Lecture 13 -_e-commmerce_e-banking_and_advanced_tech

BITS 2513: Internet Technology

Lecture 13: E-Commerce, E-Banking & Advanced Internet

Technology Application

Learn how to…

• Define e-commerce.• List the technological components

required for e-commerce.• Define the payment models.• Differentiate e-commerce solutions.• Manage the development of an

e-commerce solution.• List the issues with trading internationally.

Defining E-Commerce

What Is E-Commerce

• Electronic commerce (e-commerce) is the integration of digital communications, data management, and security capabilities that allow organizations to exchange information related to the sale of goods and services. OR

• Buying and selling of information, products and services via computer networks today and in the future, using any one of the myriad of networks that make up the Internet

Elements

• Digital communication• Data management• Security

Scenario

• A shopper browsers an online catalog and places items desired into a virtual shopping cart.– Shoppers can add or take out items at any

time from their shopping cart.• The shopper goes to the virtual checkout.

– The shopper decides on a delivery method.– The shopper uses digital cash or e-cash

drawn from a digital wallet, a digital check, or a regular credit card to pay for the purchases.

E-Commerce Model

• Business-to-consumer (B2C) model is when an end user buys something from a company’s online storefront.

• Business-to-business (B2B) model is when companies conduct business electronically between themselves.– B2B2C is used when a business buys from

a wholesaler to sell to a consumer.

E-Commerce Model

• C2B - Consumer to Business - a growing arena where the consumer requests a specific service from the business.

• C2C - Consumer to Consumer – these sites are usually some form of an auction site. The consumer lists items for sale with a commercial auction site. Other consumers access the site and place bids on the items.

E-Commerce Model

• Business to government (B2G) –involves electronic interaction between business and a government body in the form of electronic tendering and procurement

• Government to consumer (G2C) –ecommerce that involve transactions with the government and consumer. Example, speeding tickets and traffic fines may be paid online

Enabling E-Commerce Technologies

Critical Elements

• Communications– A common digital language must be

understood.• Security

– Consumers need to feel confident in trading online.

• Data Management– Transactions must be stored in a way that can

be audited and recover if there are outages.

SET

• Secure Electronic Transactions (SET) is an open standard for conducting secure payment card transactions over the Internet.– SET uses encryption and digital certificates

from financial corporations.– Merchants never see the customer’s credit

card number.– .

SET• Cardholder: an authorized holder of a payment

card (MasterCard, Visa, and so on) that has been issued by an issuer.

• Merchant: a person or organization with goods or services to sell to the cardholder – must have a relationship with an acquirer.

• Issuer: This is a financial institution, such as a bank, that provides the cardholder with the payment card.

• Acquirer: This is a financial institution that establishes an account with a merchant and processes payment card authorizations and payments.

• Payment Gateway: This is a function operated by the acquirer or a designated third party that processes merchant payment messages.

• Certification Authority (CA): This is an entity that is trusted to issue X.509v3 public-key certificates for cardholders, merchants, and payment gateways

SET• The customer opens an account. • The customer receives a certificate. • The customer places an order. • The merchant is verified. • The order and payment are sent. • The merchant requests payment authorization. • The merchant confirms the order. • The merchant provides the goods or service. • The merchant requests payment.

E-Banking

E-Banking• Electronic banking is an umbrella term

for the process by which a customer may perform banking transactions electronically without visiting a brick-and-mortar institution.

• The following terms all refer to one form or another of electronic banking– personal computer (PC) banking– Internet banking– virtual banking– online banking– home banking– remote electronic banking.

E-Banking

• PC banking and Internet or online banking are the most frequently used designations.

• It should be noted, however, that the terms used to describe the various types of electronic banking are often used interchangeably

Scenario

• Currently, only banking institutions licensed under the Banking and Financial Institutions Act 1989 and the Islamic Banking Act 1983 are allowed to offer Internet Banking services in Malaysia

FAST AND CONVIENIENT• Internet Banking provides with a fast and

convenient way to undertake various banking transactions from the comfort of your home, office or wherever during and after banking hours.

• Most banking institutions offer the service 24 hours a day, 7 days a week. You avoid traveling time and the need to wait in queues to access banking services or to pay bills

WHAT IS NEEDED TO DO INTERNET BANKING ?

• Internet Banking does not require special software or access to a private network, but is conducted through the Internet.

• Computer with Internet access • Internet browser• Registered for an Internet Banking service with

banking institution, • It is also recommended a personal firewall and

regularly update virus protection software.

BANKING SERVICES AVAILABLE ONLINE

Some of the main services offered through Internet Banking:

• Check balances and statements online • Submit applications for new accounts, credit cards or

loans online • Place fixed deposits • Transfer funds between accounts (own and third party) • Pay bills, credit cards, loans and insurance premiums • Create, change and cancel standing orders • Request for cheque books and statements • Check the status of your cheques • Request for stop cheque payments • Apply for Bank Drafts and Telegraphic Transfers

IS INTERNET BANKING SAFE?

• Actions taken by Banking Institutions to ensure security before starting out on Internet Banking

• Banking institutions have spent a lot of time and effort to ensure that their Internet Banking set up is safe for consumers.

• In addition, banking institutions offering Internet Banking are also required to comply with the minimum guidelines issued by Bank Negara Malaysia.

IS INTERNET BANKING SAFE?The safety measures taken by the banking institutions are:

• Regular tests of the system to ensure its reliability • Provision of Internet security arrangements to ensure a

secure infrastructure • Usage of a number of security technologies such as

encryption, firewalls, automatic log-off and monitoring tools

• Installation of a system to detect and disable attacks from hackers

• Undertake a periodic review every 6 months to assess possible risks and detect possible weaknesses in the banking institution’s risk management

Responsibility of E-Banking User

• Do not reveal Login ID and Password or PIN • Check for the right and secure website• Protect personal computer from hackers, viruses

and malicious programs• Be careful when downloading software• Do not leave computer unattended when logged

in and always remember to log-off

PRIVACY

• Responsibilities of banking institutions in ensuring privacy

• Customers are advised to read the privacy policy statement of the banking institutions posted at their websites prior to providing their personal information.

Mobile Banking• Offers online banking on mobile phone.• Service include, check account balance, pay bills and transfer

money • Benefits

– Flexible, anywhere, anytime– Easy and Simple– Convenient– Privacy - private access

• Requirements– Mobile phone with GPRS or 3G access (Java & MIDP2.0).– Registered with the bank institution – Activated account

• Currently offers by M2U Mobile by Maybank

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Streaming Multimedia

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Enhancing Web Sites with Multimedia

• Multimedia is any combination of text, graphics, video, or sound.

• A Web site can provide multimedia information in one of two ways: streaming or non-streaming data.

• Non-streaming data is data that is downloaded as a file from the server to the browser.

• With streaming data, the browser receives the data in a continuous stream.

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Protocols

• Streaming data uses UDP (User Datagram Protocol) instead of TCP to transmit data from the server to the client.

• UDP does not require a connection before sending packets.

• Because UDP does not guarantee that data is received, sometimes quality is not high because packets can be lost.

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Protocols (Cont’d)

• Another difficulty is that UDP packets sometimes are not allowed through an intranet’s firewall.

• Streaming data sometimes uses RTP (Real-Time Transport Protocol), which uses RTSP (Real-Time Streaming Protocol) and HTTP.

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Internet Telephony

• Telephony is the technology of telephones, and Internet telephony is the technology of using the Internet to make telephone calls.

• Today, several Internet telephony implementations are available, including:– PC-to-PC– PC-to-phone– Phone-to-phone

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Internet Telephony (Cont’d)

• On the Internet, data is divided into packets for transmission across the network.

• Each packet might take a different route to reach its destination.

• It’s up to the computer at the receiving end to reassemble the packets into the original order and maintain the continuity.

• A network that uses this approach is called a packet-switching network.

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Internet Telephony (Cont’d)• The public telephone network is a circuit-switching

network.• The term full-duplex refers to such a transmission, in

which data travels in both directions.• A transmission in which data travels in only one direction

at a time is called half-duplex.• Because of this circuit-switching approach, the public

telephone network is called the Public Switched Telephone Network (PSTN)

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Wireless Communications Generation

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First-Generation (Analog)

• Advanced Mobile Phone Service (AMPS)• In North America, two 25-MHz bands allocated to

AMPS• One for transmission from base to mobile unit• One for transmission from mobile unit to base

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Differences Between 1G and 2G Systems

• Digital traffic channels – 1G systems are almost purely analog; 2G systems are digital

• Encryption – all 2G systems provide encryption to prevent eavesdropping

• Error detection and correction – 2G digital traffic allows for detection and correction, giving clear voice reception

• Channel access – 2G systems allow channels to be dynamically shared by a number of users

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2.5G• It is a stepping stone between 2G and 3G cellular

wireless technologies• The term is used to describe 2G-systems that have

implemented a packet switched domain in addition to the circuit switched domain

• It does not necessarily provide faster services• The term was invented for marketing purposes only • Provides some of the benefits of 3G

– e.g. it is packet-switched and can use some of the existing 2G infrastructure in GSM and CDMA networks

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3G• Meet the growing demands in the number of subscribers (increase

in network capacity)• Rates required for high speed data transfer and multimedia

applications • Based on two parallel backbone infrastructures, one consisting of

circuit switched nodes, and one of packet oriented nodes• Uses 5 MHz channel carrier width to deliver significantly higher data

rates and increased capacity

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4G• Infrastructure and the terminals will have almost all the standards from 2G

to 3G implemented• The infrastructure will however only be packet based, all-IP• The system will also serve as an open platform where the new innovations

can go with it• Some of the standards which pave the way for 4G systems are WiMax,

WiBro, and the proposed 3GPP Long Term Evolution work-in progress technologies such as HSOPA

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Wireless Standard Comparison

Parameters 802.16a (WiMAX) 802.11 (WLAN) 802.15 (Bluetooth)

Frequency Band: 2-11GHz 2.4GHz 2.4GHz

Range ~31 miles ~100 meters ~10meters

Data transfer rate: 70 Mbps 11 Mbps - 55 Mbps 20Kbps - 55 Mbps

Number of users: Thousands Dozens Dozens