Concerns about Electronic-Commerce

By: Mary Nolan

Electronic-Commerce otherwise referred to as E-Commerce is defined by Kalakota & Whinston (1997) as:

"The delivery of information/products/ services/payments over phone lines, computer nets & other electronic means"

Products have been available for purchase by telephone for a number of years, a consumer provides credit card details, which are then verified by a teller and the consumer can then place an order, product types could range from saucepans to concert tickets. This method of purchase has proved popular as it is still in use today.

However with the evolution of the Internet, more products and services have become available on-line. This to the consumer should mean a more convenient way of purchasing various goods and services, as there are no more queues for tellers. However significant issues such as security are now emerging. Companies want tools that allow them to know with some certainty that customers are who they claim to be so that billing can be charged against the proper accounts. Similarly, consumers are concerned about the security and privacy of on-line transactions. They want to know that only authorised eyes will see personal account information or credit card numbers. Several dozen companies are working on extensions to Internet protocols to provide these types of security features.

When we make a purchase by telephone we are reasonably assured that our information is safe. However making an on-line purchase is slightly different. A purchase order with consumer's details is filled in analogous to a consumer filling out an order form and sending it in a paper envelope via postal mail. The consumer is reasonably certain that the order and credit-card

number will arrive safely, as any tampering with the envelope will be blatantly obvious. However Internet mail finds a route to its destination without knowing the identity of each node it passes through and any evidence of tampering is not as evident, this is tempting to unscrupulous individuals.

To defray these risks, many on-line businesses use various security protocols. One in particular is SET, Secure Electronic Transactions protocol. This is an open encryption (used to scramble a message and make it unreadable to intermediate nodes on its route) and security specification designed to protect credit card transactions on the Internet. SET is not itself a payment system. Rather it is a set of security protocols and formats that enables users to employ the existing credit card payment infrastructure on an open network, such as the Internet, in a secure fashion. With the use of Digital Certificates, used to identify each party involved in the transaction, both consumer and company can be sure they are dealing with the correct person.

With the development and improvement of these protocols purchasing on-line will become as much a part of our daily lives as getting out of bed in the morning.