Page 86 - DCAP306_DCAP511_E-COMMERCE_AND_E-BUSINESS

Unit 6: Security Framework

Consumers can make online transactions by installing software on their computers. The cash
withdrawn or the payment made online is stored in the computer’s hard disk in an electronic wallet.
Consumers can use the cash stored in the electronic wallet to make any purchases from the online
shopping Web sites that accept e-cash. E-cash is also useful for transferring cash between two entities.

NEFT transfer is a best example for transfer of cash between two entities using e-
cash.
When a consumer enters a shopping site, the products for sale are displayed on the Web page. Once, the
products are identified, the consumer sends a request for e-cash to the bank server where the consumer
has an account. The bank server sends the e-cash stored in the electronic wallet. After obtaining the e-
cash from the computer, the consumer sends a purchase order to the online merchant’s server with the
quantity of the purchase, e-cash required for purchase, and the billing address. The online merchant
then sends a purchase receipt to the consumer and transfers the e-cash to the bank server where the
merchant has an account.
The online merchant’s bank sends the purchased e-cash packet amount to the consumer’s bank. The
consumer’s bank, after verifying the consumer’s public key with the received e-cash packet, releases the
purchase cash to the merchant’s bank. The merchant sends the product for delivery to the mentioned
shipping address.
Since all the transactions are carried over the insecure network, security becomes an important concern.
Security of the transaction information can be maintained by using encryption, decryption, digital
signatures, and password techniques.
While carrying out transactions a consumer can opt for privacy of disclosure of identity. Thus, the
online merchant will not be aware of the consumer’s identity.
6.3.1 Elements in Electronic Cash Flow
The various elements necessary for using e-cash in online transactions are:
1. Client Software: Software provided from various vendors run on windows XP, 2007, Macintosh,
and UNIX. Whereas, some Web sites just require normal Web browsers for reading and sending
encrypted information.
2. Merchant Server Software: Some merchants prefer custom application software for their Web sites
whereas, others use Web servers. Some applications require Netscape Commerce server whereas,
others provide free software library.
3. Payment by Consumer: The consumer can make transactions through credit cards, use e-cash
through bank, or use Automated Clearing House (ACH).
4. Payment to Merchant: When the transactions are made through a debit card, the merchant gets
the cash immediately from the consumer’s bank, ACH, or if the bank transfers the money, it
happens within a day. If the transactions are made through a credit card, then the merchant gets
money through bank transfer.
5. Transaction Cost: Every transaction made by the consumer is charged and this charge varies
depending on the type of the transactions made - credit or debit. Some service providers charge
per transaction while others charge a percentage amount for the transaction.
6. Risk: There is certain amount of risk associated with the transactions. The consumer is at loss if
there is a disputed transaction or if the merchant does not deliver the purchased products. In
addition, if the consumer loses e-cash, the bank asks for serial numbers of the e-cash to make a
refund. If no details are provided by the consumer, then the bank does not refund the cash.
7. Applications: E-cash applications involve debit cards, telescoping, public transit systems, phone
cards, parking systems, tele-banking and automatic toll collection.

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