Electronic Commerce

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Electronic Commerce

• Yong Choi
• School of Business
• CSU, Bakersfield

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Definition of EC

• Electronic commerce (EC) is an emerging concept
  that describes the buying and selling of
  products, services and information via and the
  Internet and computer networks (EDI).
• E-Business?

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EC vs. Traditional Commerce
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History of EC

• 1970s Electronic Funds Transfer (EFT)
• Used by the banking industry to exchange account
  information over secured networks
• Late 1970s and early 1980s Electronic Data
  Interchange (EDI) for e-commerce within companies
• Used by businesses to transmit data from one
  business to another
• 1990s the World Wide Web on the Internet
  provides easy-to-use technology for information
  publishing and dissemination
• Cheaper to do business (economies of scale)
• Enable diverse business activities (economies of
  scope)

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Why business is interested in EC?

• Not just save cost and increase productivity
• Paper check Vs. E-check
• Change the nature of competition
• Etrade.com / Amazon.com
• Create new businesses
• Citrix.com / Priceline.com

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Ecommerce infrastructure

• Information superhighway infrastructure
• Internet, LAN, WAN, routers, etc.
• telecom, cable TV, wireless, etc.
• Messaging and information distribution
  infrastructure
• HTML, XML, e-mail, HTTP, etc.
• Common business infrastructure
• Security, authentication, electronic payment,
  directories, catalogs, etc.

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E-COMMERCE BUSINESS MODELS
5-7
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Some examples

• B2B GM and suppliers (SCM)
• B2C Amazon
• C2B Priceline
• C2C ebay
• G2C Paying tax, Vehicle registration
• B2G Lockheed (prodcuts/services to DoD)

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Intranet

• A private version of the Internet
• Use TCP/IP
• A network that uses a Web Browser as a universal
  applications client and that is accessible only
  by individuals within a particular enterprise

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The Intranet (cont.)
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Extranet

• A collection of Intranets (known as extended
  Intranet)
• Also use TCP/IP
• A network that links business partners to one
  another over the Internet by tying together their
  corporate intranet

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The Extranet (cont.)
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E-Commerce Security

• Cryptography
• Encryption and decryption of information
• Secret Key (symmetric) Cryptography
• Public Key (asymmetric) Cryptography
• Digital Signature

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Cryptography

• Any information (such as order) in cyberspace
  must be delivered securely using cryptography
  technology.
• History of Cryptography
• Rewrite contents (encryption) so that they cannot
  be read without key
• Encrypting function Produces encrypted message
• Decrypting function Extracts original message
• Method
• Secret key Cryptography
• Public key Cryptography
• Digital signature

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Secret Key Cryptography

• Use a single key
• Key a set of random numbers to encrypt/decrypt
  information
• Known as symmetric encryption or private key
  encryption
• The same key is used by sender and receiver
• Easy to use, suitable when only two distinctive
  parties are involved
• Less secure (than public key cryptography), when
  many parties are involved

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Secret Key Cryptography (symmetric)
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Public Key Cryptography

• Use a pair of key (public and private)
• Known as asymmetric encryption
• The public key
• Known to all authorized users
• The private key
• Known only to keys owner
• Easy to use, more secure (than secret key
  cryptography), suitable when many parties are
  involved
• Requires sharing of both keys

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Public Key Cryptography Mechanism
Message
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Digital Signature

• Public key cryptography problem
• Receiver cannot ensure that a message is actually
  coming from sender.
• Husseins subordinate can send a fake message
  using Husseins email system - which looks
  originated from real Hussein - to Bush.

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Digital Signature

• Goal
• Guarantee that message must have originated with
  a certain entity (increase security)
• Idea
• Encrypt digital signature with private key
• Decrypt digital signature with public key
• Only owner of private key could have generated
  original signature

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Digital Signature
Digital Signature