1. BITS 2513: Internet Technology
Lecture 13: E-Commerce,
E-Banking & Advanced Internet
Technology Application
2. Learn how to…
• Define e-commerce.
• List the technological components
required for e-commerce.
• Define the payment models.
• Differentiate e-commerce solutions.
• Manage the development of an
e-commerce solution.
• List the issues with trading internationally.
4. What Is E-Commerce
• Electronic commerce (e-commerce) is the
integration of digital communications, data
management, and security capabilities
that allow organizations to exchange information
related to the sale of goods
and services. OR
• Buying and selling of information, products and
services via computer networks today and in the
future, using any one of the myriad of networks
that make up the Internet
6. Scenario
• A shopper browsers an online catalog and
places items desired into a virtual
shopping cart.
– Shoppers can add or take out items at any
time from their shopping cart.
• The shopper goes to the virtual checkout.
– The shopper decides on a delivery method.
– The shopper uses digital cash or e-cash
drawn from a digital wallet, a digital check,
or a regular credit card to pay for the
purchases.
7. E-Commerce Model
• Business-to-consumer (B2C) model is
when an end user buys something from
a company’s online storefront.
• Business-to-business (B2B) model is
when companies conduct business
electronically between themselves.
– B2B2C is used when a business buys from
a wholesaler to sell to a consumer.
8. E-Commerce Model
• C2B - Consumer to Business - a growing
arena where the consumer requests a specific
service from the business.
• C2C - Consumer to Consumer – these sites
are usually some form of an auction site. The
consumer lists items for sale with a commercial
auction site. Other consumers access the site
and place bids on the items.
9. E-Commerce Model
• Business to government (B2G) –
involves electronic interaction between
business and a government body in the
form of electronic tendering and
procurement
• Government to consumer (G2C) –
ecommerce that involve transactions with
the government and consumer. Example,
speeding tickets and traffic fines may be
paid online
11. Critical Elements
• Communications
– A common digital language must be
understood.
• Security
– Consumers need to feel confident in trading
online.
• Data Management
– Transactions must be stored in a way that can
be audited and recover if there are outages.
12. SET
• Secure Electronic Transactions (SET) is
an open standard for conducting secure
payment card transactions over the
Internet.
– SET uses encryption and digital certificates
from financial corporations.
– Merchants never see the customer’s credit
card number.
–.
13. SET
• Cardholder: an authorized holder of a payment
card (MasterCard, Visa, and so on) that has been
issued by an issuer.
• Merchant: a person or organization with goods or
services to sell to the cardholder – must have a
relationship with an acquirer.
• Issuer: This is a financial institution, such as a
bank, that provides the cardholder with the
payment card.
• Acquirer: This is a financial institution that
establishes an account with a merchant and
processes payment card authorizations and
payments.
• Payment Gateway: This is a function operated by
the acquirer or a designated third party that
processes merchant payment messages.
• Certification Authority (CA): This is an entity that
is trusted to issue X.509v3 public-key certificates
for cardholders, merchants, and payment
gateways
14. SET
• The customer opens an account.
• The customer receives a certificate.
• The customer places an order.
• The merchant is verified.
• The order and payment are sent.
• The merchant requests payment authorization.
• The merchant confirms the order.
• The merchant provides the goods or service.
• The merchant requests payment.
16. E-Banking
• Electronic banking is an umbrella term
for the process by which a customer may
perform banking transactions electronically
without visiting a brick-and-mortar
institution.
• The following terms all refer to one form or
another of electronic banking
– personal computer (PC) banking
– Internet banking
– virtual banking
– online banking
– home banking
– remote electronic banking.
17. E-Banking
• PC banking and Internet or online
banking are the most frequently used
designations.
• It should be noted, however, that the
terms used to describe the various
types of electronic banking are often
used interchangeably
18. Scenario
• Currently, only banking institutions
licensed under the Banking and Financial
Institutions Act 1989 and the Islamic
Banking Act 1983 are allowed to offer
Internet Banking services in Malaysia
19. FAST AND CONVIENIENT
• Internet Banking provides with a fast and
convenient way to undertake various banking
transactions from the comfort of your home,
office or wherever during and after banking
hours.
• Most banking institutions offer the service 24
hours a day, 7 days a week. You avoid traveling
time and the need to wait in queues to access
banking services or to pay bills
20. WHAT IS NEEDED TO DO
INTERNET BANKING ?
• Internet Banking does not require special
software or access to a private network, but is
conducted through the Internet.
• Computer with Internet access
• Internet browser
• Registered for an Internet Banking service with
banking institution,
• It is also recommended a personal firewall and
regularly update virus protection software.
21. BANKING SERVICES AVAILABLE
ONLINE
Some of the main services offered through Internet Banking:
• Check balances and statements online
• Submit applications for new accounts, credit cards or
loans online
• Place fixed deposits
• Transfer funds between accounts (own and third party)
• Pay bills, credit cards, loans and insurance premiums
• Create, change and cancel standing orders
• Request for cheque books and statements
• Check the status of your cheques
• Request for stop cheque payments
• Apply for Bank Drafts and Telegraphic Transfers
22. IS INTERNET BANKING SAFE?
• Actions taken by Banking Institutions to
ensure security before starting out on
Internet Banking
• Banking institutions have spent a lot of
time and effort to ensure that their Internet
Banking set up is safe for consumers.
• In addition, banking institutions offering
Internet Banking are also required to
comply with the minimum guidelines
issued by Bank Negara Malaysia.
23. IS INTERNET BANKING SAFE?
The safety measures taken by the banking institutions are:
• Regular tests of the system to ensure its reliability
• Provision of Internet security arrangements to ensure a
secure infrastructure
• Usage of a number of security technologies such as
encryption, firewalls, automatic log-off and monitoring
tools
• Installation of a system to detect and disable attacks
from hackers
• Undertake a periodic review every 6 months to assess
possible risks and detect possible weaknesses in the
banking institution’s risk management
24. Responsibility of E-Banking User
• Do not reveal Login ID and Password or PIN
• Check for the right and secure website
• Protect personal computer from hackers, viruses
and malicious programs
• Be careful when downloading software
• Do not leave computer unattended when logged
in and always remember to log-off
25. PRIVACY
• Responsibilities of banking institutions in
ensuring privacy
• Customers are advised to read the privacy
policy statement of the banking institutions
posted at their websites prior to providing
their personal information.
26. Mobile Banking
• Offers online banking on mobile phone.
• Service include, check account balance, pay bills and transfer
money
• Benefits
– Flexible, anywhere, anytime
– Easy and Simple
– Convenient
– Privacy - private access
• Requirements
– Mobile phone with GPRS or 3G access (Java & MIDP2.0).
– Registered with the bank institution
– Activated account
• Currently offers by M2U Mobile by Maybank
28. Enhancing Web Sites with
Multimedia
• Multimedia is any combination of text, graphics, video,
or sound.
• A Web site can provide multimedia information in one of
two ways: streaming or non-streaming data.
• Non-streaming data is data that is downloaded as a file
from the server to the browser.
• With streaming data, the browser receives the data in a
continuous stream.
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29. Protocols
• Streaming data uses UDP (User
Datagram Protocol) instead of TCP to
transmit data from the server to the client.
• UDP does not require a connection before
sending packets.
• Because UDP does not guarantee that
data is received, sometimes quality is not
29 high because packets can be lost.
30. Protocols (Cont’d)
• Another difficulty is that UDP packets sometimes
are not allowed through an intranet’s firewall.
• Streaming data sometimes uses RTP (Real-
Time Transport Protocol), which uses RTSP
(Real-Time Streaming Protocol) and HTTP.
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31. Internet Telephony
• Telephony is the technology of
telephones, and Internet telephony is the
technology of using the Internet to make
telephone calls.
• Today, several Internet telephony
implementations are available, including:
– PC-to-PC
– PC-to-phone
– Phone-to-phone
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32. Internet Telephony (Cont’d)
• On the Internet, data is divided into packets for
transmission across the network.
• Each packet might take a different route to reach
its destination.
• It’s up to the computer at the receiving end to
reassemble the packets into the original order
and maintain the continuity.
• A network that uses this approach is called a
packet-switching network.
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33. Internet Telephony (Cont’d)
• The public telephone network is a circuit-switching
network.
• The term full-duplex refers to such a transmission, in
which data travels in both directions.
• A transmission in which data travels in only one direction
at a time is called half-duplex.
• Because of this circuit-switching approach, the public
telephone network is called the Public Switched
Telephone Network (PSTN)
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35. First-Generation (Analog)
• Advanced Mobile Phone Service (AMPS)
• In North America, two 25-MHz bands allocated to
AMPS
• One for transmission from base to mobile unit
• One for transmission from mobile unit to base
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36. Differences Between 1G and
2G Systems
• Digital traffic channels – 1G systems are almost purely analog;
2G systems are digital
• Encryption – all 2G systems provide encryption to prevent
eavesdropping
• Error detection and correction – 2G digital traffic allows for
detection and correction, giving clear voice reception
• Channel access – 2G systems allow channels to be dynamically
shared by a number of users
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37. 2.5G
• It is a stepping stone between 2G and 3G cellular
wireless technologies
• The term is used to describe 2G-systems that have
implemented a packet switched domain in addition to the
circuit switched domain
• It does not necessarily provide faster services
• The term was invented for marketing purposes only
• Provides some of the benefits of 3G
– e.g. it is packet-switched and can use some of the
existing 2G infrastructure in GSM and CDMA
networks
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38. 3G
• Meet the growing demands in the number of subscribers (increase
in network capacity)
• Rates required for high speed data transfer and multimedia
applications
• Based on two parallel backbone infrastructures, one consisting of
circuit switched nodes, and one of packet oriented nodes
• Uses 5 MHz channel carrier width to deliver significantly higher data
rates and increased capacity
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39. 4G
• Infrastructure and the terminals will have almost all the standards from 2G
to 3G implemented
• The infrastructure will however only be packet based, all-IP
• The system will also serve as an open platform where the new innovations
can go with it
• Some of the standards which pave the way for 4G systems are WiMax,
WiBro, and the proposed 3GPP Long Term Evolution work-in progress
technologies such as HSOPA
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40. Wireless Standard
Comparison
Parameters 802.16a (WiMAX) 802.11 (WLAN) 802.15 (Bluetooth)
Frequency Band: 2-11GHz 2.4GHz 2.4GHz
Range ~31 miles ~100 meters ~10meters
Data transfer rate: 70 Mbps 11 Mbps - 55 Mbps 20Kbps - 55 Mbps
Number of users: Thousands Dozens Dozens
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