment and credit card payment from which the user will choose bank deposit payment. On receipt of the user's selected option, the retailer will initiate the transfer of a series of protocols and operations from the client personal computer which are designed to facilitate a transfer of funds from the user's bank account into the retailer's specified account.

Schedule:

Credit card payment function:

February 1997

Bank deposit payment function:

September 1997

Final version:

February 1998

Contact information:

Shigeki Furuta

Fujitsu Ltd.

E-mail: [email protected]

Mr. Akira Tachigami

Hitachi, Ltd.

E-mail: [email protected]

Mr. Shuji Nakata

NEC Corporation

E-mail: [email protected]

source: http://www.ecom.or.jp/eng/ecom-today/no1/p80-81.htm

Background

(1) Social background

The rapid advances made by semiconductor manufacturing technology since the 1980s has enabled large reductions in the price of semiconductor chips while at the same time enabling a massive improvement in the ratio of performance to price. This has enabled quantum leaps to be made in the development of innovative electronic data techniques the upshot of which has been the downsizing of computer systems, the growth of networking, and the development of open systems. This has in turn opened the way for the development of until recently undreamed of technologies making it possible to carry out electronic commerce transactions such as commercial trading and settlement in real time through the medium of multiple computer networks.

For electronic commerce to be carried out frequently and successfully between companies, between individuals and between companies and individuals, it is essential that security techniques be provided to facilitate the confirmation of identity and cross-certification over computer networks regardless of whether they are open or closed.

An IC card-a "smart card"; basically a memory with a built-in microprocessor-is distinguished among other things by its ability to authenticate the identity of the cardholder, to store data and to provide a security function. As such, therefore, it has huge potential for use as a tool for the confirmation of holder identity and for cross-certification through the medium of a computer network.

(2) Technical background

IC cards incorporating processor chips come in two main types: the "contact" type, in which data is exchanged between a card and a read-write unit through the medium of external contacts, and the "contactless" type, in which data is exchanged between a read-write unit and a card by means of electromagnetic induction or electromagnetic waves, for example. Contactless IC cards can be further subdivided into the "close-coupling contactless" type, in which the distance between a card and a read-write unit must be no more than a few millimeters for data exchange to take place, and the "remote-coupling communication" type, in which data exchange can take place over distances of more than a few millimeters.

Following the establishment of the ISO/IEC 7816 series for contact IC cards by ISO/IEC (International Standards Organization / International Electrotechnical Commission) JTC1/SC17/WG4, JIS (Japanese Industrial Standard) X6303, 6304, and 6306 were formulated and put into effect from October 1, 1995.

In the case of close-coupling contactless IC cards and remote-coupling communication cards, standardization work is progressing through the medium of ISO/IEC JTC1/SC17/WG8. The situation in this respect (as of April 1996) is shown in tables 1 and 2 below. The issue of ISO/IEC 10536-4 in respect of close-coupling cards is currently awaited and work on the formulation of a Japanese Industrial Standard which conforms closely to the ISO/IEC 10536 series is currently (fiscal 1996) under way in Japan.

Objective

The primary object of the project for the "development of contactless IC cards and a read-write unit for it" is to develop technologies for use with close-coupling IC cards and corresponding read-write units designed for it-the ISO/IEC have almost completed their formulation of international standards for application in this particular area.

Outline of the project

(1) General outline

The present project relates to the formulation of an agreement for the implementation of close-coupling IC cards and suitable read-write units. The agreement formulated during the course of the present project will conform strictly to the international standards set out in ISO/IEC 10536-1,2,3,4 and to the related international standard ISO/IEC 7816-4.

A further object of the project will be to design and test close-coupling IC cards and a read-write unit in accordance with the provisions of the implementation agreement. The object of the tests will be to establish and evaluate the compatibility of different close-coupling IC cards and the interoperability of the cards and the read-write unit.

The present project will be undertaken jointly by New Media Development Association and Research and Development Council for IC Card Commerce Systems, Japan, as shown in Figure 1 above.

(2) Outline of the main technical development objectives

The following section lists the main technologies that will need to be considered for the purpose of developing a close-coupling IC card along with a read-write unit for said card.

Close-coupling IC cards

A close-coupling IC card incorporates the following functions, each of which will be the subject of a separate implementation agreement followed by verification tests and evaluation. Figure 2 illustrates the mutual relationships that exist between the various functions.

Functions: Contactless power transmission function, contactless signal transmission function, clock generation function, reset signal generation function, digital signal processing function, data transmission processing function, command processing function, file generation and management function, security function

Read-write unit

Given the design of the close-coupling IC card described above, a suitable read-write unit will comprise the following functions, each of which will be the subject of a separate implementation agreement followed by verification tests and evaluation. Figure 3 illustrates the mutual relationships that exist between the various functions.

Functions: Contactless power transmission function, contactless signal transmission function, digital signal processing function, data transmission processing function, personal authentication function, cross-certification function, encryption-decryption function, command processing function

Contact information:

(1) Technical development of contactless IC cards

Mr. Kogo Mutsuda

New Media Development Association

E-mail: [email protected]

Tel: +81-3-3457-0671

Fax: +81-3-3457-9604

(2) Technical development of a read-write unit for contactless IC cards

Mr. Yasuyoshi Uemura

Research and Development Council for IC Card Commerce Systems, Japan

E-mail: [email protected]

Tel: +81-3-3574-1953

Fax: +81-3-3574-1954

Table 1. Current Situation with Respect to International Standards for Close-Coupling IC Cards

IC card type Relevant standard (ISO/IEC) WD CD DIS IS

Close-coupling IC cards 10536-1: Physical characteristics Issued

10536-2: Dimensions and locations of coupling area Completed Nov. 94 Awaiting issue

issue

10536-3: Electronic signals and reset proceduresCompleted Jan. 96 Awaiting issue

10536-4: Answer to reset and transmission protocols June 95 Jan. 96

Table 2. Current Situation with Respect to International Standards for Remote-Coupling Communication Cards

IC card type Relevant standard (ISO/IEC) WD CD DIS IS

Remote-coupling communication cards 14443-1: Physical characteristics

communication

14443-2: Radio frequency interface

14443-3: Transmission protocol

14443-4: Security function

source: http://www.ecom.or.jp/eng/ecom-today/no1/p82-84.htm

1. Introduction

ECOM carries out periodic surveys on EC which it uses as a guide to what the people in the street think about EC. ECOM is also planning to use the results to ascertain the extent to which changes in the nature of EC have been understood and to identify areas that will need to be dealt with if we are to encourage more widespread use of EC.

The results of our latest survey carried out between September 4 (Wed.) and 6 (Fri.), 1996 are shown below.

2. Survey method and response

Direct Marketing Fair'96 (DM'96)

-World expo of growing mail-order business-

September 4 (Wed.) to 6 (Fri.), 1996

Venue: Ikebukuro Sunshine City Cultural Center 2F-3F

Under the auspices of: The Direct Marketing Fair Committee

The survey was carried out with the help of visitors to the ECOM booth and attendants at the EC seminar.

Respondents: 299

Breakdown: Booth respondents = 261 (written responses: 234, computer responses: 27)

Seminar respondents = 38 (written responses: 38)

3. Main features

(1)"Experience of mail-order and electronic commerce transactions" showed 79 percent of respondents (236 out of 299) to have experience of mail-order transactions as against just 14 percent in the case of electronic commerce. Although electronic commerce has only very recently arrived on the scene, the number of persons with experience of this form of commerce would nevertheless appear to be growing steadily. (Figure 1)

(2)To judge from the number of persons (56 percent in all) who, in response to the question "Are you familiar with electronic commerce?," confirmed that they were either "very familiar (10 percent)" or "familiar (46 percent)" with it, it would appear that the general level of familiarity with electronic commerce is increasing. (Figure 2)

(3)When asked "How much do you think you might spend on a single electronic commerce transaction in future?," the largest single group of respondents (33 percent) went for "10,000." Also quite a large number of respondents went for the "100,000" option. This tends to suggest that a fairly wide range of transaction values would be generally acceptable. The proportion of respondents* that answered that they "would not buy anything" was just 3 percent, which is indicative of a generally extremely high level of interest in the use of electronic commerce.(Figure �R)

(4)Asked "What do you like about electronic commerce?," large numbers replied that it "enabled them to shop from home," it "enabled them to shop 24 hours a day," or that it "enabled them to shop effortlessly from geographically remote places such as foreign countries." It may be hoped, therefore, that the growth of electronic commerce will accelerate the development of a borderless commercial world while at the same time establishing a framework for the rapid completion of individual cross-border transactions.

High hopes were also expressed that "payment would be made easier," for example, or that "the implicit labor saving would help reduce prices", thereby bringing about an overall improvement in the whole social system. (Figure 4)

(5)Responses on the subject of the "disadvantages of electronic commerce" pointing to the possibility that "personal data may become known to third parties" were clearly indicative of a high level of concern over the security and reliability aspects of this type of system. (Figure 5)

ECOM has set up the following working groups to look into the problem of security from various different angles: Working Group on Common Security Technologies, Working Group on Personal Authentication, Working Group on IC Cards, Working Group on Certification Authority.

(6)When asked what sorts of products they would like to purchase through the medium of electronic commerce, large numbers of respondents pointed to items such as "tickets, books, and magazines." Many respondents also indicated an interest in public services with replies such as "evidence of registered seal or copies of residence cards." (Figure 6)

One of the series of testbed projects that ECOM has in mind is that of an integrated one-stop "electronic public service system."

For a more detailed analysis of the above results, visit the ECOM Web server at:

http://www.ecom.or.jp/misc/enquete/index.htm

source: http://www.ecom.or.jp/eng/ecom-today/no1/p85.htm

Figure 1. Experience of Making Purchases by Mail Order or Electronic Commerce

Q: Have you ever bought anything on mail order?

Response unclear 1%

No 20%

Yes 79%

Q: Have you ever bought anything through the medium of electronic commerce?

Yes 14%

No 86%

Figure 2. Awareness of Electronic Commerce

Q: Do you know about electronic commerce?

No 4%

Response unclear 5%

Yes, Im well aware of it.10%

Ive heard of it. 35%

Yes 46%

5%

For reference:

Q: Have you ever heard of the Electronic Commerce Promotion Council of Japan (ECOM)?

Response unclear 19%

Yes 26%

No 55%

Q: How much do you think you might spend on a single electronic commerce transaction in future?

Would not buy anything

Up to \3,000

Up to \6,000

Up to \10,000

Up to \30,000

Up to \50,000

Up to \100,000

Up to \300,000

Up to \500,000

Up to \1 million

More than \1 million

Dont know

Summarized in the pie chart

Not interested 3%

Interested 97%

Explanation of terms:

Not interested: Would not buy anything

Interested: Would buy something

Figure 4. Perceived Benefits of Electronic Commerce

Q: Do you think electronic commerce has any benefits to offer?

It enables me to shop from home.

It enables me to shop 24 hours a day.

It enables me to shop effortlessly from geographically remote places such as foreign countries.

It increases the choice of goods on offer

(I can now buy now that I didnt even know existed before).

Payment is easier (no need for paper money, bank transfers, etc.).

Implicit labor saving will help reduce prices.

Products are delivered to your door at high speed.

Q: Are there any aspects of electronic commerce about which you feel anxious or dissatisfied?

There is a risk that personal data may become known to third parties.

The differences between the advertised and the actual goods are too great (you cannot physically hold the product before purchasing it).

There is a risk the wrong price might be charged.

There is no scope for the negotiation of discounts.

Its hard to find what I want.

I have little or no interest in the products currently on offer.

Current electronic shopping malls are uninteresting.

Purchase procedures (use of computer, etc.) are too much trouble.

As automation increases so will unemployment.

Figure 6. Types of Products in Which Users and Potential Users of Electronic Commerce are Interested

Q: What sort of goods do you purchase (or will you purchase in future)?

Tickets (theater, etc.)

Books and magazines

Information (news, company reports, personal information, product information)

Tickets (transport, etc.)

Goods from overseas

Evidence of registered seal (or extract of family register, copy of family register, tax advice, etc.)

Copy of residence card

Software (games, etc.)

Presents (year-end gifts, etc.)

Accessories (bags, wallets, etc.)

Clothes

Stationery

Electrical goods

Cosmetics