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It is true that e-commerce businesses have revolutionized the way businesses have been transacted in the past, especially with the introduction of “Automated Clearing House – ACH payment solutions” which has greatly reduced the processing time it took to pay a third party.

But that is not to say that it doesn’t present itself with new challenges. As do everything in life, there are always advantages and disadvantages to everything.

Nothing is perfect – and the same holds true for e-commerce businesses.

Before delving into the limitations of e-commerce business lets first explore what e-commerce is before we expound on its disadvantages.

Simply put in layman’s terms, “electronic commerce” enables people to conduct business and communicate through the internet, in which the traditional forms of transacting business is being simulated.

For instance, when sending letters in the past, it took several days and even weeks to receive a response to a letter that you have sent earlier. But with the introduction of email, it now became instantly easy to have immediate communications with business partners or entities.

E-commerce embraces all aspects of commerce, which includes things like but are not limited to (online purchases, customer services, product reviews, lead-in page, brochures, etc.) and also creates new features in the context of this type of commerce.

Terminologies that have been caused to emerge as a result of electronic commerce includes, e-payment, e-banking, e-government, e-lottery all of which involves actions like signing contracts, transferring funds, and the distribution and sales of digital goods.

Classification of E-commerce business

According to the goods or services that are commercialized, e-commerce can be classified as follows.

Direct Electronic Commerce

This has to deal with a system in which the order, payment, and the shipping of intangible goods or services takes place online.

The transactions or processes linked with banking services and the sale of tickets (lottery, horse racing, games, etc.) are some examples of this category.

Indirect Electronic Commerce

This category involves the acquisition of tangible goods (e.g., books, phones, cutleries, etc.) that must be shipped physically, using mediums or traditional routes of distribution.

Limitations of E-commerce Business

Specialized Equipment

Even though the electronic commerce business has made our lives a tad easier, it comes with a drawback. In the past, you only needed a withdrawal instrument like a withdrawal booklet or cheque book.

But with the introduction of electronic commerce, it became necessary that you must have special devices or equipment before you can propagate any form of transaction. Example of such equipment are; token, credit card, point of sale devices, etc.


Because everything is done through a network (internet), it presents itself with the possibility of being hacked by computer hackers and scammers alike.

No matter the security measure, there will still be someone out there that will be able to beat the system one way or another.

Processing Cost

Earlier, we talked about how special equipment is needed in order to make transactions – well, these devices come at a cost, and so does the maintenance of such tools and equipment.

So, that speed and reliability we enjoy within the e-commerce environment do come at a fairly steep price. Which begs the question – which will you rather have?

Increased Illegal Activities

Part of the benefits of e-commerce is the ability for clients buying or making transactions to stay anonymous thereby making it difficult to trace entities involved within a transaction, which invariably gives rise to money laundering.

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