Waiting For Cyber Laws To Boost E-commerce?

Laws that control and regulate the economy don’t give any boost to the economy — they are not meant to. If you are waiting for cyber laws to boost e-commerce in India, you are on the wrong track. Laws are meant to facilitate legal processes, not to boost trade or commerce. It’s like expecting the “Bombay Shops and Establishments Act” to give a boost to trade and commerce in Bombay!

Whether e-commerce gets a boost or not depends on all of us – the traders, the businessmen and the corporates. It will also depend on mutual trust. If customers and suppliers don’t trust each other, adopting e-commerce will become very difficult. Cyber laws can just facilitate electronic processes. If the functioning of the currently available legal framework is any measure, you can very well imagine the difficulties in handling the cyber laws. The electronic technologies are evolving so fast; it’s impossible for the bureaucracy to keep pace with the technologies.

To put everything in a very simple layman’s perspective – the most important aspect of cyber laws for e-commerce is to give legal recognition to electronic “writing” with digital “signatures” and electronic “payment” through payment gateways. What we have been doing all these years with paper-based “writing” with handwritten “signatures” and paper-based “payment” can now be done through electronic means also.

If you look at e-commerce in this perspective, there is nothing so glamorous about it. You have been doing business for so many years using paper-based processes; you can do it equally well using electronic processes. In fact, you can do it much better using the electronic processes, because they are much faster, more efficient and can handle volumes of transactions unimaginable with paper-based processes.

In the initial phase of e-commerce, it’s quite likely that there will be substantial amount of duplication. Unless all the parties bound by a contract are using electronic processes, there will be need for paper-based records. This will certainly be an extra burden on the early birds of e-commerce, but it’s worth all the extra trouble.

Let us take a quick look at the three important points mentioned above.


It is very easy to create the electronic writing. Just type in your document and save! It is equally easy to deliver that document. You can deliver it on a floppy disk or via e-mail. The more difficult part starts after that. Preserving the electronically “written” document is more difficult than preserving a paper-based document. You need to protect the paper-based document from fire, water and white ants and you can always verify that it is safe in your steel cupboard.

An electronically written document needs to be stored on a media and that media needs to be protected. You cannot visually verify that the document is safe and sound, unless you retrieve it through a computer. With brand new floppies giving read error and with software versions changing every six months, you can imagine the difficulties in retrieving an electronic document created today on a computer system in the year 2100. Whereas you can easily read a 100 year old historic paper-based document even today! To preserve an electronic document, you will need highly reliable media, an efficient back up system and upgradation of the document to maintain compatibility with the retrieval systems.


A handwritten signature has to be replaced by a digital signature. The digital signature is created using cryptography. It employs an algorithm using two different but mathematically related digital keys. A private key, known only to the signer, is used for creating the digital signature by transforming data into an unintelligible form. A public key is distributed to those who need to verify that digital signature.

The verification of digital signatures can be fully automated, avoiding any human interaction or intervention in the process. Another advantage of the digital signature is that it is unique for every digitally signed document, so any tampering with the document will render it invalid even if the original digital signature is left intact.

With the digital signature, there is good news and bad news. The good news is that it is very difficult to forge the digital signature. The bad news is that it is very easy to lose the private key – by divulging it to someone else or by losing the media on which it may be stored. One has to be very careful about the private key. With digital signatures, no one can force you to sign on a “blank paper” like the villains in movies, but they can force you to hand over the private key instead!


Payment is the most important part of the e-commerce system, and the most popular means of electronic payment is through a credit/debit card. For this you need a payment gateway. Payment gateways provide customers with a secure, instantaneous and authenticated platform to carry out e-commerce transactions. They carry out four main tasks –

  1. Provide a secure mode of data transmission, so that no one can intercept data on its way.

  2. Check validity of the card being submitted.

  3. Verify the identity of the owner of the card and his address. Address verification is very important to avoid misuse of the card.

  4. Completion of a successful transaction.

Usage of digital signatures and availability of payment gateways will soon become a reality. If we are serious about e-commerce, we must start early and be ready to make the most of it when the real opportunities arrive. Late starters will always be left behind. Cyber laws or no cyber laws, you can always make a start at least with a hybrid system of e-commerce allowing for some duplication in the initial phase to keep connected to the paper-based commerce. It will be there with us for quite some time.

Ashok Dongre is an advertising and marketing professional, specializing in web site design. You can contact him via e-mail at dongre@usa.net

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