1. The present situation of the electronic commerce in Romania – data and statistics.
2. Adopted and planned legislation and regulation, necessary for the development of e-commerce.
3. Obstacles to the development of e-commerce in Romania.
1. Present situation of the electronic commerce in Romania – data and statistics
Statistics on the number of computers, Internet users or e-commerce users existing in Romania are rather scarce. Various estimations show that the number of computers connected to the Internet is between 700 000 – 1 000 000, and that of the Internet users is between 9% (according to Pricewaterhouse – see the graph below) and 13% (according to a study performed during January-July 2002 by GfK
Romania). Other sources indicate a smaller number of Internet
users. However, the annual increase rate of the Internet users is rather high, reaching even 39% during the last period.
The same GfK study mentioned above states that most of the Romanian users access Internet from public places and very few from the education institutions. Also, public places– such as Internet cafes – are the solution chosen by 50% of those accessing the Internet, and only 20% enter the information highway from home.
Under the conditions mentioned above it is normal that only 4% of the Internet users use it for shopping in the last year. 
The initiatives of the Ministry of Communications and Information Technology, but also of other ministries, to implement various e-government solutions have stimulated the access to Internet by the
citizens and by companies. Such a project is the e-procurement system available at www.e-licitatie.ro where over 7 000 private companies are bidding for selling their products to the 900 public institutions. The e-procurement system has been a great success for the IT&C Ministry in Romania, but also abroad. It is estimated that 35 millions euro were saved through obligatory public electronic acquisition procedure in just one year. The system has proofed to be an effective solution to combat corruption.
Unfortunately, there are no data regarding the use, especially by SMEs, of computers or Internet or regarding their presence in the online environment, at least through their own web pages.
The electronic payment methods are only at the beginning. The use of debit/credit cards is not very extended for buyers. About 80% of the 4,1 million card
owners in Romania use the cards only to cash money from ATM. There are 6,900 locations accepting cards for payment, out of which only 4,000 have PoS terminals
Starting 2002 more banks began implementing and promoting Internet Banking services, including account interrogation methods by means of mobile phones (a sort of m-banking). 
The remote supply systems are usually developed by the Romanian Post, which has several services in this sense. (The rapid post service – Prioripost, cash on delivery etc.) International fast delivery companies, such as DHL or UPS, are present in Romania, but are usually not used by the online shops due to the prices that are considered rather high. Certain shops have developed their own distribution system for Bucharest or other major cities.
The number of online shops is not high (only about 50 shops have over 2000 visitors/month), and the number of accesses to them is not
encouraging. None of them allows the payment of the products online in Romania.
Usually the payment is done by cash on delivery at the receipt of the respective goods or by post office order, which means a rather high risk for the shops (fake orders) and that money gets blocked in the system. This means that there is practically only a primitive e-commerce activity. Although there are enough Romanian companies having created on-line payment systems for the shops abroad and they know the necessary steps to implement such a method, the application in Romania has not yet succeeded. According to these companies, the main reason is most likely that the banking system has not yet been „connected” to e-commerce.
However in 2002 the number of online stores increased dramatically. A recent article from Biz review – no 62 /March 2003 showed a full expansion image of the electronic commerce in Romania. They reviewed the major Romanian online magazines and the total online sales figure for 2002 was estimated between 1-5 millions
USD. An extensive presentation of the online shops statements, according with Biz review, is presented in the Annex.
The sites dedicated to the B2B systems are still in an incipient phase, but there is no relevant statistics available. Examples are www.rtcoffice.ro , a well-known office supplies and stationary supplier and www.premierbc.com - B2B type virtual market created in several international languages. It is now decided that the Romanian e-procurement system e-licitatie.ro will be extended this year in order to be available for any private company that wants to purchase its goods or services through this website. The system will be designed to conclude up to 100 000 transactions per day. With such an application, the government initiative could have a considerable impact on the expansion of the B2B e-commerce.
Although the number of Internet users is rather low, the banks, as well as the on-line traders have promoted a series of services proving some interest, although incipient, in this domain. Thus, during the last year the following services occurred:
Payment from Romania to foreign online stores: the introduction by the banks
in Romania of virtual cards dedicated for the payment on the Internet abroad (Taifun
card issued by BancPost which has an associated virtual card– Taifun Virtual – 5,400
cards issued within the 5 months from the introduction on the market of this new
product; a card especially destined for payment on the Internet - VISA Virtual -
issued by Banca Romaneasca). It must however be mentioned that, due to multiple
frauds originated in Romania, these cards are sometimes not accepted by the foreign
traders (e.g. www.amazon.com
Payment from foreign countries to Romania online stores: various on-line payment methods developed by the Romanian traders to allow for the payment from abroad:
Possibilities to make payments on-line by credit card for the Romanians located abroad by the shop opening an account with a foreign processor (e.g.
2checkout.com). The major disadvantage is the one related to the high charges required to open the account and the typically Romanian accounting problems created by selling abroad - Solution implemented by
Possibilities to make on-line payments for the Romanians located abroad by bank transfer – by the shop opening an account with a bank transfer site (e.g. Moneybookers.com). Disadvantage: the impossibility to make the payment of the products from Romania, the high charges, the accounting problems. Solution implemented by
Micro-payment systems – developed to allow for the payment of small amounts of money especially for the access to the content of certain sites – usually in the form of value added SMS– solution implemented by www.zf.ro or
2. Adopted and planned legislation and regulation necessary for the development of e-commerce in Romania.
The international legal practice indicates that the following issues have to be taken into consideration for the development of the e-commerce.
a) Telecommunication liberalisation is an important step in improving the e-commerce climate as the Internet largely depends on the communication system. The introduction of competition leads to a reduction of costs for the access to the Internet and promotes innovation and service quality. Romania, starting with January 1, 2003, has a completely liberalised electronic communication market that will contribute to an increase of access to the Internet in Romania.
b) Recognition of the electronic documents the purpose of which is to create a legal framework for the recognition of electronic contracts, the allowance of electronic proof and the acceptance of sending electronic documents to the governmental authorities. These aspects are covered by the provisions of the Electronic Signature Law no. 455/2001, the technical and methodological standards for the application of the electronic signature law of December 13, 2001 and the Electronic Commerce Law no. 365/2002. There are certain delays related to their application (such as the regulatory and monitoring Authority stipulated by Chapter IV of the Electronic Signature Law), but this does not in itself prevent the development of commercial trades by Internet.
c) Consumer Protection
The consumer has to be properly protected through legislation concerning for example misleading advertisements liability for defective products. There must also be adequate regulation on financial services.
Furthermore, in relation to online contracts and other distance contracts, the regulations have to provide the consumers with:
- the right of withdrawal
- the performance of the distance contract within 30 days
- the protection against fraudulent charges
Such provisions are covered by the Romanian legislation through the Law of Distance Contracts – Gov. Ordinance 130/2000, as well as through the Electronic Commerce Law. Regarding the protection of consumers related to the use of electronic payment that is provided for by BNR (National Bank of Romania) 4/2002 on the transactions performed by means of electronic payment instruments. The provisions in art 26 of the above mentioned regulation limits the liability of the owner to 150 euro, in case of a fraudulent use of the card. The provision will come into force on July 12, 2003. The IT&C Ministry has also drafted procedure for the approval of the distance access payment instruments, such as home-banking and Internet-banking applications and should be issued by the Minister before the end of February 2003.
d) Electronic funds transfer and the use of debit/credit cards
One of the challenges in establishing an operational electronic commerce regime is to identify a payment mechanism that can safely be used on the Internet. The development of an on-line payment system implies a series of complex problems related to security, liability and taxation. There are several on-line payment methods presently in the world: fund transfer through Automated Clearing House (ACH) – including electronic cheques, payment by credit/debit cards and stored value or e-money payments. Yet, the solutions to be adopted depend from country to country, and relate to the usual payment methods for the respective area.
Romania does not have a long experience as regards electronic payment methods. The most extended is the payment by debit/credit card but even in this area the figures are not yet encouraging although on the market there are about 4 million cards (the debit ones are predominant covering 85 % of them), more than 80% of their owners use them only to withdraw money from ATMs. However, the large number of cards is primarily an effect of the government decision obliging the public institutions to pay wages on debit cards. The number of shops accepting such payment is not significant (only 6,900 at the level of the entire country- out of which 4,000 have PoS terminals). A recent emergency ordinance (no. 193 of Dec.12, 2002) obliges the companies providing public utility services as well as the public institutions collecting taxes, charges, fines, penalties and other payment obligations to accept payment also by means of debit/credit cards. However the implementation of the ordinance is due 1 January 2004.
The regulations concerning the electronic funds transfer is provided by Regulation no. 4 of June13, 2002 of the National Bank of Romania on the transactions carried out by means of electronic payment instruments and the relations between the participants in these transactions. The regulation is primarily based on 97/489/EC Commission Recommendation of July 30, 1997 concerning transactions by electronic payment instruments and in particular the relationship between issuer and holder.
e) Dispute resolution
Problems can occur between sellers and buyers in any commercial activity. The uncertainty regarding the way to settle disputes can make the parties hesitant to use on-line acquisitions. When a small amount of money is involved, going to the court is not a practical option for most part of the consumers and SMEs. Usually, an option that can solve part of the problems is to use a rapid dispute resolution mechanism, easily accessible by electronic means and with low costs. These alternative dispute resolution systems can be a practical solution, useful for the development of the on-line commerce. Unfortunately in Romania these systems are not very well known as yet. Arbitration is still very little used (mainly through the Arbitration Tribunals set up by the Chambers of Commerce and Industry in the major cities), and mediation is at a very timid level. The Electronic Commerce Law no. 365/2002 – see art.20 provides however for the possibility to use such kind of systems.
f) Liability of Internet Service Providers
Another significant element on which a proper environment for e-commerce depends is providing mechanisms that should limit the civil and criminal liability of the Internet Service Providers (ISP) in case these entities act as intermediaries allowing access to the Internet. This approach is necessary in order to protect the ISPs from potential actions in court against them, in the case when illegal activities are performed by third parties using their services. This issue is clearly regulated by the Electronic Commerce Law no. 365/2002 – Chap IV, as well as the methodological standards for the application of the electronic commerce law of November 20, 2002 - chap. III.
g) Domain Names
RNC, as part of ICI – Institute for Informatics Research, is the institution designated to manage the domain name .ro Until now, there have not been major problems related to this, the only references being related to the modality to contest a domain name. The arbitration regarding domain name under .ro may be done at the Arbitration and Mediation Centre of the World Intellectual Property Organisation (WIPO), but RNC intends to create a Romanian arbitration system – which would solve part of potential dissatisfactions.
In addition, it has proved effective to regulate many e-commerce activities through codes of conduct developed by relevant professional associations. Such codes of conduct could cover spam issues, rating the content, user assistance or personal data processing.
3. Obstacles in the development of the electronic commerce in Romania
No further needs for legislation on electronic commerce have so far been identified. The major obstacles that make the electronic commerce lag behind are more related to the present situation of the next issues:
· Present situation of the Romanian banking system
The Romanian banking system, although lately much improved, still shows major problems as regarding the electronic inter-bank payment clearing. A clearing system between the banks is not yet implemented; thus clearing can take up to 5 working days. The lack of such a system makes the inter-bank payments rather difficult, implies large commissions and hence the banks are rather disadvantaged in accepting cards from other banks in their ATM or PoS terminals. This is valid even more for their use on the Internet where additional security and authentication problems may occur. For the administration of the national payment system, starting with 2000, The National Society for Fund and Clearing Transfer - TransFond was created by the central bank (BNR), which owns 33% of the its shares, and 28 commercial banks owning 67% of its shares. But an electronic payment clearing system will be operational only in 2004 at the earliest. This system will allow the clearing of amounts below 500 million lei in real time and for the rest in maximum 1 working
day. This is also one of the recommendations the Foreign Investors Council made in the presentation regarding Romania’s economy in May 2002 – Implementation of the Electronic Clearing System to eliminate the current delays and the excessive transaction costs and to make TransFond operational.
Nevertheless – the implementation of this electronic clearing system will not automatically mean the cards will be easy to use and accepted on the Internet. Almost each bank uses a different card processing solution without a real interaction between the different solutions:
· through Romcard – a company set up by certain banks in view of performing this service (such as BCR, Raifaissen, BCIT etc)
· their own system (e.g.. BancPost or BRD – Societe Generale)
· through private card processors (Paynet or Provus)
There is also a certain fear regarding the risk of the transactions, especially as no one seemed to be prepared to offer an insurance service covering transactions made by cards.
Under the circumstances the banks are not interested in the development of a system that would allow on-line payments by means of cards issued by other banks due to the low commission they can gain on this type of payments or the difficulties related to authentication the card in real time.
BancPost has however announced that they will offer an e-commerce service starting probably
in 2003, by means of which the companies interested may implement a computer system, based on the one developed by Softnet for the E-tax application. Payments will thus be possible from Romania but only through Taifun virtual cards issued by this bank. This application, as well as the e-tax system developed by Softnet, demonstrates how software companies are committed to make online payments possible even though the banking system is not yet designed for that service.
The low penetration rate of Internet, together with the very limited use of cards for shopping makes the interest of the companies in the electronic commerce rather low.
Mistrust and lack of information on electronic commerce.
The Romanian users, as well as the companies show no trust in an e-commerce system partly due to the lack of information in the domain. The news on the subject is mostly related to on-line frauds, fact which creates reservation and doubt regarding the success of such an approach. Banks do not recommend and in some cases even forbid the use of the issued credit/debit cards on the Internet, due to the fears related to data security.
There is no national awareness programme for SMEs concerning the economical aspects of electronic commerce and the ways in which they can be implemented, although some initiatives in this respect were supported by European Union. No campaign to inform users has been organised regarding what using electronic commerce means and involves.
The SME Ministry together with representatives from other Ministries initiated a national strategy on e-commerce during 2002, which, however, has not been concluded yet.
The elaboration by bank specialists of a study regarding the way in which, within
the Romanian banking system, a solution accepted by all banks to perform payments
on the Internet may be developed. The study should also focus on the part that
TransFond could play in this respect. A full collaboration between the IT associations,
National Bank of Romania and Romanian Banks Association should be developed in
order to implement a functioning electronic commerce system. It would be valuable to
the process if the Romanian Government, preferably through the IT&C Ministry and
SME’s Ministry, could participate as well, creating a functioning Public / Private
The support of national programmes to inform SMEs on the advantages of
The promotion of programmes to increase the number of Internet users, especially by the access from home and to increase the number of computers for personal use. Experience could be gained from other countries that have used schemes such as the deduction from the global income tax of the costs related to the acquisition of a computer. The RITI project, through its two parts RITI dot-Gov and RITI access, will explore the possibility to encourage the creation of Community Telecenters in the rural areas. Another solution could be the creation of further incentives for the citizens to use the Internet, such as the effect the extension of the e-procurement system will have for promoting B2B. Possible action may be the payments through Internet for public utilities or the obligation for the national and local public administration to use e-mail as an official tool of communication with citizens and companies.
The support and the creation of alternative methods to solve disputes related to e-commerce.
The initiation of various measures to create the trust of the users in digital economy, such as the initiation of a trust mark system for the e-commerce websites. These measures should be correlated with what is envisaged at the European Union level.
A strengthening by the National Bank of Romania of the regulations on protection for consumers as regarding the use of credit/debit cards on the Internet
Improvements or additions related to the electronic signature domain or others considered as related ones (such as the cryptography regulation, the electronic notary, time stamping) can be taken into consideration, but they are not of prime importance for the development of electronic commerce.
Website : www.magazinultau.ro
: November 2001
: PC’s, electronics, toys, sport
articles, office supplies, computer
2002 : 400 000 USD
sales for 2003 : 800 000 USD
Website : www.emania.ro
: September 2000
: various ( electrical devices,
computers, tourism, sport gadgets,
2002 : 8 billions lei = approx 240
Website : www.casadecomenzi.ro
: December 2000
: Various ( 22 categories)
Sales 2003 – 300 000 USD
Website : www.elanko.ro
: December 2002
: electrical devices, computers
sales 2003 : 2-4 billions lei =
approx. 60 000 – 120 000 USD
Website : www.shift.ro
: December 2002
: car accessories, constructions
materials , sport, audio-video,
office supplies, food
2002 : 506.2 millions lei = approx.
15 000 USD
sales 2003 : 6 billions lei =
approx. 180 000 USD
Website : www.itshop.ro
: computers components, software,
increase in 2002 : + 50 %
Website : www.buy-on-line.ro
: April 2002
: IT based products(computers,
printers, software, etc)
2002 : 150 000 Euro
Increase 2003 : 50-100%
Website : www.eflamingo.ro
: December 2001
: computers, PC components,
printers, office supplies
2002 : 600 000 USD (sales from all
11 virtual shops of Flamingo
sales 2003 : +200%
Website : www.digitalworld.ro
: August 2002
: IT and electronics
Website : www.stilo.ro
: March 2002
: watches, perfumes, porcelain, CDs
2002 : 15 000 USD
sales 2003 : 70 000 USD
Website : www.emag.ro
: January 2002
: PCs, computer components,
printers, office supplies
2002 : 150 000 USD
Sales 2003 : 1 000 000 USD
Website : www.baduc.store.ro
: November 2000
: construction materials and
2002 : over 100 millions lei =
approx 3 000 USD
sales 2003 : 2-5 billions lei =
approx 60 000 – 150 000 USD
Website : www.bebelusultau.ro
: April 2002
: designated for babies and their
2002 : 25 000 USD
sales 2003 : 75 000 USD
: November 2002
: Books and E-books
sales for 2003 : + 50%
point-of-sale (POS) terminal is
a computerized replacement for a
cash register. Much more complex
than the cash registers of even
just a few years ago, the POS
system can include the ability
to record and track customer
orders, process credit and debit
cards, connect to other systems
in a network, and manage