SEM VI

MODULE I

Q1)EXPLAIN THE FEATURES OF E COMMERCE

Q2)ADVANTAGES, DISADVANTAGES OF E COMMERCE AND TYPES OF E COMMERCE

Q3)EXPALIN ANY FOUR REVENUE MODELS IN E COMMERCE

Q4)EXPLAIN VARIOUS SECURITY ISSUES RELATED TO E COMMERCE

Q5)EXPLAIN ENCRYPTION AND DECRYPTION

Q6)EXPLAIN VARIOUS PAYMENT SYSTEMS AVAILABLE IN E COMMERCE

Q7)WRITE SHORT NOTES ON

a)SYMMETRIC KEY ENCRYPTION

b)PUBLIC KEY ENCRYPTION

C)PUBLIC KEY ENCRYPTION USING DIGITAL SIGNATURES

d)SECURE SOCKET LAYER

Q1)Electronic Commerce is a general concept covering any form of business transaction or

information exchange exercised and executed using communication technologies

ELECTRONIC DATA INTERCHANGE: It is a standardised system for coding trade transactions so that
they can be communicated directly from one computer system to another without the need of
printed orders and invoices.

A fairly broad definition of Ecommerce is the process of doing business electronically. It involves the
automation of variety of business to business and business to consumer transaction through reliable
and secure connections.

FEATURES OF E COMMERCE:

UBIQUITY: Ubiquity means found everywhere. With E Commerce it is possible to shop from desktop,
home, phone traveling. There’s no need to visit market physically

GLOBAL REACH: E Commerce technology permits commercial transactions to cross the national
boundaries and it can reach to any corner of the globe.

UNIVERSAL STANDARDS: One unusual feature of E commerce is that the technical standards of the
internet are Universal Standards – they are shared by all the nations around the world.

RICHNESS: It refers to the richness in providing information to the consumer. Information about a
product is provided to the consumer using an audio or a video.

INTERACTIVITY: E Commerce allows two way communications between merchant and consumer.
Communication can be through Email or online Chatting etc.

INFORMATION DENSITY: Internet is making information more useful than ever. Information becomes
more plentiful, less expensive and of higher quality.
PERSONALISATION: Merchants can target their marketing messages to specific individuals by
adjusting the messages to a person’s name, interest and past purchases.

SOCIAL NETWORKING: Merchant can allow the user to create and share contents in the form of text,
videos, music or photos with worldwide community. Using these forms of communication, users are
able to create new social networks and strengthen existing ones.

Q2)ADVANTAGES OF E COMMERCE

● Overcome geographical limitations

● Gain new customers with search engine visibility
● Lower costs
● Locate the product quicker
● Eliminate travel time and cost
● Provide comparison shopping
● Enable deals, bargains, coupons and group buying
● Provide abundant buying
● Open all the time
● Create markets foe niche products

DISADVANTAGES OF E COMMERCE

● Lacks personal touch

● Delays goods
● Does not allow to experience the product, like shoe size, dress material etc
● Anyone can set up an E commerce website
● Security

TYPES OF E COMMERCE

BUSINESS TO BUSINESS(B2B) It is a form of E commerce in which products or services are sold from a
firm to another firm. It is performed in much higher volume. For example Intel selling micro
processors to Dell or Reebok selling shoes to Flipkart

Business to Consumer(B2C): It is a form of E commerce in which products or services are sold from a
firm directly to consumers. For example DELL selling laptop to me

CONSUMER TO CONSUMER(C2C) It is a form of Electronic commerce in which products or services

are sold from one consumer to another with the help of online market such as ebay.com, olx.in

PEER TO PEER(P2P) It is a form of E Commerce in which user can share files and computer services
directly without having to go through a central web server. For example if I share a music track with
my friend or my friend is sharing a video clip with me. Website examples BitTorrent.com,gnutella

Q3)BUSINESS MODELS
ADVERTING REVENUE: A website that offers its users contents, services and/ or products also
provide a forum for advertisements and receives fees from advertisers . Websites those are able to
attract the greatest viewership are able to charge higher advertising rates. Number of people visiting
a website is known as hits. Ex yahoo.com, google.com

SUBSCRIPTION REVENUE: A website that offers its users contents or services charges a subscription
fee for access to some or all of its offerings. They may charge monthly /annual subscription fee. The
contents offered by such site must be a high value added with premium offering. Examples
Consumerreports.org,Dalalstreet.com

TRANSACTION FEE REVENUE: A company receives a fee for executing a transaction. For example
ebay,sharekhan.com provides an online auction marketplace and receives a small transaction fee
from the seller if the seller is successful in selling the item.

SALES REVENUE: Companies derive revenue by selling goods, information or services to consumers .
The percentage of people visiting the site and buy something is called a conversion rate.Website
examples Amazon, Flipkart

AFFILIATE REVENUE: Sites that steer business to an affiliate receive a referral fee or percentage of
the revenue from any resulting sales. Website example Mypoints

MAJOR B2C MODELS

PORTAL: Portals offer users powerful web search tools as well as an integrated package of content
and services such as news,email, calendars, shopping, musicdownloads, videostraming and more.

Portals generate Revenue primarily by charging advertisers for ad placement, collecting referral fees
for steering customers to other sites and charging for premium services.

E-TAILER: It is an online retail store. Customer has to connect to the internet to check what is
available. With E Tailer and place an order. Some e-tailer are divisions of existing physical stores
whereas the others operate only in the virtual world.

The e-tailer revenue model is Sales Revenue model

CONTENT PROVIDER: Content providers distribute information contents, such as digital video, music
photos, text and artwork over the web. Content providers make money by charging a subscription
fee. The subscription fee can be monthly or yearly.

TRANSACTION BROKER: Sites that process transactions for consumers and earn revenue are called as
transaction broker.The largest industries using this model are financial services , travel services and
job placement services

TRANSACTION BROKERS MAKE MONEY EACH TIME A TRANSACTION OCCURS

MARKET CREATOR: Market creator build a digital environment in which buyers and sellers can meet,
display products and establish prices. They earn their revenue by charging for advertisement and
transaction fees

SERVICE PROVIDER: Service providers offer services online. Services offered are e-mail, photo
sharing video sharing and user generated contents. (blogs and social networking sites) are all
services provided to customers example google maps, gmail,orkut etc
They earn their revenue by charging for advertisement.

COMMUNITY PROVIDER: Community provider are sites that creates a digital online environment
where people with similar interests can transact (buy and sell goods) ; share intertests, photos and
videos, communicate with like minded people and receive interest related information .

They earn their revenue by charging for advertisement and affiliate revenue

Q4)SECURITY ISSUES RELATED TO E COMMERCE

Integrity: It refers to the ability to ensure that information being displayed on a website or
transmitted or received over the internet has not been changed in any way by an unauthorized party

NON DENIAL( NON REPUDIATION) : Non denial refers to ensure that e commerce participants do not
deny their online actions

AUTHENTICITY: Authenticity refers to the ability to identify the identity of a person or entity with
whom you are dealing on the internet.

CONFIDENTIALITY( SECRECY) : Confidentiality refers to the ability to ensure that messages and data
are available only to those who are authorized to view them

PRIVACY: Privacy refers to the ability to control the use of information a customer has provided
about him/her self. The information should not be misused.

AVAILABILITY: Refers to the ability to ensure that an E commerce site continues to function as
intended.

E COMMERCE SECURITY IS DESIGNED TO PROTECT THE ABOVE SIX DIMENSIONS . WHEN ANY ONE
OF THEM IS COMPROMISED THERE IS A SECURITY ISSUE

Q5) ENCRYPTION:

● To overcome some of the security issues faced by E commerce encryption is required.

● Encryption is a process of transforming plain text or data into cypher text
● Encryption is performed with the help of a key (cipher). A key (cipher) is any method for
transforming plain text to cypher text
● Cypher text means that it cannot be read by anyone other than sender or receiver
● Encryption offers Message Integrity- Non-Denial, Authentication, Confidentiality

DECRYPTION

● Decryption is the process of transforming cypher text into plain text or data
● Decryption is performed with the help of a key or cypher. A key is a method to transform
cypher text to plain text
● Without decryption the receiver cannot read the message
● Encryption key or Decryption key maybe the same (Symmetric) or it maybe
different( Asymmetric)
Q6 )Various Payment systems available in E commerce

Digital cash for this one has to open an account with paypal and deposit some amount in it.When
you make a payment using paypal you have to emailthe payment to merchant’s paypal account.
Issues with Paypal include high cost, fraud etc

Online stored value It isanother kind of stored value system based on credit card sized plastic cards
with embedded chips which store personal information. They cannot be used for home PC s but can
be used for ticketing and other smaller payments

Paypal For this one has to open an account with paypal and deposit some amount in it. When you
make a payment using paypal you have to email the payment to the merchant’s paypal account.
Paypal then transfers the amount from your account to the merchant.

But there are many issues , like highcost and lack of consumer protection

Smart cards It is another kind of stored value system based on credit card sized plastic cards with
embedded chips that store personal information that can be used to support e commerce payments.
They cant be used from home PC s to buy goods. They are generally small ticket items used by
swapping the smart card It also stores info regarding health insurance, personal identification, blood
group etc.

Smart card can hold 100 times more data than a credit card. It requires a password

Digital accumulating Balance payment These systems allow user to make micropayments and
purchases on the web, accumulating a credit balance for which they are billed at the end of the
month. Consumers are expected to the entire balance by cheque or credit card or cash. This is useful
for purchasing single music track, book, games,ringtones etc

Digital cheque payment system It is similar to normal cheque payment system of India.When a
consumer wants to pay by cheque at a merchant site that offers this service an online authorization
form appears that mimics the appearance of a paper cheque.

The user is prompted to fill in cheque information including a valid cheque number. Bank number
and bank account number. Digital cheque is not so successful in E commerce till today

IMPORTANT FOR OBJECTIVE TYPE TOO

7) a)SYMMETRIC KEY ENCRYPTION :

● In Symmetric key Encryption both the sender and Receiver use the same key to encrypt and
decrypt the message
● It is also known as secret key encryption
● Generally in computer symmetric key encryption is not used but asymmetric (public) key
encryption is used
b)PUBLIC KEY ENCRYPTION(Asymetric)

● In this method, two mathematically related digital keys: a receiver’s public key and receiver’s
private key.
● The private key is kept secret by the owner and the public key is widely circulated.
● Encryption is done by sender using receivers public key
● Decryption is done by receiver with the help of private key
● However, once a public key is used to encrypt a message that same key cannot be used to
decrypt a message
● Public key encryption takes care of message integrity and message confidentiality
● Public key encryption lacks authenticity, theres no guarantee that that the sender really is a
sender
C)PUBLIC KEY ENCRYPTION USING DIGITAL SIGNATURES

● To overcome the problem of authentication and non-denial faced by public key encryption,
the public key encryption is done using digital signature
● To check the confidentiality of a message and ensure it has not been altered in transit, a
hash function is also used first to create a message
● The sender then encrypts both the hash result and the original message using the receivers
public key to produce a single block of cypher text
● Digital signature is unique and and when it is used with hash function is even more unique.
Digital signature changes for every document
● Public key encryption using digital signatures takes care of the four security concerns i.e.
Message Integrity, Non-denial, Authentication and

d)SECURE SOCKET LAYER(SSL)

● The most common form of securing channels is through the secure Sockets layer of TCP/IP
● In SSL URL will change from HTTP to HTTPS
● A secure communication can be used only with HTTP and it cannot be used with non-HTTP
MESSAGES. Basically HTTPS tries to make HTTP more secure.
● Encryption is based on session key. Session key is unique and is different for each session.
● The SSL protocol provides data Encryption , server authentication, optional client
authentication and message integrity for TCP/IP connections.