Precautions for Security

There are numerous threats to the security of e-Commerce from the customer’s side as well as the vendor’s side. The following steps are usually taken to ensure security in online transactions.

1. Passwords

In online shopping, one has to register with the online vendor to have an account with him. This provides for a password to avoid login by an unauthorised person.

2. Authentication

Sender of the message must be identified precisely using the offline validation, if necessary. This avoids any possibility of fraud or misuse of the password.

3. Encryption

It refers to the conversion of data into a code so that it cannot be read by other users. The data is converted into the code by the sender and then decoded by the receiver. For this purpose, they use an encryption algorithm and binary numbers. The other alternative is the private (secret) key system.

4. Digital Signatures

A digital signature may be used to authenticate the sender of the message and check the integrity of the message so that no alteration takes place in transit. In terms of transmission, authentication and integrity, the digital signature is considered very secure provided it is created in a manner or by using a means under the exclusive control of the person using it.

5. Trusted Third Parties

Another way to ensure security is to transmit a copy of the transaction to a third party trusted by both sides and where the record of the transaction could be used to settle any dispute.

However, the provision of encryption, digital signatures and trusted third parties cannot provide full proof security against the use of stolen credit cards or the setting up of fraudulent web site by a bogus trader. Hence, the parties have to be highly vigilant and take all possible precautions to ensure security in e-Commerce dealings, whatever may be the cost.

Security and Safety of e-transaction: e-business Risks

Risks are involved in online transactions. There can be financial, reputational or physiological losses to the parties in online transactions. Various types of e-business risks are:

1. Transaction Risks

Transaction risks can be of the following types:

  1. Default on order giving or taking: Seller denies that the order was placed or customer denies that he ever placed the order.
  2. Default on delivery: The intended delivery does not take place; goods are delivered at wrong address or goods other than ordered may be delivered.
  3. Default on payment: The customer claims that the payment was made and the seller does not receive the payment of the goods supplied.

To avoid the above defaults, following measures can be used:

  1. The identity and location of the customer may be verified at the time of registration.
  2. Seller can verify the 'cookies' to confirm whether the customer has correctly entered his details in the registration form. Cookies are like caller ID in Telephones that provide important information about customers to the telemarketers.
  3. Customers must shop from well established shopping sites.

2. Data Storage and Transmission Risk

People may steal or distort the data for selfish motives or for fun. VIRUS (Vital Information Under Siege) and Hacking are the methods used for distorting data. Antivirus programmes should be installed from time to time.

Cryptography is used to prevent interception of data in the course of transmission. Cryptography is the act of protecting information by transforming into an unreadable format called 'hyper text'. Only those who possess a secret key can decipher the message into 'plain text'.

3. Risks to Intellectual Property and Privacy

Anyone can copy the data available in the internet and supply it to others. Junk materials formed as a result of dumping advertisement materials can be a great problem.