장홍예Telecommunication Engineer Lab

2001.9.191

E-COMMERCE: TECHNICAL AND MARKET APPROACH

Contents Introduction E-Commerce types

End-point view Operation view

Security SSL Hardware-based solutions

An e-commerce solution Conclusion

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Introduction In the last few years the Internet has opened

its way through the commercial world, so the behavior of consumers has changed rapidly.

The financial transactions are now more and more on non near-bank operations.

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Introduction(cont.)

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The internet provides individuality, flexibility and time and place independence, which means a good advantage for both financial institutions and consumers. It helps financial institutes to reduce their costs and enlarge their market area easily by letting them: Offer different and complex kinds of products in the new

supply and demand relation. Offer services available for anyone in any place on earth

who has access to the Internet.

E-Commerce types

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E-Commerce: end-point view

Generally we can divide e-commerce into business-to-business and business-to-consumer modules. However the reports show that the first one is more dominant, because businesses are more like to sell and buy online.

E-Commerce types (cont.)

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B2B e-commerce will top $1.3 billion in 2003.

E-commerce has grown faster inside the U.S. than outside of it.

E-Commerce types (cont.)

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E-Commerce:operation view Billing Systems, which enables financial institutio

ns, generate bills to consumers. Electronic Payment, which enables consumers to

pay online for the services they receive both in hard and soft good (digital services) methods by using both credit card and cash (digital coin based money).

Security

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Requirements Both sides of the transaction should authenticate each othe

r. Due to the structure of the Internet as a distribution channe

l, data pass many nodes from its source to its target. So it is necessary for data to be unable to get accessed from any third party.

A digital signature is the most crucial point of concern, as it confirms who’s doing what besides being the last and most important approval as a green light to the transaction.

Security (cont.)

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Protocols HTTP-S HBCI (Home-Banking Communication Interface) SET (Secure Electronic Transaction) SSL (Secure Socket Layer)

Security (cont.)

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SSL The SSL protocol works above TCP/IP, which rules all the tr

ansport of data and routing in the Internet, and below higher-level protocols such as HTTP, LDAP or IMAP. TCP/IP is used by SSL on behalf of the higher-level protocols, which provides and encrypted connection by letting SSL-enabled servers and SSL-enabled clients authenticating each other consequently.

Security (cont.)

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Hardware-based solutions Using a chip located between the keyboard

and computer or using a smart card login (for windows 2000) are examples of hardware-based solution.

An e-commerce solution

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An e-commerce solution (cont.)

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The main advantages of this solution This system can transfer money to seller’s bank ac

count immediately unlike normal operation in Credit Card routine.

No body knows or not able to record customer’s account/Credit cards/ pin#. Only bank computer will get parameter from customers exclusively. It will protect payment protection from any frauds.

Conclusion

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The Internet influence in today’s commerce cannot be limited to those mentioned before, and there are different business models involving e-commerce such as: Billboard, Advertising sites, Subscription and Storefronts.

This dynamic environment has opened the way for e-market makers who offer e-commerce solutions.