Online Credit Card Payment example essay topic

As the evolution of the internet and purchasing online becomes popular, so do the security factors that contribute to the ways of eliminating fraud, theft, and acquiring personal information. E-commerce has created many new ways for customers to make payments including e-cash, e-cheque's, and e-wallets. In the 21st century, many organizations worked hard at securing communications and payments made through e-commerce transactions. In doing so, customers would be able to feel a sense of trust, confidence and assurance that their information is safe. Many technological developments are being tested and today even implemented through that very system, of e-payments. Already being used today are smart-cards and e-wallets, which in fact work well at creating a safeguard for customers information.

Customers now have the convenience of quick and more efficient ways of making transactions and saving data effortlessly with the click of a button. Authentication programs such as VeriSign Secure Site Program, allows one to learn more about web sites users visited before they submit any confidential information, in addition to permitting one to submit sensitive information like one's own credit card number. Such programs are being used on sites such as Ryerson's website, where students can make payments through the system where credit card information is used. Public key infrastructure and digital certificates help companies battle the wave of illegal activity and enhance the business models. Today many businesses are using firewalls as a way to add security to a network. Virtual Private Network allows users to gain secure access to its organizations network.

Companies that have used these technologies are paving the way for future security methods. Encryption and decryption are always used whenever secure sites are accessed so that users that enter information can not be accessed by unauthorized people. 56 bit used before and the 128-bit encryption is becoming the standard at the moment. Many companies who conduct business electronically have the responsibility of making sure that when payments are made over the Internet, accuracy and security become extremely critical.

The main concern with electronic payment is the level of security during each step of the transaction. For if there is the slightest possibility the payment system is not secure, trust and confidence in the system by online customers will begin to deteriorate. There are currently 4 major categories of electronic payments systems: (1) electronic cash, (2) online credit card payment, (3) electronic checks and (4) small payments. Each one of these payments has their advantages and limitations. E-cash is a more convenient and flexible way of handling payments than traditional money. It can be used by both, consumers and businesses.

Banks that issue E-cash could find it much cheaper than handling checks and the paper records that accompany traditional money. Consumers who do business on the Internet will find some forms of electronic money offer much greater privacy than using ordinary credit cards. Disadvantages associated with e-cash are that uncontrolled growth of E-cash systems could undermine bank and government-controlled money systems. E-cash may be less secure than bank money, since money stored on a PC could be lost forever if the system crashes. E-cash could foster a have and have-not society: Those with PCs would have ready access to the stuff, while those without, many of them low-income consumers, would not. The worse part of it all is that if hackers or other criminals were to break into e-cash systems, they could instantaneously extract the electronic wealth of thousands or even millions of innocent consumers.

Although online credit card payments require a high usage fee and they have a limit on how much one can spend, it is popular because of its acceptability in many foreign countries and also because it is a relatively safe method of payment. The risks associated with online credit card transactions is that neither party can be certain of the other's identity; and second, the goods ordered may take some time to be delivered. On delivery, the buyer may discover that the merchandise does not match his expectations. There is also a problem of fraud and a lack of security, which can lead to the compromise of credit card numbers stored in online databases. In the physical retail world, if credit card fraud occurs, the credit card companies cover the cost. But on Internet transactions, it's the E-trailer that must cover these costs.

There are two main ways to prevent credit card fraud. One is address verification, where the retailer compares the address of the credit card owner to that of the person who is attempting to use the card. If the addresses don't match up, the sale is rejected. The second way looks for fraudulent patterns based on the history of credit card purchases.

Year after year the internet is becoming a popular shopping spot, with an estimated $65 billion in sales for 2004. Merchants expect growth in cyder crime to keep pace with increase in Web sales. However, the growing availability of fraud-detection tools and services should help. For instance, merchants can use so-called geo locational tools that scan IP addresses to identify orders that are being placed from outside the country. Similarly, new card-verification methods that are available from all of the major credit card companies allow merchants to ensure that the person entering the card number actually has the card in his possession.

And fraud-detection services, which cost between 5 cents and $1 per transaction, let merchants automatically flag suspicious transactions. ' While e-commerce appears to be alive and kicking, the growth rate in the levels of fraud appear to be growing at the same rate as well,' Healy said. 'What we are seeing is about 3% to 4% of a retailer's bottom line being consumed by fraud. ' Since the direct costs of electronic checks are high, it can only be used in the virtual world. Electronic checks do not protect the users' privacy therefore this method is not suitable for consumers.

This payment method is usually used by governments and private corporations who don't find user privacy a concern. Also, since the money being transferred is usually a large sum, online credit card payments or e-cash are both unable to make such large transfers. So, therefore electronic checks are more suitable for governments and corporations. Small payments are offered to those who are not frequent users and are willing to pay a reasonable price to browse through information. Therefore pay-per-click and per-fee-links will definitely become an online trend for transactions. Small payment sare not brought forth by international financial organizations and it does not use traditional financial systems or methods as its structure.

The only way to increase consumer acceptability is to have cooperation with banks, Internet service providers, the telecommunications industry, websites and customer services. These industries provide servers or become suppliers by compiling bills, promoting system compatibility, and gaining the customers of these industries. Online Security Issues Ever since the Internet became popular in the mid-nineties, website security has become a serious issue. There have been many concerns about hackers and credit card fraud to name a few.

There are always ongoing issues that one must deal with as the internet is becoming necessity in our everyday lifestyle. At first, the emphasis online was on preventing a hacker from snooping on the connection between a user and a Web site. Now, with that problem largely solved, sites are being forced to examine more-subtle issues, like how seemingly harmless information given by a trusted customer can be used unacceptably. Web sites need to be careful with all of their information they store. Most Web sites use cookies, which are small text files stored on your computer containing information about the sites you visit. Well-designed cookies from Web sites with strong privacy policies are immensely useful.

For example, they allow you to return to your favorite sites without logging in every time you do. If a cookie system isn't designed properly, things can go wrong. Sensitive information can fall into the wrong hands. Websites can fix this problem by installing encryption software that check to see whether a cookie has been altered before responding to it.

"Marketing activities and the use of Internet 'cookies' also make e-mail users uneasy: 73 percent are concerned about companies keeping records on their Internet usage, and 71 percent are concerned about Internet" Hacking has reached crisis levels in the past few years-the average company is attacked 30 times a week. Most are not serious, however 15% percent-are successful intrusions. Encryption is the use of mathematical formula (an algorithm) that is applied to electronic data to render it illegible to anyone without the decoding key (Pugs ley & Tries, 12). It is used throughout various ap sects of e-business including e-mail, transmissions to execute transactions on the Internet, and other sensitive transmissions. The most common standard is the 56-bit encryption key, which is a standard feature of Netscape Navigator and Microsoft Explorer. The 56-bit DES system comprises of over 72 quadrillion (72 057 594 037 927 936) possible keys.

In 1997, a team led by Rock Verser, a freelance computer consultant, broke the 56-bit encryption code. It took about 18 quadrillion keys before the right one was found. The 56-bit encryption is still used today because most people do not have the capability of going through a long process of trying to decode the encrypted messages. However, because the code was broken this has led to the use of 128-bit technology for more sensitive transmissions. The 128-bit AES (advanced encryption standard) is an encryption standard that creates 3.4 x 1038 possible keys which makes it literally impossible to crack.

In fact, if a computer were programmed to find one key among all possible keys a 128-bit system can create, it would take 149 trillion years to crack (PR Newswire, 2003). For standard browsers, the 128-bit encryption can be downloaded from the websites of the browsers' manufacturers and added to the browsers thus making them capable of high-encryption transmissions. When customers use Internet banking, the banks in Canada require their customers to install the 128-bit encryption technology for their browser before they are granted any access. The 128-bit encryption is used by many big name companies such as Motorola who believe that this form of security is more secure than filtering, Wired Equivalent Protocol (WEP), Secure Sockets Layer (SSL) and Transport Layer Security (TLS) and Triple Data Encryption Standard (3 DES). The 128-bit AES has become a major selling point for Motorola because they do a lot of business with the US military. The use of Virtual Private Networks (VPN) has also paved a way into the world of e-commerce, and today is seen as a vital instrument towards gateway security.

The use of VPN's allows for a secure watch between corporate network boundaries and the Internet, providing a barrier of entry to hackers. Along with VPN's one may find the use of encryption in place. Although it is not always required with the use of VPN's, a VPN without the use of encryption only allows for limited security, while user authentication and tunneling is still in operation. VPN's over the Internet with encryption, encrypts all data that passes between a gateway and remote users, or between gateways itself. Firewalls alongside the use of VPN's also help with the insurance of security / payments through e-commerce. Firewalls support a wide-range of authentication schemes such as user names, passwords, and even online payments.

The insurance of fraud and theft identity is growing concern especially with online credit card fraud. With a firewall in place, an online payment transaction can be virtually protected from any leakage or openings to fraud. A firewall provides security by authenticating networks users, ensures the privacy and integrity of communications over insecure public networks such as the Internet. It also prevents viruses and other malicious attacks at the gateway and furthermore, notifies users if any foul intrusions are detected. Detailed login and accounting information is also noted to give notification on all the communication attempts within the system. As e-commerce continues to grow internet security and privacy becomes more and more of a challenge in the foreseeable future.

People are still concerned about giving their information online. Therefore it is up to the retailers to assure their customers that making a purchase online is safe and secure. The use of 56-bit and 128-bit encryption technology has definitely helped ease the minds of customers by offering them a sense of security. However, there is no that this security measure can prevent hackers from cracking the code if they really wanted to. In the future, there will be a greater dependence on the Internet than ever before, and not just for e-commerce, but also for control of critical infrastructure (power generation, communications, transportation, etc.

). While this will bring great efficiency, it also means that the downside of a severe attack on the Internet will be greater than ever..