E-Crime and Non-Compliance with Government Regulations on E-Commerce: Barriers to E-Commerce Optimization in South African SMEs

E-Crime and Non-Compliance with Government Regulations on E-Commerce: Barriers to E-Commerce Optimization in South African SMEs

M.E. Kyobe (University of Cape Town, South Africa)
DOI: 10.4018/978-1-60566-998-4.ch003

Abstract

E-commerce is critical to national development. Small and Medium sized organizations (SMEs) are encouraged to adopt it to address poverty, improve competitiveness and productivity. However, the escalation in electronic crime (e-crime) and lack of compliance with e-commerce regulations threaten e-commerce success in South Africa. While many strategies for improving e-commerce have been suggested, the focus has mainly been on economic and technological factors and less on human and social aspects such as compliance behaviors. This has resulted in the development of e-commerce systems that do not incorporate regulatory requirements. Consequently, the level of exposure to cyber-risks and legal liabilities has increased and SME market competitiveness compromised (Kyobe, 2009). This chapter examines the factors influencing compliance with e-commerce regulations and e-security requirements and how these impact on e-commerce optimization in South African SMEs. It also provides some useful frameworks and checklists SME managers can use to evaluate their compliance behaviors and security practices in order to make improvement to their e-commerce activities.
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Background: E-Commerce In South Africa

Internet based connections began in late 80’s in South Africa (Zantsi & Eloff, 2003). The country is still lagging the world in internet usage with 9.02 percent of the population having internet access (Jourbert & Van Belle, 2004). On-line retail in South Africa however grew by 20 percent in 2005, down from 25 percent in 2004 (Ibls, 2007). Total spending on online goods however increased to R5.14m in 2005 and was expected to increase by 20 percent in the following years (Ibls, 2007).

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