UNIT – 5 Servers and Commercial Environments An online commerce environment is differentiated from an e-payment system. Online commerce environment is an invention of the industry, offering a method of packaging all the products necessary to sell online. Although the WWW server is the central in an online commerce environment, it cannot stand alone. Payment Methods: Merchants have traditionally allowed their customers to use a variety of payment methods. Many online merchants offer customers a range of options for online and offline ordering. The advantage of secure server is that it serves the Internet consumer who has a new WWW browser and a credit card but has never set up to use any e-payment system. Server Market Orientation WWW server software comes in all shapes and sizes. II MCA//Unit – 5 //E-Commerce// Kalaignar Karunanidhi Institute of Technology Page 1
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UNIT – 5
Servers and Commercial Environments
An online commerce environment is differentiated from an e-payment system.
Online commerce environment is an invention of the industry, offering a method of packaging all the products
necessary to sell online.
Although the WWW server is the central in an online commerce environment, it cannot stand alone.
Payment Methods:
Merchants have traditionally allowed their customers to use a variety of payment methods.
Many online merchants offer customers a range of options for online and offline ordering.
The advantage of secure server is that it serves the Internet consumer who has a new WWW browser and
a credit card but has never set up to use any e-payment system.
Server Market Orientation
WWW server software comes in all shapes and sizes.
Web browsers that support S-HTTP can be used with servers that support S-HTTP to produce a secure
channel.
Microsoft and Netscape have incorporated support for S-HTTP and SSL into their browsers.
Other WWW servers support secure commercial transactions by implementing PGP.
Netscape Commerce Servers
Netscape’s approach to developing its business as an Internet commerce environment provider has so far
proven successful.
Netscape guarantees that anyone can create a server that will be compatible with Netscape secure browsers.
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Netscape has defined the protocols needed to do business with all the people who use the Netscape browser.
The most basic Web browser must be able to handle three protocols:
URL
HTTP
HTML
The Netscape 6 browser combines Netscape Communicator and Netscape Navigator with a suite of Internet
tools for high-performance Internet mail, Web page creation and instant messaging.
Securing Your Netscape Browser and Site for E-Commerce:
Web transactions lack the reassuring physical merchandise and face-to-face interaction with merchants.
In the anonymous Web world, customers and Web merchants must deal with the following faceless
threats:
Unauthorized access
Data alteration
Monitoring
Spoofing
Service denial
Repudiation
The Solution – Netscape’s Digital Certificate Authority Program:
Designed to make it easier for Netscape customers to get and use digital certificates.
Offers both client and server certificate services.
There are two types of digital certificates that are important when building secure E-commerce Web sites:
Server certificates – Allow visitors to the site to send personal information but which are free from threats.
Personal certificates – Allow the site to authenticate a visitor’s identity and restrict access to specified content
to particular visitors.
Several security standard protocols are being widely adopted for electronic communication that rely on digital
certificates:
SSL (Secure Socket Layer)
S/MIME (Secure Multipurpose Internet Mail Extensions)
SET (Secure Electronic Transactions)
IPSec (Internet Protocol Secure Standard)
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Microsoft Internet Servers
There is still a great deal of competition between Netscape and Microsoft in the battle for Internet market
share.
Like Netscape, Microsoft has developed both Internet browsers and servers.
Microsoft Internet Digital Commerce Payment System Strategy
Microsoft is currently delivering a server and tools digital commerce foundation based on Site Server,
Enterprise Edition.
Site Server, Enterprise Edition integrates with the Microsoft Internet Security Framework and Windows
NT Security.
Microsoft Wallet
A cross-server payment front-end solution.
Available as an ActiveX control for IE users and as a Netscape plug-in.
Site Server, Enterprise Edition integrates with and uses the Microsoft Wallet.
Consists of the Payment Selector control and the Address Selector control.
Site Server, Enterprise Edition
A comprehensive Web site environment for the enhancement, deployment and advanced management of
commerce-enabled Web sites.
Digital Commerce Server provides the Server components, site creation and management tools and Buy
Now.
Server components
Provide the run-time environment for the presentation and operation of online commerce Web sites.
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Site creation and Management tools
Support remote creation and management for hosting service providers.
Including the StoreBuilder wizard.
Buy Now
A new online selling technology.
Microsoft Windows NT Server and Active Server (IIS, ASP and Microsoft Transaction Server)
Microsoft IIS is the only Web server integrated with the Microsoft Windows NT Server.
Microsoft ASP allows the combination of HTML, scripts and server components to create dynamic HTML
and to enable powerful Web-based business solutions.
Microsoft Transaction Server simplifies the development infrastructure needed to execute business
logic.
Microsoft Internet Security Framework and Windows NT Security
The framework is a comprehensive set pf cross-platform, interoperable security technologies that
support Internet security standards.
Microsoft Windows NT Server offers excellent security services for account management and enterprise-
wide network authentication.
Open Market Softgoods Transaction Model
Open Market Inc. uses a formal model for transacting business across the Internet.
Its most interesting contribution is its comprehensive approach to producing an overall “commercial
environment”.
It separates the content server from the transaction server.
The process begins with a customer browsing a content server.
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Additional services include special gateways that may be available to link the transaction server to financial
networks.
Simply having a secure WWW server may not be sufficient to perform online commerce.
Open Market has enjoyed tremendous growth, much of which is due to the fostering of strategy relationships
with business partners.
E-Commerce in Banking
Retail and investment banking stand to profit most from E-commerce.
The role of E-commerce in banking is impacted by changes in technology, the emergence of new banking
institutions and basic economic restructuring.
Technology is enabling the development of new products and services.
Technology is changing the interaction between banks and consumers.
Four distinct factors contribute to the new competitive environment:
1. Changing consumer needs driven by online commerce
Customers want to be able to bank at their convenience.
Bankers want more stable and long term relationships with their customers.
E-banking enables the bank customer to be reached, served and sold products and services in their
homes and offices 24/7.
2. Optimization of branch networks in order to reduce costs
Online technology can deliver services far more economically than the existing methods.
If banks are going to compete with larger competitors, they have to address their traditional banking
overhead structures and their existing retail strategies.
3. Changing demographic trends and potential new consumer market
The reduced level of job security and the need to plan for the future has heightened concern over
personal debt, retirement planning, tax planning and saving for college.
4. The companies that take advantage of this opportunity by targeting the appropriate customers with
appropriate products and services will have a lasting competitive advantage.
5. New online financial products
Additional development of e-cash, such as smart cards could stimulate further banking consolidation.
E-banking offers an inexpensive alternative to branching to expand a bank’s customer’s base.
Smart cards and other forms of e-cash could be the key to consumer acceptance of home banking.
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Internet Banking vs. Online Banking
Internet banking means:
Consumers do not have to purchase any software.
Consumers can conduct banking anywhere as long as they have an Internet connected computer.
Consumers can download account information into their own choice of programs.
Allows banks to break out of the control of software developers.
Internet Banking Architecture
Open vs. Closed Models
Two technology models of online banking:
Open systems
• Content changes can occur easily because of the use of standard technology and components.
Closed systems
• Content changes are difficult to since everything is proprietary.
Banks need to be familiar with both these models.
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E- CASH
Overview of Electronic Cash Payment Protocols and Systems
What is cash payment?
- Cash payment is currently most popular form in conventional payment system in the world.
- Currently cash payment involves 75% - 95% of all transactions are paid in cash..
- Transactions are paid in a cash form (such as $ bill) from a buyer to a seller.
An electronic cash payment system usually is developed based on an electronic payment protocol which
supports a series of payment transactions using electronic tokens or coins issued by a third party.
There are three types of users:
- a payer or consumer
- a payee, such as a merchant
- a financial network with whom both payer and payee have accounts.
Overview of Electronic Cash Payment Protocols and Systems
The basic attributes of cash payment
1. Acceptability: Cash almost universally acceptable as a form of payment, regardless of the transaction amount.
2. Guaranteed payment: cash guarantees the payment after the transaction is over. There is no risk of it been rejected
or bounced.
3. No transaction charges: cash is handled from buyers to sellers with no transaction charges.
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4. Anonymity: many other forms of payment involve a paper trail linking either or both parties with the transactions.
Cash allows transactions take place anonymously.
Actors Involved in Electronic Cash Payment Systems
1. Customers: Customers use the digital cash payment systems to make purchases.
2. Dealers: Dealers have to bear the costs of payment transactions.
3. Providers for digital payment systems:
Providers are intermediaries between dealers and financial institutions. They provide services and training.
4. Development vendors for digital payment systems:
5. Financial institutions:
Banking systems or organizations who use electronic payment systems.
6. Trust Centers:
They control digital signature keys, and help to secure customer confidence in certain payment
systems. They are responsible for the integrity of transmitted data and authenticity of contractors.
Basic Requirements for Electronic Cash Payment Systems
1. Digital money:
Payment systems must provide customers and private households with acceptable digital money.
2. Security:
Ensure the security of transactions and information privacy of users.
3. Scalability:
A large number of customers and concurrent transactions should be handled in a scalable manner.
4. Efficient and effective:
Payment systems must support efficient and effective payment processing and accounting services for small
payment transactions.
5. Simple and lost cost:
Payment systems must provide customers with simple and low cost transparent transactions.
Basic Requirements for Electronic Cash Payment Systems
1. Anonymous:
Usually, customers wish to stay anonymous for all involved transactions.
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2. Double spending:
A digital coin consists of a number of bits. Payment systems must be able to recognize and/or prevent repeated
payments with the same digital coin.
3. Exchange:
Digital money should be convertible into “real” money whenever necessary.
4. Store:
Digital money must be stored locally on hard disks or other media.
5. Value:
Digital cash payment systems must provide a large number of digital coins for circulation and perform
authentication checking.
Advantages of Electronic Cash Payment Systems
1. Saved time:
- Reduce transaction process time
- Speed up transaction processes
2. Reduced costs:
- Reduce transaction costs
- Reduce cash distribution costs
3. Flexibility:
- Digital cash can take many forms, including prepaid cards
- Digital cash can be converted into different currencies
4. Reduce cash distribution risk:
- Reduce the regular cash distribution risk
5. Error free and efficient:
- Reduce transaction errors
Special Features of Electronic Payment Protocols
Features of electronic cashes:
- Portable, divisible, recognizable, untraceable, and independent from physical locations.
Important features of electronic cash payment protocols and systems:
1. Anonymity: This ensure that no detailed cash transactions for customer are traceable. Even sellers do
not know the identity of customers involved in the purchases.
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2. Liquidity: Digital cash have to be accepted by all concerned economic agents as a payment method.
3. Prepaidcards:
Buyers can buy prepaid cards that are accepted by special sellers.
4. Electronic payment processing: all transactions are processed electronically.
Transactions Types in Electronic Cash Payment Systems
Three types of transactions:
Withdrawal: the payer transfers some of money from the bank account to his or her payment card.
Payment: the payer transfers the money from the card to the payee.
Deposit: the payee transfers the money received to the bank account.
Two types of implementations:
- On-line payment: --> the merchant calls the bank and verifies the validity of consumer’s token or electronic
coin before accepting the payment and delivering the merchandise.
- Off-line payment: --> the merchant submits consumer’s payment for verification and deposit sometime after
the payment transaction is completed.
Primary advantage is with purchase of items less than $10
– Credit card transaction fees make small purchases unprofitable
– Micropayments
o Payments for items costing less than $1
Electronic Cash Payment Protocol: ECash
What is Ecash?
Ecash was developed to allow fully anonymous secure electronic cash to be used on the Internet to support online
trading between buyers and sellers.
Overview of Ecash:
Ecash is a payment protocol for anonymous digital money on the Internet.
It is developed by DigiCash Co, of Amsterdam, The Netherlands.
It is currently implemented and offered by Mark Twain Bank,
St. Louis since 1995.
DeutscheBank Ag, Frankfurt (Main) offers Ecash as a pilot project to its
customers since October 1997.
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Ecash model:
Three participants are involved in Ecash payment model:
clients, merchants and banks.
Client wallet software:
- clients have Ecash wallet software (cyberwllet) on their computers.
- they can use Ecoins in their wallet to make purchases from merchants.
- withdraw coins from their accounts in a Ecash bank.
- store and manage client’s coins, track all transactions.
Merchant software:
- accept and process payments
- interact with Ecash bank to perform validation and authentication
- sell items and generate receipts.
Banks: clients and merchants have accounts at an Ecash bank.
- manage and maintain accounts of clients and merchants
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E-CASH CLIENT SOFTWARE IMPLEMENTATION
Ecash Coins:
- Ecash coins are pieces of data that can be copied.
- The value of Ecash coins cannot be included with the serial number in the fields of the coin.
- Use a different signature key for each coin denomination.
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– Embedded microprocessor
o (OLD) 8-bit processor, 16 KB ROM, 512 bytes RAM
o Equivalent power to IBM XT PC, cost $7.00-15.00
o 32-bit processors now available
SMART CARD FUTURE
• At this time, over a billion smart cards are in use, primarily in Europe. Because the current infrastructure in the
US is designed for credit cards with magnetic strips, there has been a slower rate of adoption of smart cards in
the US. The use of Smart Cards in Europe received its initial boost from the French government in 1985 when it
purchased 16 million cards for use by its then state-owned bank.
• There are two industry standard groups dealing with issues related to Smart Cards:
• Personal Computer / Smart Card (http://www.smartcardsys.com/)- interface between programming and PC
hardware in a smart card, representing Microsoft, IBM, Bull, Schlumberger, and other interested companies.
Smart Card Industry Association (http://www.scia.org/)
• OpenCard - a smart card operating systems: JavaCard and MultiOS
Smart Card Standards
OpenCard Framework is supported by Sun Microsystems, IBM, Oracle, Netscape. It is a standard for NCs, emphasizes
portability and personalization, and adopts Java.
Personal Computer Smart Card (PCSC) Workgroup Standard is proposed by Microsoft and supported by Schlumberger
Electronic Technologies.
Sun’s Java Card API, endorsed by Citibank, Visa, First Union National Bank, VeriFone.
Motorola formed a Smart Card Systems Business unit for contactless cards using radio.
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ADVANTAGES AND DISADVANTAGES OF SMART CARDS
• Advantages:
1. Atomic, debt-free transactions2. Feasible for very small transactions (information commerce)3. (Potentially) anonymous4. Security of physical storage5. (Potentially) currency-neutral
• Disadvantages:
1. Low maximum transaction limit (not suitable for B2B or most B2C)2. High Infrastructure costs (not suitable for C2C)3. Single physical point of failure (the card)4. Not (yet) widely used
THE CHIP
Construction of Smart Cards
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ELECTRONIC DATA INTERCHANGE
EDI stands for Electronic Data Interchange. EDI has been developed by the United Nations/ECE Working Party in the 60s
as a standard to simplify and standardize external trade documents.1)
It became more important with the internet boom in the mid- and late-nineties. However, EDI is not depending on any
special technologies.2)
The three essential elements of EDI are
an electronic transmission medium (e.g. a peer-to-peer network or the internet)
an agreed standard for structuring and formatting messages
a fast delivery of electronic documents from sender to receiver.
Definition:-
EDI is a concept to transform specific content of e.g. invoices, delivery notes, purchase ordes and other trade
documents into standardized content and back into specific content. It is regularly used to interchange data between
two or more information systems without any human intervention.3)
Based on the concept of EDI EDIFACT is the only international and interdisciplinary standard.4)
Different Workgroups are creating EDIFACT-subsets for use in different branches.
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