1. Introduction, IT and business, E-commerce: Concepts Electronic Communication, Internet and intranets. 2. EDI to E-commerce. Concerns for E-commerce Growth, Technical issues, Security issues. 3. Security Technologies: Cryptography, Public Key Algorithms, Private Key Algorithms, Hashing techniques, Cryptographic Applications, Encryption, Digital Signature. 4. Protocols for Transactions. SSL-Secure Socket Layer, SET-Secure Electronic Transaction. Cyber Cash, Dig cash.

1. E – Commerce
•By: Prof. Ganesh Ingle

2. 2
Course Outline
Overview of e-commerce
The Internet and the WWW
E-commerce software building blocks and tools
Scalability, high-performance servers, web
caching
Basic cryptography
Security, watermarking, firewalls
Payment systems
Current and future directions

3. 3
Electronic Commerce (E-Commerce)
Commerce refers to all the activities the
purchase and sales of goods or services.
Marketing, sales, payment, fulfillment,
customer service
Electronic commerce is doing commerce
with the use of computers, networks and
commerce-enabled software (more than
just online shopping)

4. 4
Brief History
 1970s: Electronic Funds Transfer (EFT)
 Used by the banking industry to exchange account information over
secured networks
 Late 1970s and early 1980s: Electronic Data Interchange (EDI) for
e-commerce within companies
 Used by businesses to transmit data from one business to another
 1990s: the World Wide Web on the Internet provides easy-to-use
technology for information publishing and dissemination
 Cheaper to do business (economies of scale)
 Enable diverse business activities (economies of scope)

5. 5
E-commerce applications
Supply chain management
Video on demand
Remote banking
Procurement and purchasing
Online marketing and advertisement
Home shopping
Auctions

6. Ecommerce infrastructure
6
Information superhighway infrastructure
Internet, LAN, WAN, routers, etc.
telecom, cable TV, wireless, etc.
Messaging and information distribution
infrastructure
HTML, XML, e-mail, HTTP, etc.
Common business infrastructure
Security, authentication, electronic payment,
directories, catalogs, etc.

7. The Main Elements of E-commerce
7
 Consumer shopping on the Web, called B2C (business to
consumer)
 Transactions conducted between businesses on the
Web, call B2B (business to business)
 Transactions and business processes that support selling
and purchasing activities on the Web
Supplier, inventory, distribution, payment
management
Financial management, purchasing products and
information

8. Advantages of Electronic Commerce
8
Increased sales
Reach narrow market segments in geographically
dispersed locations
Create virtual communities
Decreased costs
Handling of sales inquiries
Providing price quotes
Determining product availability
Being in the space

9. 9
Disadvantages of Electronic Commerce
Loss of ability to inspect products from
remote locations
Rapid developing pace of underlying
technologies
Difficult to calculate return on
investment
Cultural and legal impediments

10. The process of e-commerce
10
1. Attract customers
 Advertising, marketing
2. Interact with customers
 Catalog, negotiation
3. Handle and manage orders
 Order capture
 Payment
 Transaction
 Fulfillment (physical good, service good, digital good)
4. React to customer inquiries
 Customer service
 Order tracking

11. Web-based E-commerce Architecture
11
•Client
•Tier 1
•Web Server
•Tier 3•Tier 2 •Tier N
•Application
Server
•Database
Server
DMS

12. 12
E-commerce Technologies
 Internet
 Mobile technologies
 Web architecture
 Component programming
 Data exchange
 Multimedia
 Search engines
 Data mining
 Intelligent agents
 Access security
 Cryptographic security
 Watermarking
 Payment systems

13. Infrastructure for E-commerce
13
 The Internet
 system of interconnected networks that spans the globe
 routers, TCP/IP, firewalls, network infrastructure, network
protocols
 The World Wide Web (WWW)
 part of the Internet and allows users to share information
with an easy-to-use interface
 Web browsers, web servers, HTTP, HTML, XML
 Web architecture
 Client/server model
 N-tier architecture; e.g., web servers, application servers,
database servers, scalability

14. 14
Internet vs Intranet

15. Types of e-commerce
15

16. Types of e-commerce
16

17. Types of e-commerce
 B2B: E-commerce that is conducted between businesses is referred to as Business-to-
business
 (1) open to the entire public or (2) limited to a group of businesses who have
been part of the specific group
 Transaction cost reduced through reduction in
 search costs
 costs of processing transactions (e.g. invoices, purchase orders and
payment schemes)
 cost in trading processes
 eliminating intermediaries and distributors
 increase in price transparency
 creates supply-side cost-based economies of scale
17

18. Types of e-commerce..contd…
 B2C Commerce
 commerce between companies and consumers
 involves customers gathering information; purchasing physical goods or
information goods
 online retailing companies such as Amazon.com, Drugstore.com, Beyond.com,
Flipkart.com, Lenskart.com
 reduces transactions costs
 increasing consumer access to information
 reduces market entry barriers
18

19. ..Contd…
 B2G e-commerce
 commerce between companies and the public sector
 use of the Internet for public procurement
 licensing procedures
19

20. ..Contd…
 C2C e-commerce
 commerce between private individuals or consumers
 online auctions
 auctions facilitated at a portal, such as eBay, which allows online real-time bidding on
items being sold in the Web;
 peer-to-peer systems, such as the Napster model (a protocol for sharing files between
users used by chat forums similar to IRC) and other file exchange and later money
exchange models; and
 classified ads at portal sites such as Excite Classifieds and eWanted (an inter- active,
online marketplace where buyers and sellers can negotiate and which features “Buyer
Leads & Want Ads”).
 Consumer-to-business (C2B) transactions involve reverse auctions, which empower the
consumer to drive transactions. A concrete example of this when competing airlines
gives a traveler best travel and ticket offers in response to the traveler’s post that she
wants to fly from New York to San Francisco.
 There is little information on the relative size of global C2C e-commerce. However, C2C
figures of popular C2C sites such as eBay and Napster indicate that this market is quite
large. These sites produce millions of dollars in sales every day
20

21. M-Commerce
 buying and selling of goods and services through wireless technology
 handheld devices such as cellular telephones and personal digital assistants
(PDAs) are used
 m-commerce will become the choice for digital commerce transactions
 bill payment and account reviews can all be conducted from the handheld
devices
 consumers are given the ability to place and pay for orders on-the-fly
 delivery of entertainment, financial news, sports figures and traffic updates to a
single mobile
 different server than that accessed by the regular online users
 allow users to book and cancel rail, flight, movie tickets through their mobile
devices
21

22. M-Commerce..contd..
 critical considerations for this strategy is the software solution that the organization
uses
 ‘all in one’ device strategy vs individual device based technology
 banks can use cost effective virtual distribution channel
 Financial inclusion
 Greater reach across the population
 convenience without compromising security
 benefits are in terms of usage, reach, cost of installation, efforts and money for
maintenance, upgradeability and sustainability
22

23. M commerce..contd..
 address the needs of all the players (including regulatory requirements)
 solution is adopted that can be deployed fast, and can be scalable
 care of disparate systems, customized solutions and maintenance cost
 a platform that easily integrates new services and allows banks to be flexible
 allowing the bank to reap benefits from the full potential of the mobile commerce
 M commerce strategy requires a clear vision and objectives and not ‘one size fits all’
approach
23

24. Factors affecting e-commerce
 Major forces fuelling e-commerce
 Economic forces,
 Marketing and customer interaction forces, and Technology
 Communications costs,
 Low-cost technological infrastructure,
 Speedier and more economic electronic transactions with suppliers,
 Lower global information sharing and advertising costs, and cheaper customer
service cost
 Networking of corporations, suppliers, customers/clients, and independent
contractors into one community
 Networking of the various departments within a corporation, and of business
operations and processes
24

25. Factors affecting e-commerce..contd..
 Critical business information to be stored in a digital form retrieved instantly
transmitted electronically
 Connecting businesses (small, medium or large) to trading partners
 Sourcing out supplies, buying and selling goods and services online in real time
 Center for management of content and the processing of business transactions
support services such as financial clearance and information services
25

26. Factors affecting e-commerce..contd..
 Provide their target consumers with more detailed product and service information
using e-commerce
 Logistical and technological infrastructure to other retailers
 Expertise in credit analysis
 Tracking orders
 Product comparison systems
 Digitizing content, compression and the promotion of open systems technology
 Convergence of telephone services, television broadcast, cable television, and Interne
access
26

27. E-commerce components
 A corporate Web site with e-commerce capabilities
 A corporate intranet so that orders are processed in an efficient manner
 IT-literate employees to manage the information flows and maintain the e-commerce
system
 Banking institutions that offer transaction clearing services
 National and international logistics
 cost-efficient transport of small and big packages
 critical mass of the population with access to the Internet and disposable income
 Firms/Businesses with order fulfilling capability
27

28. E-commerce components..contd..
 A legal framework governing e-commerce transactions
 Legal institutions that would enforce the legal framework
 A robust and reliable Internet infrastructure;
 A pricing structure that doesn’t penalize consumers for spending time on and buying
goods over the Internet
 global collection of networks connected to share information
 common set of protocols
28

29. E-commerce components
 Important component of e-commerce based firm is the website
 website should have technology that will make it easier for its customers to
navigate
 site should offer every single feature necessary
 fully-functional and sustainable ecommerce web site
 stable server for hosting
 provide customer specific services
 technology partners who constantly upgrade the features as well as technology
 help business partners such as logistics partners and suppliers to share and
exchange business data
 Alternatively SaaS can be used for running these services (reduce cost)
29

30. Business transformation through e-commerce
 Linking stakeholders through e-commerce
 Supply chain management integration
 The product flow
 The information flow
 The finances flow
 Shared data in diverse database systems, data warehouse
 Sharing data “upstream” (with a company’s suppliers) and “downstream” (with a
company’s clients)
 shared digital business infrastructure
 including integrated value chains
 e-business management model
 business policies consistent with e-commerce laws, teleworking/virtual work,
distance learning, incentive schemes
30

31. E-COMMERCE APPLICATIONS: ISSUES AND PROSPECTS
 e-banking, e-tailing and online publishing/online retailing
 telephone banking, credit cards, ATMs
 E-commerce in developing countries
 Cash-on-delivery
 Bank payments
 electronic payment system
 Security issues in e-payment
 Factors the growth of e-banking in developing countries
 access to the Internet
 Inclination for banking over the internet
 access to high-quality products
 Security over internet
31

32. E-Commerce Software
32
 Content Transport
 pull, push, web-caching, MIME
 Server Components
 CGI, server-side scripting
 Programming Clients
 Sessions and Cookies
 Object Technology
 CORBA, COM, Java Beans/RMI
 Visual Studio .NET 2005 (ORCAS, ASP.NET, … etc)
 Technology of Fulfillment of Digital Goods
 Secure and fail-safe delivery, rights management

33. System Design Issues
33
Good architectural properties
Functional separation
Performance (load balancing, web caching)
Secure
Reliable
Available
Scalable

34. 34
Cryptography
 Keeping secrets
 Privacy: interceptor cannot use information
 Authentication: sender’s identity cannot be forged
 Integrity: data cannot be altered
 Non-repudiation: sender cannot deny sending
 How to evaluate cryptography
 Secret key (symmetric) cryptography; e.g., DES
 Public key (asymmetric) cryptosystems; e.g, RSA
 Digital signatures, digital certificates
 Key management; e.g., PKI

35. Public-Key Cryptography
35
Encrypting and decrypting a message using public-key
cryptography.

36. Basic terminology
1. Plaintext: original message to be encrypted
2. Ciphertext: the encrypted message
3. Enciphering or encryption: the process of
converting plaintext into ciphertext
4. Encryption algorithm: performs encryption
5. Two inputs: a plaintext and a secret key

37. Symmetric Cipher Model

38. Deciphering or decryption: recovering plaintext from
ciphertext
Decryption algorithm: performs decryption
Two inputs: ciphertext and secret key
Secret key: same key used for encryption and
decryption. Also referred to as a symmetric key
Symmetric Cipher Model

39. Cipher or cryptographic system :
A scheme for encryption and decryption
Cryptography:
Science of studying ciphers
Cryptanalysis:
Science of studying attacks against
cryptographic systems
Cryptology: cryptography + cryptanalysis
Symmetric Cipher Model

40. Ciphers
Symmetric cipher: same key used for
encryption and decryption
Block cipher: encrypts a block of plaintext at a
time (typically 64 or 128 bits)
Stream cipher: encrypts data one bit or one
byte at a time
Asymmetric cipher: different keys used
for encryption and decryption

41. Security
41
 Concerns about security
 Client security issues
 Server security issues
 Security policy, risk assessment
 Authentication methods
 Something you know: passwords
 Something you have: smart card
 Something you are: biometrics
 Firewalls, proxy servers, intrusion detection
 Denial of service (DOS) attacks, viruses, worms

42. 42
Payment Systems
 Role of payment
 Cash
 properties: wide accept, convenient, anonymity, un-
traceability, no buyer transaction cost
 Online credit card payment, Smart Cards
 Secure protocols: SSL, SET
 Internet payment systems
 Electronic cash, digital wallets
 Micro-payments
 Wireless devices

43. Transactions Processing
43
Transactions and e-commerce
Overview of transaction processing
Transaction processing in e-commerce
Keeping business records, audit, backup
High-availability systems
Replication and scaling
Implementation

44. 44
Other System Components
Taxes
Shipping and handling
Search engines
Data mining
Intelligent agents
Inventory management, enterprise
resource planning (ERP)
Customer relation management (CRM)

45. 45
• SSL was first developed by Netscape in 1994 and became an
internet standard in 1996 ( RFC 2246 – TLS V1.0)
• SSL is a cryptographic protocol to secure network across a
connection-oriented layer
• Any program using TCP can be modified to use SSL connection
• SSL connection uses a dedicated TCP/IP socket(e.g. port 443
for https)
• SSL is flexible in choice of which symmetric encryption,
message digest, and authentication can be used
• SSL provides built in data compression
Encryption and its types SSL Facts

46. 46
SSL Usage
• Authenticate the server to the client
• Allow the client and server to select cryptographic
algorithms, or ciphers, that they both support
• Optionally authenticate the client to the server
• Use public key encryption techniques to generate
shared secret
• Establish an encrypted SSL connection

47. 47
SSL
 SSL is a secure protocol which runs above TCP/IP
and allows users to encrypt data and authenticate
servers/vendors identity securely
46
Application
layer
Transport
layerTCP/IP layer
SMTPSFTPSHTTPS
SECURE SOCKET LAYER

48. 48
SSL
48

49. 4949
SSL Record Protocol Operation

50. 5050
Digital Signature

51. 5151
Digital Signature

52. 5252
Cyber Cash

53. 5353
Digital Cash

54. 5454
Digital Cash

55. 5555
SSL vs SET

56. 5656
Hashing
Hashing is an algorithm that calculates a fixed-size bit string value
from a file. A file basically contains blocks of data. Hashing
transforms this data into a far shorter fixed-length value or key
which represents the original string. The hash value can be
considered the distilled summary of everything within that file.
A good hashing algorithm would exhibit a property called the
avalanche effect, where the resulting hash output would change
significantly or entirely even when a single bit or byte of data within
a file is changed. A hash function that does not do this is
considered to have poor randomization, which would be easy to
break by hackers.

57. 5757
Hashing
A hash is usually a hexadecimal string of several characters.
Hashing is also a unidirectional process so you can never work
backwards to get back the original data.
A good hash algorithm should be complex enough such that it
does not produce the same hash value from two different inputs. If
it does, this is known as a hash collision. A hash algorithm can
only be considered good and acceptable if it can offer a very low
chance of collision.
Types of Hashing
There are many different types of hash algorithms such as
RipeMD, Tiger, xxhash and more, but the most common type of
hashing used for file integrity checks are MD5, SHA-2 and CRC32.

58. 5858
Hashing Techniques

59. 5959
Hashing Techniques

60. 6060
Thank you