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374                                                 11  Electronic Commerce Payment Systems and Order Fulfillment

               are delivered to the customer. These can include: check-  Regardless of the type of EC or source of the prob-
               ing inventory for availability; determining completeness   lems, many companies rely on supply chain planning
               and accuracy of order; locating a warehouse with the   and execution software systems to help address the
               inventory; picking the items at the warehouse; arranging   problems—both structure and processes. Included
               for shipment; loading and transporting items ordered;   among the key systems are supply chain planning sys-
               and receiving acknowledgement of receipt; as well as,   tem of record (SCP SOR), warehouse  management
               handling returns (reverse logistics). These activities are   (WMS), and transportation management (TMS). Given
               part of a larger supply chain that also deals with demand   the complexity of most supply chain problems (order
               planning, procurement, manufacturing, and replenish-  fulfillment included), it can be a multi-year undertaking
               ment to name a few of the other major activities. Ensuring   even with the aid of these systems.
               that order fulfillment is well executed so that the right
               products are delivered to the right person and place in a
               timely and profitable manner is a complex task whose   KEY TERMS
               difficulty varies by the types of product, whether third
               parties are involved, and on the company’s strategies and  Address Verification System (AVS)
               operations models (i.e., whether the company primarily  Authorization
               engineers-to-order, makes-to-order, assembles-to-order,  Bitcoin address
               or makes-to-stock).                            Bitcoin private key
             10.  Problems in order fulfillment. Survey results indicate  Blockchain
               customer satisfaction has declined as a direct result of  Card verification number (CVN)
               problematic order fulfillment. It is a challenge to com-  Contact card
               panies because customers expect very short delivery  Contactless (proximity) card
               times, as well as very accurate orders. They also want a  Convertible virtual currency
               seamless experience across all of a company’s sales  Cross-border e-commerce
               channels both online and off-line. In B2C retail most of  Digital currency
               these problems arise because of uncertainties in  Discount rate
               demand, lack of information sharing across all the com-  Electronic money
               panies supply chain, inadequate  logistical infrastruc-  Fiat currency
               ture, and inefficient financial flows (invoicing, payment,  Interchange rate
               collection, etc.).                             Merge-in-transit
             11.  Solutions to order fulfillment problems. There are a  Micropayments (e-micropayments)
               large number of solutions that are aimed at addressing  Mobile payment
               the problems in order fulfillment. These involve major  Mobile (digital) wallet
               changes to the order-taking  process, improvements to  Non-convertible virtual currency
               the warehousing and inventory systems, as well as major  Order fulfillment
               changes to the structure and process of the broader sup-  Payment cards
               ply chain. It also involves solutions targeted to specific  Settlement
               problems. A case in point is the changes designed to  Smart card
               enable much faster fulfillment including novel  Smart card reader
               approaches like  Amazon Prime  Air which envisions  Stored-value card
               small package delivery by drones, or faster warehouse  Third-party logistics suppliers (3PL)
               picking, packing, and delivery enabled by using robots  Virtual currency
               to assist in the process, or using mass customization in  Warehouse management system (WMS)
               make-to-order fulfillment, or even faster and more
                 efficient handling of EC returns (e.g., return to store or
               special collection stations).                    DISCUSSION QUESTIONS
                 While some of these solutions apply equally well to
               B2B EC, B2B tends to be more inefficient because it is    1.  Five years from now do you think credit and debit cards
               more complex—larger shipments, multiple distribution   will still be the primary payment method for online pur-
               channels, varied shipment frequency, more complicated   chases? What about cash for off-line purchases? In both
               transaction paths, to name a few. Often solutions to these   instances explain why or why not.
               complexities require major changes to business pro-    2.  What type of payment service does Boku (boku.com)
               cesses, as well as the incorporation of software systems   provide? How does it work? What are some of the coun-
               that can automate the processes.                  tries where it works? Who are some of the companies
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