How E-Commerce Started

Over the last 30 years, the definition of Electronic Commerce has changed. Initially, in the late 1970's, Electronic Data Interchange (EDI) and Electronic Funds Transfer (EFT) were used as the basic technology to facilitate electronic commercial transactions. This was what electronic commerce originally meant, the use of technological innovations like EDIs and EFTs in doing commercial businesses electronically. EDIs and EFTs allowed businesses to electronic sending of commercial documents such as purchase orders or invoices.

In 1979, an engaged inventor named Michael Aldrich invented online shopping. He did this by connecting a customized 26-inch color local television to a computer with real time transaction processing system through a domestic telephone line.

During the 1980's, forms of electronic commerce such as credit cards, Automated Teller machines (ATM) and telephone banking grew and were accepted. The Airline Reservation System typified by Savre in the USA and Tragicom in the United Kingdom was also considered another form of e-commerce. Curiously, online shopping has been present even before IBM, Microsoft, Apple Inc. and the Internet. In the mid-1980's, CompuServe, one of the first popular networking services for home PC users, which provide tools like e-mail, message boards and chat rooms, added a service called Electronic Mall. In the Electronic Mall, users could purchase items directly form 110 online dealers. While this service did not succeed, we know it today as one of the first examples of e-commerce.

In the year 1990, at the European Organization for Nuclear Research (CERN), Tim Berners-Lee, a researcher, proposed hypertext-based web information that a user can explore using simple interface called a browser. The researcher called it the World Wide Web. Furthermore, in the year 1991, Web-based e-commerce emerged and became more alive due to the lifting of the ban on commercial business operating over the Internet by the National Science Foundation. In 1993, Marc Andreesen introduced the first widely distributed web browser called Mosaic at the National Center for Supercomputing Applications (NCSA). In 1994, Netscape 1.0's release included Secure Socket Layer (SSL), an important security protocol that encrypts messages in an online transaction, which includes both the sending and receiving side. One of the functions of SSL is to ensure encryption of personal information such as names, addresses and credit card numbers as they pass over the Internet.

The first third-party services for processing online credit card sales began to appear in the years 1994 and 1995. Two of the most popular among these third-party services were First Virtual and CyberCash. Also in 1995, a company called Verisign began developing digital IDs, or certificates, that verified the identity of online businesses. Before long, Verisign shifted its focus from verifying the identity of online businesses to certifying that the e-commerce servers of a particular web site were properly encrypted and secure.

From the years 1995 up to the present, companies such as eBay and led the way for today's e-commerce bloom. These companies give consumers the chance to purchase almost anything online. Clients can just type whatever they need in the search engine and a list of related stuff comes up.