1. Introduction:

The global nature of the Internet provides developing countries with a unique opportunity to compete in marketplaces that were beyond their reach. This results in the reduction of physical trade obstacles and increased market access that provides a competitive stimulus for local producers and entrepreneurs in developing countries. It also makes it possible for them to practice trade with the rest of the world in a fair, equitable, rapid and secure manner.

Consumer Electronic Commerce can simply be defined as the integration of communications, data management, security and banking services that enable merchants to rapidly, flexibly and securely sell goods and services and accept and process payments and orders from consumers. This model of Electronic Commerce is referred to as the Consumer to Business (C-to-B) model. The fusion of Electronic Commerce and Internet Technologies is referred to as Internet Commerce (IC) and was the focus of this mission. With an estimated 900 million credit cards accepted in more than 247 countries and territories, credit cards represent a universal, currency-transparent and preferred form of payment today by Internet Commerce merchants.

2. Objectives:

At the initiative of the government of the Kingdom of Morocco, under the sponsorship of the Telecommunication Development Bureau (BDT) and within the framework of the ITU Electronic Commerce for Developing Countries (EC-DC) project, a one-week mission was carried out with the following objectives:

Explain the requirements and perform an on-site evaluation.

Advise on steps to be taken and recommend future actions.

3. Contacts:

H.E. Larbi AJJOUL, Secrétaire d’Etat auprès du Premier Ministre Chargé de la Poste et des Technologies de l’Information (SEPTI)

Mr. Ahmed TOUMI, Directeur des études et planification SEPTI

Mr. Fouad BRINI, President APEBI, Directeur Général INTERDATA

Mr. Mohamed NAILI, Administrateur Directeur Général WAFA MONETIQUE

Mr. Samir LAMRISSI, Directeur Général S2M

Mr. Mohamed HORANI, President Directeur Général Société HighTech Payment Systems

Mr. DIDI ALAOUI My El Hassan, Responsable de la Division Monétique Crédit du Maroc

4. Methodology:

Several meetings were held in Rabat and Casablanca with representatives from the public and private sectors and a team of experts from the Secrétariat d’Etat auprès du Premier Ministre Chargé de la Poste et des Technologies de l’Information. The first action was to clearly explain what was required for implementing Internet Commerce. This was proceeded by identifying the contacts from the key sectors before engaging in discussions. Section 5 provides more information on steps taken to meet the above-mentioned objectives. The first paragraph of each sub-section of section 5 briefly explains the requirements while the second paragraph reports if the requirement was met. The focus of this mission was on the Business part of the C-to-B model and it targets consumers from outside Morocco.

5. Requirements and On-site Evaluation:

In the office of the National Co-ordinator for the project (Mr. Ahmed TOUMI), an overview of consumer electronic commerce was given to the team members from SEPTI.

This was a pre-requisite to explaining the requirements and performing an on-site evaluation to determine if these requirements were met and to propose how they could be achieved. Most of the discussions and fact-findings were on the following subjects:

5.1 Internet Access:

The ubiquitous connectivity provided by the Internet and its exponential growth provide a low-cost mechanism for merchants to reach a potentially global consumer base. Internet connectivity enables merchants to set-up virtual stores with 7x24 hour availability. The need for having reliable Internet connection was not overemphasised because both the public and private sectors are aware of its potential.

There is full Internet connectivity provided by several Internet Service Providers (ISPs) operating in the main cities. Many private and public sector organisations (government ministries, hotels, banks, the national airline and the tourism industry) already use the Internet for disseminating information (marketing and advertising). One of the main banks provides Internet banking to its local clients. The goal of having Internet connectivity (for those who currently do not have it) can be met either via dialup connections or dedicated leased lines.

5.2 Banking Sector:

Secure, automated and real-time online payment is one of the main requirements for Internet Commerce. These services can today be provided by the credit card acquiring institutions through Mail Order Telephone Order (MOTO) contracts with local merchants. Acquiring Institutions are banks that are affiliated with Credit Card Organisations (CCOs) and use the world-wide financial networks of the CCOs to accept and process payments. These acquiring banks need the necessary software, security and network infrastructure for securely accepting payment orders from merchants and processing them (by crediting the merchant’s bank account and debiting the client’s account).

The Moroccan banking sector is quite advanced in the provision of credit and debit card services. Banks such as Crédit du Maroc and WAFA Bank are acquiring institutions that provide contracts to merchant for processing credit card payments. X.25 and dial-up connections are used to accept merchant payments from Point Of Sale (POS) terminals and computers located at merchant premises. VISA, American Express, Eurocard/Mastercard and Diners cards are accepted by acquiring banks. WAFA bank provides MOTO contracts to local merchants but this is not yet the case with Crédit du Maroc. The banking sector is willing to play its role to make Internet Commerce a reality in Morocco.

5.3 Information Technology:

Development of virtual stores require creation of HTML pages, Java /JavaScript applications and thorough knowledge of Internet security, application and network protocols for the development of Internet Commerce FrontOffice applications. Secure BackOffice applications for processing consumer and financial data are also required. The environment must exist for software and hardware acquisition, maintenance, support, customisation and training.

The Association des Professionnels de l’Informatique de la Bureatique et de la Télématique (APEBI) includes membership from leading software and hardware vendors (IBM, Microsoft, Oracle etc), Telecom Operators and Internet Service Providers. Its membership represents various sectors of the Information Technology thereby providing the natural heterogeneity seen on the Internet today. There is local expertise in the development of payment software that is vital for the deployment, ongoing maintenance and evolution of payment systems. The Ministry of National Education has many ambitious projects for making Information Technology a central element at all levels of education. In the area of Information Technology, this requirement is more than adequately met.

5.4 Shipping and Delivery Services:

For hard goods, there is a need for reliable shipping and delivery services to track orders in real-time, provide reliable delivery schedules and feedback both to the merchants and consumers. The global nature of the Internet also means that the consumer could be on any part of the globe. The shipping and delivery services should provide a rapid and global service.

The presence of DHL, TNT and other express services means hard goods can be rapidly shipped world-wide. Merchants and consumers can track shipped orders from the comfort of their homes or offices.

The integration of Information Technology services and the shipping and delivery services will facilitate the creation of reliable back office processing systems.

5.5 Goods and Services:

Internet Commerce enhances existing sales and delivery channels (and can also create new markets). However, there must be a market demand for the goods and services that are to be sold. Goods and services within a certain price range that can be legally exported (and imported at the destination) and have an international consumer base meet this requirement. Examples of such items were provided to the project team from SEPTI.

Today, tourism plays an important role in the Moroccan economy and attracts consumers from many parts of the world. One can imagine the sale of vacations (flight, hotel bookings, and car rental) via the Internet with fully automated and secure processing and payment. Some software companies are already exporting goods and services to developed countries. The artisan sector is famous for its carpets and other products. All these represent goods and services that can be sold on the Internet.

5.6 Legal Framework:

Internet Commerce requires a legal framework to define the responsibilities of both the merchants and the banks. Data protection and privacy (of consumer data), merchant liabilities, fraud and online contracts have to be considered. Discussions were held with an expert from the Moroccan Legal Sector.

Existing laws cover most of the issues involved in establishing the proper legal framework. In cases where there are no direct references to existing laws, directives from the European Union (EU) were used as the basis for establishing this framework. Proximity with Europe and future plans for establishing closer trade agreements with the EU, indicates that EU directives would most likely apply where existing laws do not address the concerns. The existing legal framework and directives are sufficient for establishing the necessary environment for Internet Commerce.

Recommended Actions:

Pilot Project: Develop a pilot project to demonstrate the feasibility of Internet Commerce in Morocco.

The following additional actions would facilitate the wide-scale deployment of Internet Commerce in Morocco. None of them is mandatory but collectively, they will leverage this emerging technology and act as an enabling factor for its deployment:

Internet Commerce Working Group (ICWG): Creation of a working group made up of representatives from the following sectors: Banking, Information Technology, Merchants and Internet Service Providers. For efficiency, the size of this group should be limited to no more than 12 members and co-ordinated by the National Project Co-ordinator. Its purpose will be to discuss problems that are directly related to the implementation of Internet Commerce, propose solutions and make recommendations to the government. The ITU would provide technical expertise to the ICWG and to the government.

Standardise national banking protocols: It is desirable for the acquiring banks to agree on a common protocol for accepting and processing payments from merchants. This will ensure inter-operability between banking applications, reduce development and deployment cost for both software/hardware and eliminate duplication of effort. Discussions need to begin to adopt a standard protocol for the merchant-acquirer link that will be used by all acquiring banks and merchants.

Telecommunication Costs: The use of the Internet as a medium for doing business requires a flexible fee structure to attract even the smallest businesses. To further enhance the growth of the Internet and encourage merchants to use it for doing business, there is a need to provide attractive prices for telecommunication services. This includes the cost for dialup connections and dedicated lines.

7. Conclusion:

The one-week mission was quite positive. Morocco fulfils (or is capable of fulfilling) all the requirements for implementing Internet Commerce using the EC-DC model. Both private and public sectors have shown a lot of enthusiasm in participating in this project and the government is willing to play its role to ensure its success. The ITU can help it achieve this goal by providing technical expertise.