Business on the Internet
Fri, 01/11/2008 - 17:58 — Vlad
E-commerce (sometimes called web-based commerce)
is the term used to describe the activity of doing business on the Internet. It
includes business-to-business, business-to-consumer,
and even consumer-to-consumer transactions that involve the buying and selling
of goods
and services,
the transfer of funds, and even the exchange of ideas.
Business-to-business or “B2B” is a term commonly used to describe the transaction
of goods or services between businesses, as opposed to that between businesses
and other groups, such as transactions between business and individual
consumers (B2C) or business to public administration (B2G)
transactions. It is a term that originated and is almost exclusively used in electronic
commerce and usually takes the form of automated processes between
trading partners. It is typically performed in much higher volumes than
(B2C) applications.
A business web site must be secure if it is going to handle
financial transactions. A standard option is SSL (Secure Sockets Layer) using
public key encryption, one of the strongest encryption methods
available.
SSL ensures that private
information—such as passwords, credit card numbers, and
customer profile data—is secure and encrypted as it is transmitted. Consumers
will know they are using secure sites when they see closed padlock icons on the
status bars of their web browsers. Another security protocol is called SET
(Secure Electronic Transactions).
Secure Electronic
Transaction (SET)
is a standard protocol for securing credit card transactions over insecure
networks, specifically, the Internet. SET is not itself a payment system, but
rather a set of security protocols and formats that enables users to employ the
existing credit card payment infrastructure on an open network
in a secure fashion. SET was developed by VISA and MasterCard (involving
other companies such as GTE, IBM, Microsoft, Netscape, RSA and VeriSign)
starting in 1996. SET is based on X.509 certificates with several extensions.
SET uses a blinding algorithm that, in effect, lets merchants substitute a
certificate for a user's credit-card number. This allows traders to credit
funds from clients' credit cards without the need of the credit card numbers.
SET makes use of cryptographic techniques such as digital
certificates and public key cryptography to allow parties to identify
themselves to each other and exchange information securely.
SET was heavily publicized in the late 1990's as the credit card
approved standard, but failed to win market share. Reasons for this
include:
• Network effect - need to install client software (an e wallet).
• Cost and complexity for merchants
to offer support and comparatively low cost and simplicity of the existing,
adequate SSL based alternative.
• Client-side certificate distribution logistics.
SET was said to become the de facto standard of payment method on the Internet between the merchants, the buyers, and the credit-card companies. When SET is used, the merchant itself never has to know the credit-card numbers being sent from the buyer, which provide a benefit for e-commerce.
Shopping Carts.
The electronic shopping cart is a popular feature that allows consumers
simply to click on a button to select one or more products for purchase. When
the customer has finished shopping, the cart system allows the consumer to
"check out." Various payment options exist to facilitate business-to-consumer
e-commerce. These include digital or electronic cash, electronic
wallets, and micropayments.
Electronic cash (also known as electronic money, electronic currency, digital money, digital cash or digital currency) refers to money or scrip which is exchanged only electronically. Typically, this involves use of computer networks, the internet and digital stored value systems. Electronic Funds Transfer (EFT) and direct deposit are examples of electronic money. Also, it is a collective term for financial cryptography and technologies enabling it.
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