E-commerce Technology for Safe money transaction over the net

E-commerce Technology for
Safe Money Transaction Over the net
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Presented and Published
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National Conference on Automation in Banks and Financial Institutions
22-23 June 2000 organized by IETE Chandigarh, held at CSIO Chandigarh

Presenter
Noorjahan Haque
Faculty, Information technology
Institute of Electronics & Telecommunication Engineers (IETE)
Chandigarh

Co-Author
Raman K. Attri
Member IETE / Scientist,
Central Scientific Instruments Organization (CSIO)
Chandigarh

Copyrights © 2000 Neeru Haque / R. K. Attri

Agenda

Evolution of E-commerce
features of E-Commerce
Technology behind E-com
Money Safety issues and measures


Meaning of E-commerce

E commerce
E-commerce stands for every kind of money transaction
transaction,
selling, purchasing or exchange of services or products
over the Internet
Web shopping is only a small part of the e-commerce
picture. The term also refers to online stock and bond
transactions and buying and downloading software
without ever going near a store.
In addition, e-commerce includes business-to-business
connections that make purchasing easier f
i h k h i i for bi
big
corporations.


Evolution of E-Commerce

The e-commerce and e-business has evolved through a set
of technological changes coming in picture
Internal Computerization in the company
(Computerization and internal Networking with no outer
world interaction)
Electronics Data Interchange with
suppliers(Extension of Internal network to suppliers to
access company data base)
Internet Connectivity to End Users (Extension of
End-Users
external network to end users)
E-commerce Revolution (money transaction, selling
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and purchasing over the internet)

Typical Evolutionary Path of E-Com
Too clumsy
E-mail usage
Sophisticated
Company Wide
Simple E-mail E-mail System
E-mail

Need employee info
Little return on
investment
Simple Web ignored Dynamic/interactive Secure info to
Sophisticated Static
p
brochure
b h Web it
W b site Trading
T di partners
t
Web sites

Need to update info Need partner and
Difficult to maintain
security info
Meet internal
Demands
Basic Internal info Little used Web maintenance Key Internal Back office
on Intranet System Database on Internet system linked

Improved internal Need back
Need product info Customer functionality
y office info
info

Simple On-line Few sales Customers Stock control ,
Full Catalogue
Sales Personalized shipment tracking
Want to
keep customers Reduced cost
improved efficiency

Next Generation E-business

Technologies contributing in E-com

• Recent advances in telecommunications and computer
technologies h
h l i have moved computer networks to the center of the
d k h f h
international economic infrastructure.
• Heavy rise in Internet and the World Wide Web has
transformed global commerce b
f d l b l by f ili i
facilitating iinstantaneous,
inexpensive contact among sellers, buyers, investors, advertisers and
financiers anywhere in the world.
• The
Th rapidid integration
i t ti of
f Internet
I t t andd other
th
telecommunications-based functions into nearly every sphere
of business has led to an international focus on the New World of e-
commerce.
commerce


E-commerce Setup

Electronic commerce encompasses all business
conducted b means of computer networks
d d by f k
Server
ISP
Back Office
links
Internet

Back Client
ISP Bone PC
My LAN Net

Total Quality of service

Business Communication: Old Way

Company A POST

FAX

Proprietary Data Comm Company B
(EDI/VANs


Challenges in going E-commerce

Getting into e-commerce is not as simple as setting up a Web page
e commerce
with an order form.
There are three big internal challenges in "e-enabling" business. All of
them have to be overcome to have a complete end-to-end e-business
end to end e business
running.
a)The first is to take your back-office processes online and to automate
your workflow
b)The second challenge is to make data-sharing possible across
disparate applications like your ERP systems, your supplier’s systems,
and your e-commerce order-taking systems
systems.
c) Third is to automate your decision-making process.


Impacts of E-Commerce

Electronic business is using innovative technology to build
relationships and commerce globally and is the greatest
opportunity and/or threat to existing business models
The e commerce has changed the way the business is done
e-commerce
The mode of communication is changing big way both in
and outside the company. The old way of correspondence
is obsoleting and new way, through internet and intranet
are in picture.


Business Communication: Internet Way

Internet Server

Company A •Web
Wb
•E-mail etc
Company X

FAX/Post/point to point
(to known location)
Company B


Business Communication: Intranet Way

Company X
Company A

Company B

Community of Trust

FAX/Post/point to point
(to known location) Internet Server
I S
Company X
•Web
•E-mail etc


Elements of Trustworthy E-commerce Services

The i i l l
Th principal elements of t t
t f trustworthy i th context of on-line
th in the t t f li
commercial transactions are:
• Security: Information transmitted during a transaction will
arrive i uncorrupted f
i in t d form and will not b i
d ill t be improperly l k d t
l leaked to
others.
Privacy: Protection to access and use of personal information
obtained as a result of electronic t
bt i d lt f l t i transactions.
ti
Authenticity: Verification that the parties to a transaction,
and the services rendered, are truly as represented.
Non-repudiability: Assurance that a transaction will be
honored as agreed and that each party can prove the validity of
the terms of the deal in the court.


E-commerce Security Issues

Security is the biggest issue of E commerce
E-commerce.
Secure e-commerce transaction has to insure protection of
assets and privacy.
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It should give reliable service, audit and accountability and
identification procedure
Business and government i i i
i d institutions must d l
develop
policies that build greater trust in the new transaction
media


E-commerce Security Technologies

(To be used in combination to ensure security)
Encryption (coding of messages)
Cryptography (data transmission security by encryption
of contents of message)
f t t f )
Digital Signature (To prove that it's really genuine user -
Its really me!)
ts ea y e!)
Digital Certificate (user authentic identity-who am I?)
Firewall ( network and traffic watch to avoid
unauthorized access of the network resources)


Encryption

Coding the transmitted message or credit card number with the help of
some algorithm and a encryption key.
Encryption provide security in highly-networked environment
Applications include protecting files from theft or unauthorized access,
keeping communications secure from interception, and facilitating
secure transactions
Highly secure encryption can be deployed fairly cheaply
2.0 versions of Netscape Navigator and Microsoft Internet Explorer
facilitate transactions encrypted using Secure Sockets Layer (SSL), a
protocol that creates a secure connection to the server, protecting the
information as it travels over the Internet
When Web site is secured by SSL, the URL begins with https instead of
http.


Cryptography

Encrypting the contents with one key and decrypting with
another key. One is called private key and other is called
public key. The message encrypted using receiver's public
key can be decrypted only by receiver's private key
It is used to guarantee integrity (i.e. that the contents of a
file or message have not been altered) to establish the
altered),
identity of a party, or to make legal commitments.
The strong crypto-system are now available which use
different algorithms like DES, IDEA and RSA


Digital Signature

Now in e-commerce the issue that how one know that
it is really me? Evolving a digital signature does it.
The digital signature is kind of message, known to me
only and representing me. It is encrypted using my
private key and anyone can decrypt it using my public
key.
The reception end, i i proved h I h
h i d it is d hat have encoded the
d d h
message and signed it.
This technology makes the basis for the electronics
cash. This is also the basis for user authentication and
non-repudiation.


Digital Certificate

Just signing on my messages is not enough A identity
enough.
has to be assigned to the fellow using the e-commerce
services. It reflects who am I? This is digital signature.
These digital certificates are issued by some trusted
third party.
A di it l registry of all di it l certificate h ld
digital i t f ll digital tifi t holders i is
made.
The client negotiates with the registry before doing
g g y g
business with the server. Severs have the user's
signature


FireWall

The firewalls are basically a software or set of
protocols which isolate the networks and the traffics
The fireball have following three objectives:
-It keeps out external threats like virus and
unauthorized access from external person.
-it pre ent internal sensiti e data to be transmitted
it prevent sensitive
outside without authorization.
-It prevent internal attacks
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Firewalls itself are not full proof security techniques


Safe Money Transaction Technologies

Credit Cards (for purchasing at Point of sale counter using card
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reader and web based on-line transaction on credit. Instant validation
of account and deduction after the sale)
Smart Card Digital Currency (In form of smart card for all
kinds of payments an on the instant deduction of money from the
account)
Electronics Ch
El i Cheques (pre-issued software modules each
representing certain cash value, to be exchanged over the internet in
place of any money or smart card number)
Hybrid Mode (includes major and minor payment by smart card,
coins, cheques etc--all in one)


Credit Card

Internationally accepted mode of payment in two forms
Credit card at Point of Sale Counter (POS terminal
reads the card details and verify it over phone lines
from the acquiring bank and credit card issuing bank)
Web Based Online-Credit Card Payment System
(validation over the net through servers)
SET protocol encodes the credit card numbers on
vendors' servers so that only banks and credit card
companies can read it
The disadvantages of the credit card is that a third party
approval like bank and its fees is involved


Digital Currency

This is basically two mode meant both for major and micro-payments :
a smart card technology
digital coins
The smart card reader reads the smart card inserted in the smart card
reader hardware cartridge and sends the account information from the
card to the the issuing bank over the internet and after validation the
amount being paid online is deducted form the account of the person's
gp p
account.
One more option is digital coins in form of software modules having
unique identification number and particular amount. Can be submitted
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over the net for purchasing. Retailer can further use it for his own
purpose and recycle it


Electronics Cheques

These are pre-issued cards replacing cheque Each
pre issued cheque.
card module represent some predefined cash amount.
It is to be submitted where purchasing is being done.
No need of validation and third party involvement
unlike credit card transactions.
Cheaper as third part fees is not in ol ed
party involved.
Since the cheques are generally used in public, this
mode of money transaction is expected to be quite
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popular.


Hybrid Mode -Cybercash

The Cybercash i getting wide popularity among the world
Th C b h is i id l i h ld
leader banks, merchants and users globally. The cybercash
interface with many leading financial institutions.
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It facilitate hybrid mode of payment which include credit
card payment system working on SET protocols and
Cybercoin system f payment f
C b i t for t from $0 25 t $10
$0.25 to $10.
It also support electronics cheques providing pay now
facility for interactive billing applications.
y g pp


The arena of E-business

E-Business is the powerful business environment that is
created when critical business systems are connected
directly to customers, employees, vendors, and business
partners using intranets, extranets, E-Commerce E Commerce
technologies, collaborative applications, and the Web.
Developing E-Business successfully means building
reliable, scalable systems f
li bl l bl for security, collaboration,
i ll b i
messaging, E-Commerce payments, supply-chain
management, sales force, data warehousing, and customer
g , , g,
relations - and integrating all of this with existing back-end
operations


About the author

Noor Jahan Haque earned her Masters in Information technology
in 1999. She served at IETE as associate faculty from 2000-2001.
neeruhaque2000@yahoo.com
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Raman K. Attri, Masters in Technology (Applied Electronics)
served as senior scientist at CSIO Chandigarh from 1995-2005. His
1995 2005.
specialization is in Instrumentation systems. rkattri@rediffmail.com


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