Advertisment

E-COMMERCE: Need for a Secure Environment

author-image
VoicenData Bureau
New Update

More

and more economies are realizing the potential of the opportunity presented by

online commerce, and governments are gearing themselves to harness it. India is

not lagging much behind, although its sheer geographical size and the population

post huge constraints. It has emerged as a country with one of the highest

growths in Internet usage.

Advertisment

The Boston Consulting group predicts that the growth of business-to-business

online purchasing in the US will rise from $1.2 trillion in 2000 to $4.8

trillion by 2004, accounting for nearly forty percent of the offline ordering.

The Gartner group predicts Rs 300 crore of business-to-business online

purchasing in India, by 2004. Online commerce not only provides a more efficient

and effective means of conducting business for corporates, irrespective of their

size, but also opens up new markets. True online commerce is not possible

without a proper online payment mechanism in place, as a true online purchase is

possible only when the buyer can pay online and the seller can receive those

payments online.

Globally, banks have realized this and are quickly deploying technologies to

serve their clients better. Some initiatives worth mentioning are that of

NETS-Singapore, which is a consortium of five different banks using shared

infrastructure for inter-bank switching and settlement through a Third Party

Service Provider (TSP), viz. Cash Card International. US initiatives worth

mentioning are First Data Corporation and Checkfree who provide third party

transaction services.

However, this is an area where our country has still to catch up, with only a

bunch of private banks providing or building up these facilities for their

clients. Given the Indian scenario of nationalized banks who are still

struggling to establish basic connectivity between their branches to provide

"anywhere, anytime banking", the very thought of commerce banking

looks like a far fetched idea.

Advertisment

In India, Global Tele-Systems Ltd. is providing third party processing and

switching services to the banks to enable them to conduct commerce banking.

Global Tele-Systems is establishing connectivity between various banks to

provide inter-bank fund transfer over the Internet for the bank’s clients.

For any such financial transactions to happen in an open network (i.e.

Internet), it is imperative to have a proper security mechanism in place. The

issues are different for the business-to-business (B2B) and business-to-consumer

(B2C) segments.

Providing Non-repudiation to E-payments

  • Integration of Checksum with the service
  • Smart Cards can be provided with a digital signature
  • Using Biometrics for the initiator

Advertisment

Typically, the payments in the B2C segment for online retail business are

carried out using credit/debit cards. The high charge backs that are pinching

the online merchants as well as the issuing bank mar the growth in B2C sales.

Charge back happens when a cardholder denies the sale. In absence of cyberlaws

and any proper mechanism to protect the online merchant and issuing bank,

virtual wallets become a very viable and safe method of protecting the merchants

as well as the customers. Virtual wallets typically work in an SSL/SET

environment to provide non-repudiation, confidentiality and integrity to online

B2C purchase. They also provide the customer better convenience by providing

auto form fill functionality.

The payments in the B2B segment are usually done through directly debiting

the bank account of the buyer. Here, typically, the web server of the corporate

is protected by firewalls (a software that protects the web server from

hacking). The data travelling between the payer and the banks through a payment

gateway is protected by encrypting and sending it over the Internet using SSL

(Secured Socket Layer — a standard accepted by VISA & MasterCard for

encrypting data).

For providing non-repudiation for the payments done electronically, various

methods can be deployed. Some popular ones are:

Advertisment

Checksum can be integrated with the service to protect the integrity of the

data that is exchanged. The moment anybody tries to alter the data or hack into

it, the checksum detects it and denies the transaction.

Providing smart cards with a digital signature for the initiation of a

transaction. The smart cards can act as a safe medium for storing the access

information and the digital certificate of the initiator. Every transaction done

by the initiator will then be signed using the digital signature stored on the

smart card. Thus, the initiator cannot deny the purchase later and the seller as

well as the banks involved in the transaction can be safeguarded.

A safer way of providing non repudiation is by using biometrics for the

initiator, but this technology is still in its infancy and very expensive.

Advertisment

We have a long way to go before we can achieve significant progress in the

arena of e-commerce, but, despite all the odds and constraints, the phenomenon

is picking up in the country. With the proper support of the banking industry,

the day is not far when India can also boast of a robust Internet economy.

Santosh D Khanolkar, general manager-consulting, e-commerce services, Global

Tele-systems

Who would your target customer be?

Advertisment

Our primary focus is the ISP customers, those of who have

an access PoP, those who may have a data centre, they may be content service

provider. Primarily it is going to be the service provider market. But

interestingly, we are seeing the enterprise making use of the application of

streaming media coming to the forefront. Customers like the financial

institutions who want to serve in a reliable and a high quality way through

streaming have shown keen interest. It’s because we can control the end point

of the content and end point of the subscriber edge. We can enable the

enterprises to serve the customers have a rich experience. So enterprises are

looking to that kind of a business.

In terms of geographical potential growth areas in APAC,

Korea, Australia, Japan, and China would be key. Personal Internet will pick up

where the concentration of Internet users pick up.

What is your estimate of revenues in Nortel’s earning

map?

Personal Internet revenues! Our business unit has plans to

achieve a billion dollars by the year end.

Ch. Srinivas Rao

Advertisment