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Paper Abstract: Examines the issue of payment systems for electronic commerce. Includes a discussion of electronic commerce, security concerns and pros and cons of various payment systems including PayPal. Also includes a table of contents. Paper Introduction: TABLE OF CONTENTSIntroduction Payments and Commerce in General Commercial Transactions and the rise of currency Checks Credit Cards Debit and Charge Cards Electronic Commerce Introduction Definition of Electronic Commerce Electronic Commerce and the World Economy Electronic Commerce and Business Strategy The Effects of Electronic Commerce Payment Systems Used in Electronic Commerce Electronic Wallets PayPal PayCash CheckFree BitPass YAGA Issues associated with Micropayments C IT Money TRansfers Security Issues Associated with Electronic Commerce Internet Privacy v Security Cookies Buyer Fraud Seller Fraud Phishing Text of the Paper: The entire text of the paper is shown below. However, the text is somewhat scrambled. We want to give you as much information as we possibly can about our papers and essays, but we cannot give them away for free. In the text below you will find that while disordered, many of the phrases are essentially intact. From this text you will be able to get a solid sense of the writing style, the concepts addressed, and the sources used in the research paper. Outside the United States, funds can be added by wire transfer,Western Union transfer or cashier's check. Biometrics offer significantpotential in the area of electronic commerce because it can be difficult toengage in fraud when biometric payment plans are in place. In some cases, victims are enticed into submitting the informationwith the promise of cash at the sites they visit. Credit cards, debitcards, electronic wallets and PayPal-like models have been developed toaddress these issues. The significance of 11 nations adopting asingle currency cannot be overemphasized. "Unions Seem a Small Threat to High Tech, at Least for Now." Electronic Business 27(Nov 2 ): 42.Harvey, Fiona. For many analysts, "electronic commerce" actually refers to theextension of electronic commerce and electronic business (e-commerce and e-business, respectively) which are based on using the Internet and relatedtechnologies for conducting transactions. Identrus is a banking industry initiative to become a global CA.Supported by the world's leading banks, Identrus has as its goal theelimination of some of these problems. Another concern is the problem ofpublic key integrity, where the public key being used has to be valid andbelong to the claimant rather than anyone else. While consumers are already used to paying for magazineor newspaper subscriptions, they are not used to paying for information onthe Web-at least not to the level that micropayments make possible.However, by using payment schemes that make it easy and cost-efficient tomake these small purchases, companies such as Yaga and BitPass may well beable to help merchants market in this area. Another consideration affecting international Internet usage is thesingle European currency (the euro). The PayPal model also demonstrates that consumers arewilling to embrace new payment forms so long as it meets a perceived needand is a significant improvement over existing payment options. Increasingly, the line between mobile phones and electronic paymentsis becoming blurred. Certificates are issued bycertificate authorities (CAs) which are trusted third parties such asEntrust. However, PayPal had more than31 million accounts registered at the end of the second quarter in 2 3,and processed more than $2.8 billion during that time. Certainly it islikely that credit card companies and other financial institutions will payincreased attention to PayPal's success. This is not strictly an electronic commercetransaction, but increasingly, payment systems are expanding the definitionof what constitutes online payments. As eBay gained acceptance as amarket for the masses, new payment schemes were necessary to handle themany individual sellers who did not have merchant credit card accounts, butwho did not necessarily want to take the risk associated with acceptingonly checks for payment. Creative Internet thieves can cause significant losses to Internetpayment systems, and most systems now have protections in place to helplimit losses. The hackers chose to convert the numbers into cashrather than goods by setting up multiple PayPal accounts and transferringfunds from one account to the other generating between $5 million and $1 million in lost revenue to PayPal. Because of the potentially large market, it is likely that these companieswill pursue this market opportunity (Simpson 23). "Cooperative Databases Gain Favor With Direct Marketers." B to B, 88(Feb 1 , 2 3): 2 .Martin, Zack. This state-of-the-artsolution establishes, in a hierarchical manner, a system to issue publickey certificates. This providedconfidentiality of information but has left authentication and data-integrity problems. Consumers fund BitPass accounts throughtheir bank accounts, and draw on the BitPass account to make their smallpurchases or download small bits of content from the Web. Conclusion In the short time that the Internet has been used for commercialtransactions, a number of different payment systems have emerged.Initially, these were based on traditional payment systems used in thebrick and mortar world, such as credit cards. In addition, the increasedconvenience now associated with such payments is also likely to help themgain wider acceptance and use. Issues associated with Micropayments Both Yaga and BitPass face the challenge of convincing consumers thatthey should pay for content which has largely been available at no cost onthe Web. With credit cards, merchants accept a particularcard-Visa or MasterCard, for example-as payment for the good in question,then receives payment from that credit card company after the companysubtracts a transaction fee. Inaddition, these scam artists typically only operate for several days,collect the funds, typically through PayPal or credit cards, and thenvanish. also targets content providers such as publishers, similarto BitPass, but instead of focusing on the consumer, Yaga focuses on thecontent providers. Retrieved from the Internet 19 Apr 2 4: http://www.cypermint.com/products_services/products_assets/PayCash%2 Wh ite%2 Paper%2 v2.pdf.Rupley, Sebastian. Debit and Charge Cards After credit cards came debit cards, which deduct money directly fromthe consumer's bank account, and charge cards-such as American Express-thatdo not extend credit but which do offer a longer period of time (usually 2 days) to pay for purchases. "The Role of Cryptography in Network Security." Business Communications Review 25(Sep 1995): 67-72.Mugan, Chris. PayPal has put several protections in place which help protectmerchants from the second type of buyer fraud. Mobile Payments Mobile payments are also likely to gain acceptance if they can gainentry into the market. The company has paid particular attention to preventing unwantedsecurity breaches outside the United States while working to meet therequirements of the Patriot Act and financial regulations inside the UnitedStates. Companies are finding that the Internet eliminates many of the limitsto scale which have traditionally plagued companies. Such operations are often basedoverseas and make use of fake American physical addresses-meaning addressesthat exist but at which the merchant does not have operations. Phishing is becoming both more common and more sophisticated and isincreasingly difficult for consumers to detect. When the user makes a purchase on the Web that requirespayment and on a site where the wallet can be used, the wallet can fill inthe forms necessary to complete the transaction. This installs a wallet on the computer associatedwith that user. Rather than paying in currency, consumerscould issue a bank draft-check-instructing the bank to pay a particularperson using funds that the consumer had already deposited. This key was used to encrypt data so thatretrieving the data was only possible with the secret key. Kroger grocery stores are experimenting with a fingerprint-basedpayment system that will be implemented in 2 stores by the end of 2 4.Most of these stores are in Texas and the Midwest. Payment Systems Used in Electronic Commerce Electronic Wallets Electronic wallets were among the first type of payment systemsintroduced to the Web, and they were an attempt to simplify the oftenlengthy process of using credit cards on the Web. The chargeback offer is used to give customers greaterprotection from unscrupulous merchants and can be an incentive to use acredit card over another type of payment when making purchases. The other issue is cross certification. However, consumers are required to transmit sensitiveinformation, including account numbers, over the Internet, which can raisesecurity problems (see the discussion of Internet security elsewhere).When CheckFree is used, only the bank knows the name and account numbersassociated with a particular transaction, and thus a potential securityproblem is avoided. The PayCash modelallows individuals in the United States, for example, to transfer funds toindividuals in Russia without using a financial institution such as a bank. This has considerable appeal sinceconsumers do not need to commit large amounts of money to the paymentservice, and merchants find this type of processing attractive since itopens up new payment options and increases the ways in which they can bepaid for their products. Providers can also indicate the number of timesthat customers can access the data, as well (Simpson 23). Justas a phone designed for Verizon is unlikely to work on the Sprint network,so mobile payments in the United States might encounter similar problems(Simpson 23). Despite thissignificant increase, the Internet continues to account for only 1.5percent of all sales in the economy, however ("Internet Sales" C6). The three objectives of PKI are that users conduct businesselectronically with the confidence that the person sending the transactionis actually the originator, that the person receiving the transaction isthe intended recipient and that data integrity has not been compromised(Moeller 27). Buyer Fraud There are two common types of buyer fraud on the Internet. Items included in the spending are software, servers, services,information appliances, PCs, network equipment, and Internet access.Revenues for Internet access are expected to grow at a compound annual rateof 33 percent between 1997 and 2 2 when they will exceed US$8 billion(McAuliffe 28). With a base of more than 22 million World Wide Web users at the endof 1998, e-commerce revenues were nearly US$3 billion, which is more thantriple the amount in 1997. Security continues to be a primary concern of merchants and buyersalike, and the industry as a whole has taken steps to address theseconcerns. Merchant fees in the United States are only two percent of thetransaction; they were originally three percent, but the company reducedthe fee when it was determined that chargebacks-a common problem withcredit card transactions-were not a significant problem for PayCash. The euro is being implemented at the same time asthe Internet is undergoing significant adoption throughout the world, andthe two events will inevitably affect each other. In 2 1, both Nokia and Ericsson began testingelectronic wallets integrated into their phones. Security remains a key issue for consumers, but the capabilities ofelectronic wallets is greatly expanding. Americanconsumers, for example, can now comparison shop for goods on the Internetand purchase items from across the country that they formerly would havepurchased down the street. "Payments: The Rush to Fill c2it's Void." Banking Wire 17(Feb 19, 2 4): 37-38.Smith, S. With internationaltrade, however, even in ancient times, problems arose with one currencydiffering in value from another-a problem that continues to this day.Currency can also be easily stolen, and since it is primarily an anonymousform of completing a transaction, there is no easy way to prove that aparticular piece of currency belongs to a particular person. Currently, CheckFree allows sellers to collect payments fromCheckFree accounts linked to their bank accounts. Since research reveals that consumers need to use this type ofsystem a minimum of three times before they are comfortable with it, Krogerhas also implemented a bonus for using the system five times. In both cases, itis necessary to have the security code in order to complete a transaction,and the security code is not stored on the phone itself. Specifically, CheckFree has createdmycheckfree.com, a system through which consumers can participate in onlineauctions, and the company has indicated that it will be addingmycheckfree.com to its bill payment banking sites. This technique is known as "phishing" (Salkever n.p.). Expansion of electroniccommerce in Europe will be facilitated by this common currency thatmeasures the cost of goods regardless of the country in which transactionsoccur. This meets theconfidentiality requirements of Russia, but software enhancements withinthe United States also make it possible to capture information required byAmerican authorities in the wake of the September 2 1 attacks. It is not more costly to reach the onemillionth customer than the seventh customer when using a Web site, and therevenue generated from the one millionth customer does not go to support alarger facility which, in traditional companies, would be necessary tosupport such a large operation ("Sales on the Internet" 11). These can be transferred from a bank account, PayPal, ortraditional payment forms such as personal check, money order, cashier'scheck or Western Union transfer. eBay, Amazon privacy policies under fire. There are specific problems that arise whenconducting business online, from verifying that the person making thepurchase has the authority to do so to ensuring that funds are transferredquickly and economically from the buyer to the seller. BitPass chargescontent providers 15 percent for transactions up to $5, and 5 percent plus5 cents for transactions over that amount. Conclusion Payment systems for electronic commerce are likely to continue to growin usage and acceptance as companies are able to demonstrate that they canprotect individuals' financial information. As the old century drew to a close, however, itbecame obvious that traditional commerce was not going to go away entirely. Several payment accounts could belinked to the device, biometric access could provide security, andconsumers would have access to the Web and ways to pay for content orproducts purchased on the Web all in a handheld device. An electronic wallet islittle more than a computer program that stores names and passwords as wellas credit card numbers and shipping information. Credit cards are also moreportable than checks since a single piece of plastic can be used formultiple transactions (Clark 4). Because traditional SSL only provides serverauthentication, its effectiveness is limited. The financial institutions alsooffered consumers the ability to exchange funds with one another throughCheckFree ("CheckFree Adds" 16). PayPal has not yetentered this market directly since it does not participate in the currencymarket, but there are some analysts who expect that increasing numbers ofcompanies are going to offer this type of service along with Internetpayment schemes as the line between what constitutes a bank and what doesnot becomes even more blurred (Matthews n.p.). "What's Next for Electronic Payments?" Banking Wire 9(Mar 1 , 2 4): 22-25.Sisk, Michael. Money TRansfers MoneyGram focuses on person-to-person transfers where only one personhas access to the Web. In addition,PayPal requests that merchants send merchandise to addresses that PayPalhas verified from its members. Security Most online retailers provide some type of privacy statement. Works Cited"CheckFree Adds E-Bills Capability to E-Mail." Credit Union Journal 5(Mar 19, 2 1): 16."Citigroup Closes Online Payment Service." Europe Intelligence Wire (Oct 31, 2 3): n.p.Clark, Brent. BitPass Although relatively new to the marketplace, micropayments mayrepresent a new payment option for consumers for an increasingly largenumber of transactions. As the potential payoff from fraud has increased due to theincreased number of users of electronic payment systems, the sophisticationof con artists has increased as well. Customers of Visa and MasterCard may be eager to see these productsintroduce a PayPal model to the Internet if it would allow consumers toreap benefits that are associated with many credit cards. The effect has been largely successful,with paper payments down 4.8 percent from January through August 2 3 whencompared to the same period a year before. Currently, consumers transfer money into PayPalfrom their bank accounts-or credit cards--effectively removing money fromthe banks' control. Initially, the companyfocused on providing funds from one person to another using the Internetand e-mail as the primary mode of communication. Electronic Commerce Introduction During the late 199 s, the term, "Electronic commerce," beganappearing in articles and news reports as analysts sought to describetransactions that were largely Internet-based, or at least transactionswhich did not require consumers entering a brick-and-mortar store.Articles were written about the young entrepreneurs who were rewritingbusiness rules and how electronic commerce would radically change theentire business landscape. Retrieved 19 April 2 4 from http://pcworld.com/news/article/ ,aid,11 376, .aspWilson, Ralph F. The economicprinciple commonly known as the "law of diminishing returns," which saysthat companies realize smaller incremental gains for each new customerafter a certain point, either does not apply in the world of e-commerce, orsets in at a very high level. Inaddition, the various phone companies in the United States use differenttechnologies, while Japan, for example, has only one phone company. It is not clearthat overall demand for goods and services is increasing as a result ofelectronic commerce, but the method of procuring those goods and serviceshas changed. At this point, CheckFree has access to only a fraction of the auctionsconducted on eBay. However, it is unclearwhether credit card companies can successfully introduce PayPal-likeproducts and compete successfully against PayPal itself. "Electronic Wallets: Past, Present and Future." Warriewood, Australia: GPayments, 2 1. There is concern byprivacy advocates that Microsoft has proved itself unable to controlprivacy of consumers, and that having this much information in a singledatabase compromises individuals' rights to privacy. This type of fraud occurs most often in workplaces and otherareas where there are computers logged onto the Internet and where personalsecurity might not be vigilant (Wilson n.p.). These sales were not to be limitedto such well-known companies as Amazon.com and eBay, companies whose Websites are garnering huge numbers of hits (Gonsalves & Kerstetter 25). Other analysts maintain that personal digital assistants (PDAs) mayoffer payment options that are more appealing to American consumers. SecureElectronic Transactions (SET) is an example of an application-layeredsecurity system used by Visa and MasterCard. The phone is waved at a payment device at thepoint of sale where information from the phone is transmitted wirelessly tothe payment device. At checkout, the consumer clicks on the PayCash logo.The funds are transferred from the consumer's account to the merchantaccount; the merchant's Web site also checks to ensure that the wallet isinstalled on the consumer's computer, or at the kiosk where the consumer isaccessing the Web ("Cyphermint PayCash" n.p.). This device couldalso be used at traditional point of sale locations such as gas stationsand grocery stores. The legitimate accountholder's credit is destroyed in the process. In South Korea, Visa's banks sent specialpop-out chips that are inserted into cell phones; this converts the phoneinto an electronic wallet. Although the companyhas not specifically indicated what its plans are with regard to the onlineauction business, it appears that it may be positioning itself to enableconsumers to pay for their online auction purchases directly through theirbank's Web sites as is done with CheckFree's more traditional bill payingservice. Since the advent of the euro at theconsumer level in 2 2, it has had an impact on electronic commerce. Microsoft has incurred particular scrutiny with regard to Internetprivacy and shopping through its Internet Passport product. Consumers can transfer funds into a PayPal account and then usetheir PayPal account to pay for goods and services on the Internet. Ease of paymentbecomes a key differentiating factor as consumers seek out those sites thatoffer secure and straightforward payment options. CheckFreeoriginally focused on this sector, providing consumers with the ability topay bills online even when merchants did not necessarily have online billpay available. Catalog companies have always provided businessto shipping companies, but the Internet has expanded that businesssignificantly. Inaddition, they can be sent through the mail or used in person. These digital certificates are issued by aCertificate Authority (CA) and vendors such as Entrust and Baltimoreprovide the technology to set up a CA. To make a purchase, theconsumer shops at a PayCash-affiliated online merchant, such asjewelrysprite.com. The consumer also selects which account is to be used forpayment. YAGA Yaga, Inc. To fully appreciate the payment systems used in electronic commerce,it is necessary to understand also the role of payment systems in commerce,how electronic commerce works on an international level, the securityissues associated with electronic commerce as well as the details ofspecific payment systems. CertainlyCitigroup, a leading credit card company offering both Visa and MasterCardwas unable to do so. This research considers each of these areas, andalso considers the future of electronic payments and their role inelectronic commerce. PayPal PayPal was launched as an independent company in 1998 with plans toserve the person-to-person transaction market. Cryptography and secure transaction sites are increasinglycommon, although one of the best security issues is the vigilance of theuser. The result is a highly secure and encrypted process designedto meet the stringent needs of security on the Web while protectinganonymity for international customers (Peha & Khamitov 2). The payment services focused on person-to-person payments and were a direct competitor to PayPal. The Effects of Electronic Commerce One of the areas that is sometimes overlooked about electroniccommerce is the impact that e-business has on companies. These transactions include notonly retail transactions that might take place at amazon.com between abusiness and an end customer (business-to-consumer), but also business-to-business transactions involving purchasing, inventory control andaccounting. A person's public key is included and signed by anauthority, and the authority may hold a certificate issued by a "super"authority. "Online Selling Set to Snowball in '99." PC Week 16(Jan 4, 1999): 25.Harbert, Tam. Since the private key is known only to the key's owner, usingthe key constitutes proof of identity. Retrieved 19 April 2 4 from ttp://www.law.duke.edu/journals/dltr/articles/2 2dltr 14.html.Souccar, Miriam. Content providers registercontent with BitPass and can control the length of time that theinformation is available. While this may seem anobvious scam, it plays on one of the marketing techniques used by PayPaland one of the reasons for PayPal's success. By expanding into the auction market andmaking it possible for even small merchants to accept credit cards in a waythat poses little risk to them and that can be done without sacrificingtheir financial well-being, PayPal may well have set the stage for asignificant transformation of the online payment industry. More than three million cell phones have the chipsinstalled, and more than 4 , payment terminals can accept payments fromthe phones, which use radio frequency technology. Traditionally, cryptography used symmetric algorithms in which twoparties share a common key. CheckFree When CheckFree was first introduced, it focused on electronic billpaying and electronic transfers between individuals. Internet-driven spending inWestern Europe in 1998 was nearly US$19 billion, and exceeded US$51 billionin 2 2. Micropayments Micropayments may be the next payment option that becomes widespreadon the Internet. Although merchants eliminate the risk of collection by using creditcards, the merchant fee to the credit card company can be significant. Both BitPass and Yaga are examples of micropayment plans(Simpson 23). A password is used toaccess the wallet. PayPal was in a perfectposition to capture this market ("Dreams of" 1). Checks Banks also emerged as both facilitators of credit and as repositoriesfor large sums of currency. Credit cards, like checks,are relatively secure compared to cash. The card will be based on funds deposited in a PayCashaccount ("Cyphermint PayCash" n.p.). "Phishing" Identity theft has reached new levels with the rise of the Internet.The term refers to the ability of thieves to obtain key personal data aboutsomeone-their social security number, account number, passwords, andsimilar types of information-and then use that data to use the creditinformation to obtain cash and goods fraudulently. PayCash PayCash, represented by Cyphermint in the United States, has focusedon business-to-business transactions on the Web and cash transfers fromindividuals in one country to individuals in another. Aslong as the company has access to the private key, it can decrypt themessage. However, the ramificationsof electronic commerce move far beyond just using the Internet to reachcatalog customers (Kehoe 2 ). As recentlyas the late 199 s and early 2 s, these attempts pretended to be fromlegitimate companies, such as Citibank, but were often filled withmisspellings or poor grammar. Individuals receive an e-mailtelling them that there is cash for them at PayPal, that all they need todo is go to the PayPal site and register as a member. In addition, the companywas expected to sell personal financial information as part of its businessstrategy. A nationalvideo chain has tested a similar system in New York and Texas, and reportsboth a 65 percent adoption rate and a significant 34 percent reduction inthe time spent at the point of sale (Simpson 23). Duke Law & Technology Review, Rev. 14, (Aug 21, 2 2). While using a cell phone might bean option for some consumers, if the transaction still requires a receipt-or if the consumer requests a paper receipt as many American consumers dowhen using electronic devices such as ATMs-there is little real advantageto using the cell phone over the ubiquitous credit card for transactionswhether at the local grocery store or at Internet kiosks in conveniencestores (Simpson 23). Definition of Electronic Commerce For some analysts, the term, "Electronic commerce," refers to theplethora of "dot com" companies which have come into existence in just thepast few years, created new millionaires from young entrepreneurs, andchanged retailing as consumers comparison shop and browse from their homesand offices 24 hours a day, seven days a week. Ratesvary in other countries from one percent in Latvia to two percent in theEuropean Union ("Cyphermint PayCash" n.p.). Still other cases of this type offraud occur when someone simply uses a personal computer that is alreadylogged on and that has access to an electronic wallet with pre-storedinformation. Checks are fareasier to transport than large amounts of cash, and since they require asignature, can be more secure than cash for large transactions. Originally, the company used e-mail to notify consumerswhen electronic bills-eBills-became available for payment. Most Internet chargebacks are automatic with the credit cardcompanies assuming that the customer is correct. At the same time,Japan's largest credit card company, JCB Co. Electronic Commerce and the World Economy Many international business partners are looking to become part of theInternet and e-commerce in a timely manner. Companies that issue these cards, along withcredit cards, have also implemented incentives, such as frequent flyermiles, to encourage their use. Despiteefforts such as this and software that looks for phony URLs in e-mail, itis unlikely that serious efforts to eradicate phishing will occur on anindustry-wide basis until the problem itself reaches larger proportions(Salkever n.p.). Both of these technologies seek to provideacceptable security in case the phone is lost or stolen. So long as PayPal sellers can verify thatthey shipped to a recognized PayPal address, PayPal does not hold themerchant liable for a chargeback fee or refund amount. Within five years, manyanalysts expect that there will be little difference between Europeanlevels of e-commerce and those within the United States. Time, Inc. This has helped thecompany gain a strong foothold in the Internet market since it is fargreater protection than that offered by traditional credit card companies.Since PayPal also facilitates credit card transactions, it is little wonderthat this approach has gained wide support (Wilson n.p.). Checksgained considerable favor as ways in which consumers chose to settle theiraccounts (Clark 4). Seller Fraud Seller fraud occurs on the Internet when merchants receive payment forgoods or services, but do not ship the goods at all, or fail to ship themin a timely fashion. A fingerprint is also recorded as part of this process. Ericsson implemented similartechnology in a test project in Sweden. "Tightening Security Technology." PC Week (Feb 3, 1997): 27.Moore, Mitchell. "Ways to Pay." New Media Age (May 22, 2 3): S8-S9."Internet Sales Rise as Share of All Sales." The New York Times (Aug 25, 2 3): C6.Kehoe, L. Clientauthentication requires individual asymmetric key pairs for each clientand, since support of SSL is embedded in the Netscape Navigator browser,public key certificates would need to be distributed to every Netscape useron the Internet. In addition, BrightMailalso notifies the companies whose identities are being spoofed. "Smart Cards: Building the Future Drives E-Commerce Pioneer." American Banker (Feb 24, 1999): 1.Sullivan, B. The first was the implementation of new legislation that greatlylimited the sale of personal financial transaction information to thirdparties. When consumers visit these Web sites, they areredirected to pages operated by Yaga. By requesting that the recipient send personal information-toverify their account data, to prevent fraud, or even to claim actual cash-the e-mailers are able to get unsuspecting victims to willingly supply keyaccount data. In addition, thesewallets are increasingly used to store information such as shoppingpreferences and personal information that enhances their use as marketingtools to merchants (Clark 7). The customer then pays the credit cardcompany, eliminating the risk to the merchant. It willbe more difficult to manage authentication if there are numerous CAs thatdo not communicate with each other. In addition, PayPal nowoffers consumers the option of choosing in which currencies they would liketransactions denominated in obvious recognition of the worldwide nature ofthe Web ("PayPal.com" 1). In general, customershave up to six months to file chargeback claims, and it can be difficultfor merchants to prove that the transaction was completed per theagreement. This is a market that may wellbe too small for leaders such as PayPal, and credit card companies have notyet effectively found ways to market for micropayments. The efficiency of these industries is being dramaticallyimproved by Internet-based methods of moving information allowing them toreduce transport, insurance and border administrative costs. The companyoriginally tracked information obtained through cookies anonymously, butthat changed when it acquired Abacus Direct Corporation in 1999. Under this system, aconsumer register one or more payment accounts-checking, credit card-in thestore. In addition, PayPalwas accepted in more than 3 countries in late 2 3 with plans to expand.At one time, it was rumored that Citigroup had tried to acquire PayPal tomerge the two payment systems together, but that was prior to eBayacquiring PayPal in 2 2 when eBay used PayPal to replace its own paymentsystem-BillPoint. Critics of SSL also pointout that even higher versions of SSL, which incorporate clientauthentication, confuse authentication and confidentiality because they usethe same key to encrypt for confidentiality and authentication (Moore 67). Despite the fact that not having client authentication goes againstbest principles in a robust system, the decision to not support clientauthentication initially helped it gain widespread acceptance. The euro will thus help soften the national barriers, andelectronic commerce will extend the reach of buyers and sellers. Under thechargeback rules, if a customer disputes a transaction, saying for examplethat they did not receive the goods at all, or that the goods were damaged,the credit card company issues a chargeback to the merchant for the amountof purchase. Credit card information is storedin the phone, and users use their phones to enter their security code onthe keypad; the phone then calls the authorizing agency with the securityinformation ("Ericsson" 12). Although PayPal has not confirmed that this was part of itsoriginal business plan, several analysts have speculated that thelimitation imposed a few years ago forced PayPal to re-examine itsstrategic direction and focus increasingly on consumer transactions ratherthan on mining financial information ("Dreams of" 1). An example of a session-layered security is Secure Sockets Layer (SSL) by Netscape. Identrus will act as a trusted third party byissuing root certificates to participant banks worldwide. Cell phones are already being used in Asia to makepayments on various accounts. In some cases, this is as simple asstealing credit cards or credit card numbers. This can cause particulardifficulty for companies-large and small-doing business on the Internet andrelying on credit cards, but poses particular issues for smaller companieswith smaller cash flows (Wilson n.p.). Companies such as Verisign, inaddition to providing the CA technology, offer a range of Internet securitysolutions (Kerstetter 35). "CheckFree's Moves Looking Like P2P Play." American Banker 169(Mar 12, 2 4): 1. Since banks already have the information needed to complete anonline auction transaction, this may be a strong market opportunity forCheckFree (Wolfe, 1). Nonetheless,there are important factors that need to be taken into account with regardto electronic commerce, and the payment systems used to facilitate thatcommerce are key. CheckFree alsoworked with financial institutions such as credit unions and banks toprovide security and ensure that the consumer had appropriate authorizationto conduct business with that account. There are also analysts who maintain that PayPal does not drawcustomers away from credit cards, but rather that PayPal's customers arereplacing paper transactions-currency, checks and money orders-with PayPaltransactions. The Internet offersunscrupulous individuals increased opportunities to engage in fraud withoutstealing all of the information associated with someone's identity.Account numbers and passwords to financial institutions or even paymentsystems such as MoneyGram.com or PayPal.com can be highly effective.However, consumers are warned not to give this information freely, and onlyto supply such information to legitimate sources. Thesenew devices would combine payments with a phone and a Palm Pilot-likedevice that also includes Web access. By eliminating the large fees charged by credit card companies,micropayment processors make it possible for consumers to downloadinformation on a pay-as-you-go basis. Manystatements are long, and appear in small print, and many appear to besimilar in their wording and particulars. The payment service lastedbarely three years; Citigroup announced in October 2 3 that the systemwould cease operations in February 2 4. Cookies Controversy arose with regard to Internet "cookies" when DoubleClickwas identified in 2 as being able to link an individual's Web surfinghistory to a name, mailing address and shopping habits. This initiates a chargeback which, in the case of Internetsales, is typically automatically ruled in favor of the customer. Western Europeans are already adept at using the Web and buying over theWeb. Buyers and sellers quicklyembraced PayPal as it offered greater flexibility and lower cost than acredit card, and it expanded quickly-adding thousands of new users each day-because it used "viral" marketing. As such, payment systems play a key role in that growth. The user confirms that heor she is authorized to transact business from that account, and thepurchase is completed. PayPal maintains that since it facilitatescredit card transactions, it does not compete with traditional credit cardcompanies. The second type of buyer fraud involves the account holder directly.In this case, the buyer purchases goods or services over the Internet, thenclaims they were not received or that they did not meet the customer'sexpectations. SincePayPal already dominates the market, Visa and MasterCard may be motivatedto introduce payment forms not yet present in the market if they intend tolure business away from PayPal (Simpson 22). "Assessing Criticism of PayPal." Web Commerce Today (Mar 15, 2 2): n.p.Wolfe, Daniel. Such plans are,however, only in their infancy at this point. Indeed, many consumers already use CheckFree when theyuse their bank's online bill paying service although they may not realizeit. In other cases, the fraudperpetrators steal someone's identity. Frequent fliermiles, rebates and other promotions are used to entice consumers to chooseone card over another, and having the option of using these payment formson the Web in a PayPal-like model would likely encourage their use in thisenvironment, as well. More recently, Abacus has focusedon co-operative mailing lists, which are less intrusive but which stilltrade in individuals' personal data (Krol 2 ). The PayCash Total Access card will be available initially in theUnited States, and will provide access to cash via ATMs as well aspurchasing power. By requiring both parties to have accounts tocomplete the transaction, but only one party to have an account to initiatethe transaction, PayPal was able to spread its market penetration quickly.As buyers and sellers established PayPal accounts, they sought outadditional PayPal members to simply transaction processing (Sisk 37). Secure Sockets Layer The most widely used encryption standard to date for onlinetransaction is Secure Sockets Layer (SSL), first introduced by Netscape in1994. S. Had the survey been an actual phish attack, these individualswould likely have given their personal information to the e-mailer(Salkever n.p.). The idea of micropayments is that consumers pay forproducts that they download on demand-music is the obvious market formicropayments at this point, particularly since the crackdown on Napster-like file sharing programs. Using thePayCash system, individuals can send transfer funds directly over theInternet from the United States to bank accounts or a post office withinRussia and Ukraine. Public Key Infrastructure and Electronic Commerce Public Key Infrastructure (PKI) is highly promoted in the securityindustry as the direction that security will take. Itis extremely difficult to determine whether the company dealt with inanother part of the world has a valid digital certificate system, and thiscould lead to fraud on the Internet. In other cases, the e-mails might have poorimitations of legitimate companies' logos. and Tribune Media Services are bothcustomers of Yaga. These supply-chain efficiencies have made global direct retailing of consumer productssuch as clothing, processed foods and health products possible. Both theeuro and electronic commerce will facilitate transactions and reduce costs. The firstoccurs when the buyer does not have the authority to use the payment systemin question-this is also known as "spoofing." The second occurs when thebuyer receives goods but initiates a chargeback claiming that the goodswere either not received or not ordered (Wilson n.p.). Latin America andAfrica are likely to lag behind because of the lack of telecommunicationsinfrastructure in these locations, and most analysts do not expect wirelessto present a viable alternative to land line Internet service at the levelrequired by business for some years (Mugan 14). While these systemsare still in their infancy, and while buyer and seller fraud remainconcerns, there is evidence that these new payment models-such as PayPal-may well emerge as the industry standard in a short period of time. PayPal was acquired by eBay in the early 2 s as it emerged as theprimary payment system on the auction site. "ebay CEO on What PayPal Is and Isn't." American Banker 169(Mar 24, 2 4): 1.Krol, C. Abacusused information from direct marketers and catalog companies to create acentralized database; ostensibly, this allowed it member companies totarget marketing materials more accurately to consumers. It is against this background that creative e-mail attempts to obtainlegitimate information for illegitimate purposes have evolved. These include software services,finance, education, entertainment and professional services. With micropayments, consumers pay for small items-those costing between 1 cents and 3 dollars, in the case of BitPass-anduse a model similar to PayPal. It includes asymmetric encryption (two keys) toprovide an advanced security service for electronic business and addressessecurity issues such as privacy, authentication, integrity, and non-repudiation. There is also theissue of deceptive advertising, since some maintain that the invitations toenroll in Passport make it sound as though enrollment is required tocontinue with other transactions, including the installation of Windows XP(Smith 1). As commerce became a more important aspect of the lives of humans, theneed for a medium of exchange developed as bartering became inconvenient.Today, payment is a common part of most commercial transactions whetherconducted online or in-person. TABLE OF CONTENTSIntroduction 2Payments and Commerce in General 3 Commercial Transactions and the rise of currency 3 Checks 3 Credit Cards 4 Debit and Charge Cards 5Electronic Commerce 6 Introduction 6 Definition of Electronic Commerce 6 Electronic Commerce and the World Economy 7 Electronic Commerce and Business Strategy 9 The Effects of Electronic Commerce 11Payment Systems Used in Electronic Commerce 12 Electronic Wallets 12 PayPal 13 PayCash 16 CheckFree 18 BitPass 2 YAGA 21 Issues associated with Micropayments 21 C2IT 22 Money TRansfers 23Security Issues Associated with Electronic Commerce 24 Internet Privacy v. The growth of e-commerce and the rapid speed of the Internet will leadto on-line ordering of lower-priced, nonperishable products, everythingfrom peanut butter to coffee filters. Suits have recently been filed against eBayand Amazon.com charging that the summary statement misleads consumers andprovides a false sense of security to Internet shoppers (Sullivan 1). "Suite Taste of Security." PC Week (Jan 19, 1998): 35- 36.Kingson, Jennifer A. Nokia wastesting its system in Finland ("Nokia" 56). In the past, simple symmetric encryption (one key) wassufficient to address the issue of confidentiality. Retailers will become "bundlers,"combining these orders into large packages of goods for each household anddelivering them efficiently to their doorsteps. In this electronic commerce, physical facilities and theconcentration of employees in specific departments (such as purchasing) maywell be reduced as computers and specialized software automate functions tolevels previously unimagined. "Setting a Trend." New Media Age (Jul 1 , 2 3): 27-29Moeller, Michael. Retrieved from the Internet 19 Apr 2 4: http://www.gpayments.com/pdfs/GPayments_eWallet_Whitepaper.pdf."Cyphermint PayCash System Moves to 7-Eleven Kiosks." Web Commerce Today (June 15, 2 3): n.p."Dreams of a Cashless Society." The Economist (US) (May 5, 2 1): 1."Ericsson Mobile Phones are Being Used as Electronic Wallets." The Engineer 29 (Jun 1, 2 1): 12.Gonsalves, Antone, & Jim Kerstetter. Online bill payment and debitcards were enjoying increased usage during this time, with transactions forthese types of payments up more than 13 percent for the same period(Simpson 24). If one of these mathematically linked keys is used to encrypt,then the other is used to decrypt. However,this remains a problem for most credit providers on the Internet (HarveyS8). "'Phishing' Is Foul on the Net." Business Week Online (Oct 21, 2 3): n.p.Simpson, Burney. "All Paths Lead to the Global Interchange." Computer Weekly (Jul 22, 1999): 14."Nokia Has Teamed Up with Visa to Build Electronic Wallets into Future Phones." PC Magazine 1 (Dec 2 1): 56."PayCash Technology to Provide Online Transfers from US to Russia and Ukraine." EuropeMedia (Dec 4, 2 2): n.p."PayPal.com" Retrieved from the Internet 19 Apr 2 4: http://www.paypal.com.Peha, Jon M., and Ildar Khamitov. "Pay Cash: A Secure Efficient Internet Payment System." Cyphermint, Inc., October 2 3. PayPal, for example, was the victim of a particularlysuccessful scheme in 2 when thousands of credit card numbers were stolenby hackers from Russia. By combining security and convenience in devices thatmany Americans are already using, this type of mobile payment system maywell gain rapid market acceptance. It is expected that overtime, the banks and Identrus will offer this authentication to their keycustomers, as well (Souccar 1). Initially, banks took little notice of PayPal; it was only when PayPalemerged as the dominant non-credit card payment option for consumertransactions on the Internet that banks began to develop strategies thatwould compete with PayPal. As it is, c2it is now considered a prime exampleof how direct competition with PayPal can be detrimental to a new paymentsystem's introduction ("Citigroup Closes" n.p.). When thatcapability was combined with DirectClick's capabilities, however, it becamepossible for the company to merge purchase history with online surfinghistory. Computerworld (Apr 22, 2 3). In fact, the combination of the euro and theInternet released pent-up demand by consumers for goods from other nations. Since 2 2, European consumers as well as businesses have become morelikely to regard buying and selling on the Internet as acceptable asAmerican residents do. Signing up for PayPal is free, and if aseller accepts PayPal payments, the buyers must also have PayPal accounts.Similarly, anyone can send anyone else money through PayPal-a throwback toits person-to-person transfer roots, but the receiving person must alsohave a PayPal account. "Electronic Wallets in Every Pocket?" Card Marketing 5(Apr 2 1): 23.Matthews, C.C.N. This may be a particularly lucrative industry since some estimatesplace the value of content sales at $748 million in the first six months of2 4, a 23 percent increase from only a year previous. However, CheckFree may succeed in the potentially highly lucrativeauction market where other payment companies have failed because of thecompany's close relationships with banks, which have also largely been shutout of the eBay market. The result is a complex security algorithm that can, whenrequired, match one account with one name, but which prevents linking aname/account combination with another on a specific transaction withoutusing a complicated de-encryption algorithm. In 1999, forexample, it was estimated that the Internet would be likely to generatesales in excess of $3.2 trillion in the year 2 3, a result of bothrevolutionary and evolutionary factors. C2IT C2it-pronounced "see to it"-was widely watched by the Internet marketwhen it was launched in 2 . Asymmetric differsfrom symmetric encryption by having two keys: one public and the otherprivate. Outlook Increased competition between PayPal-type systems and Traditional Payment Systems Credit companies such as Visa and MasterCard are not likely to letPayPal-type systems continue to encroach on their market without competingfor this increasingly lucrative business niche. Creditemerged as one way to handle large purchases as well as to make it possibleto buy over time that which one might not be able to afford in the present. Electronic Commerce and Business Strategy The growth of electronic commerce outpaces analysts' expectationsdespite the dot-com bust of the late 199 s and early 2 s. Issues Associated with Mobile Payments Asia has a much higher penetration of cell phones in the market thanthe United States, and some analysts maintain that the Asian market ingeneral is more willing to adopt electronic technology than the Americanmarket. The Global Mall. Bartering was the most common type oftransaction for many years, particularly in agriculturally-based societiesand among those individuals who did not possess land or other wealth.Money emerged early in human history as a medium of exchange, however, andmembers of one community agreed that their money could be used to purchasegoods or services from any member of that community. At the height of its popularity,c2it had more than 35 , active accounts. In one survey, 4 percent of those who received afraudulent e-mail purportedly from Citibank believed that it waslegitimate. However, thesefigures can be suspect due to the difficulty in capturing all of thetransactions associated with content purchases, and some caution thatoverexuberance in this area could lead to a similar experience as theoverexuberance with the Web in general in the late 199 s (Simpson 23). PC Magazine (Feb 9, 1999): 3 ."Sales on the Internet." Purchasing (Mar 25, 1999): 11.Salkever, Alex. PayCash is expanding its product offerings and blurring the linesbetween financial institutions and Internet payment systems by offering aprepaid debit card that can be used in brick and mortar stores as well asonline. Like Western Union, MoneyGram makesit possible for people to transfer money from bank accounts, credit cardsor debit cards to the company, and the recipient can pick up the funds inlocal currency at any location around the world. K. However, in the fakee-mail, they are taken to an illegitimate site where they enter keyinformation that is then used to siphon funds from the actual PayPal site.PayPal and other companies-including Citibank-have been subject to thistype of hoax (Salkever n.p.). This may be more accurate, given the company's businessmodel, but it should also be noted that credit cards continue to be apopular choice for paying for transactions on the Internet, and Internetsales continue to represent only a small percentage of all retailtransactions in the United States (Kingson 1). When theconsumer wants to check out, the system reads the consumer's fingerprintand compares it to the fingerprint recorded during the registrationprocess. However, as the Internet hasgained popularity, this type of e-mail has increased in sophistication.Today, e-mail scam artists lift actual logos from other sources and use e-mail that greatly resembles the legitimate e-mail of the sites they areimitating. If a message is encrypted by auser's private key, it can be deduced that the message was "signed"directly by the user. Biometric Payments Immediately after the attacks of September 11, 2 1, there wasconsiderable interest in the area of biometrics because of the increasedsecurity that these measures provide. This can be particularly difficult since the providers that thesecompanies work with are generally selling information rather than aphysical product. Inaddition, credit card transactions are subject to "chargebacks," whichoccur when a customer disputes the delivery or quality of goods receivedvia credit card. "MoneyGram Launches Internet Service for Money Transfers." Canadian Corporate News (Mar 9, 2 4): n.p.McAuliffe, Wendy. CheckFree provides most of the software that banks use for thisfeature. As the phony messages move across the Net,BrightMail's software tracks it, creates a signature of the mail for futurereference, and notifies BrightMail's customers. Ltd., has issued a pilotprogram that combines cell phones and fingerprint biometrics (Simpson 23). Funds can be added at 7-11 kiosks, aswell. The use of mobile payments may not also be enough of a convenience forconsumers to eagerly embrace their use. From here, consumers can subscribefor particular timeframes, or purchase specific articles. Again, the stated goal was the more effective targeting ofmarketing material, but privacy advocates were concerned that having asingle database containing such information could easily lead to abusethrough distribution to third parties. Some analysts maintain that if c2it had been successfulin penetrating the online auction market, if eBay had not acquired PayPal,or if c2it had been launched earlier, it might have had greater success incompeting against PayPal. For one thing, PayPal has a3 -day period for chargebacks rather than a six-month period. The credit card company is not refunding the money to thecustomer; instead, the merchant loses the money. The buyers' bankaccounts must also be linked via CheckFree (Wolfe 1). Already electronic commerce has become an economic factor in Europe.In addition to driving investments relating to Internet access, electroniccommerce will also drive traditional information technology investmentssuch as hardware, software and services. Authentication,data integrity and non-repudiation are provided by public key certificates(digital certificates) and digital signatures. The key to this type of fraud is that the account holder istypically not involved in the actual fraud; instead, a third-party gainsaccess to the account information. The process begins when a consumeropens a PayCash account. OtherWeb sites use payment options that makes it possible for consumers tosubscribe to the entire Web site, or download individual articles on a per-article basis. The transactions can be initiated at a number ofkiosks that PayCash operates, including those at 7-11 convenience stores("PayCash" n.p.). (2 3, April 22). The second event was the emergence of eBay as more than just anauction site for selling second-hand goods. In late 2 2, Microsoft estimated that it has more than 2 million Passport users worldwide (Smith, 2 2). Online information agentswill do it for them, comparing prices among competitors. Banks involved in the Identrusproject include ABN AMRO, Bank of America, Bankers Trust, Barclays, ChaseManhattan, Citibank, Deutsche Bank, HypoVereinsbank, Canadian Imperial Bankof Commerce and Sanwa Bank. Payments and Commerce in General Commercial Transactions and the rise of currency All commercial transactions involve an exchange of one good for eitheranother good-bartering-or payment. This poses a serious threat toonline payment systems, but such systems are taking what appear to bereasonable steps to address the issue. These, in turn,will issue digital certificates to their corporate customers, therebyconcluding a true public key infrastructure. Thus the mainstay, manufacturing, is not looking atincreasing its capacity under electronic commerce (necessarily), but thesame cannot be said for transportation and logistics companies. Some companies and consumers may notbe comfortable entrusting business transactions and personal information tothese organizations, many of which have little experience in handlingcorporate transactions. Symmetric Algorithm Cryptography Confidentiality can be provided by simple encryption. Credit Cards Credit cards have increasingly been used as payment for commercialtransactions, as well. Simply put, delivering an item to a customer (business orconsumer) requires human interaction in the form of truck drivers,longshoremen and other traditional transportation workers (Harbert 42). Certificates can be implemented into various applications (webbrowser, smart cards), networks, or sessions. Many touted "dot com" companies have gone bankrupt as they were unable toproduce that most traditional product of traditional retailing: profit.Electronic commerce companies are finding that they must integratetraditional factors into their organizations, and traditional companies arerecognizing that electronic commerce offers strong potential for theirbusinesses, as well. However, to be successful, a new model will need tobe introduced that eliminates the relatively high fees that these companiestypically charge merchants so that smaller merchants and thoseparticipating in one-time sales can also participate in the payment scheme. There is no charge to the customer at this point for setupor maintenance. One company is using honeypots-alluring fake Web sites-to identifyphish attacks as they occur. However, two events transpired which quickly changed thecompetitive landscape, and PayPal adapted in ways that have caused it toemerge as the de facto payment standard for many Internet transactionstoday. If a customer wants to send sensitive information to a business,the customer would encrypt the message using the company's public key. However, Passport tracks passwords and purchasing information--including phone and credit card numbers--in addition to Web history.Passport users are automatically registered for Passport when they open aMicrosoft hotmail e-mail account--which is free--and Windows XP users areinvited to register for Passport when they set up their Internetconnection. Certainly the skills and job duties of manyemployees will change as electronic commerce becomes more commonplace(Kehoe 2 ). However, theindustry watched c2it with particular attention because it was started byCitigroup, one of the largest financial institutions in the world, andmanaged by the company's credit card division. Software is now often stored onservers belonging to specific credit card companies so that individuals donot need to download the software to their systems. The infrastructure is a combination of hardware and software products,policies and procedures. Microsoft and the European Union face off over Internet privacy concerns. The unstructured and uncontrolled system of setting up a CA means thatanyone can apply to be recognized as one, including private entities. This type oftechnology increases the flexibility of electronic wallets beyond simplyInternet use, and may increase the penetration of electronic wallets in themarket as a whole. Recently, CheckFree has indicated through its activities that it maybegin actively pursuing that part of the Internet payment market which islargely controlled by PayPal. Based on that scheme, PayPal developedsoftware to monitor suspicious activity; such activity is then reviewed bya security professional to determine whether it is fraudulent (Wilson,n.p.). Asymmetric or public key encryption is needed toresolve the problems raised by symmetric algorithms. Using technology thatallows individuals to capture the actual logos of companies from theirlegitimate Web sites, the con artists are able to fool even sophisticatedcomputer users. This facilitatedelectronic commerce only from the standpoint that it helped to eliminatethe costs associated with companies mailing paper bills to consumers andprocessing paper payments, such as checks and money orders. The first type of fraud, not having authority to use a particularpayment system, is most often associated with the theft of payment systemaccess. Digital Signatures and Certificate Authorities Asymmetric or public key encryption is closely tied to digitalsignatures. Security 24 Cookies 25 Buyer Fraud 26 Seller Fraud 28 "Phishing" 28 Symmetric Algorithm Cryptography 31 Secure Sockets Layer 31 Public Key Infrastructure and Electronic Commerce 32 Digital Signatures and Certificate Authorities 33Outlook 35 Increased competition between PayPal-type systems and Traditional Payment Systems 35 Micropayments 36 Biometric Payments 36 Mobile Payments 37 Issues Associated with Mobile Payments 38 Conclusion 39Conclusion 4 Works Cited 41 E-COMMERCE PAYMENT SYSTEMS Introduction Although the Internet is an increasingly large part of the commercialenvironment, it continues to represent only a small fraction of the totalcommercial transactions taking place during any given day. As the domain of trustexpands within an open Internet medium, businesses are more focused onproviding authentication, integrity and non-repudiation (Moeller 27). Privacy statements are as much a marketingtool as they are a legal document, and many privacy statements containlanguage suggesting that consumers must give permission for their data tobe revealed to third parties, or the statements might contain instructionsfor customers to "opt out" of having their data revealed to third parties.Problems arise, however, when the summary privacy statement--which istypically easily found on a company's Web site--does not match the detailedprivacy policy of the company. Theimplications of the euro are going to be immense, not only in Europe, butthroughout the world. Infact, Internet sales topped more than $12.5 billion just in the secondquarter of 2 3, well above analysts' predictions. In some cases, these are scam operations designed forfraudulent purposes from the beginning. "Silicon Power with Added Value." The Financial Times (Nov 8, 2 ): 2 .Kerstetter, Jim. PayPal did not pioneer so-called "viral"marketing, but has used that technique well in penetrating more than justthe person-to-person market. Or,consumers can associate a checking account with their PayPal service.Alternatively, credit cards can also be used. Specifically, the model isbased on digital currency with a 1 24-bit RSA blind signature algorithm andaudit trails. The PayCash system is based on the concept of the electronic wallet,but greatly expands on that model. Lackinga shipping receipt that confirms delivery, or a confirmed physical address,the merchant often has little recourse to fight this type of fraud (Wilsonn.p.). Passportpromises to make Web surfing easy by providing a single sign-in service--inthis way, users do not have to enter personal information such as theirname and e-mail accounts at member sites, but instead, enter their Passportinformation. Combined, the Economic andMonetary Union (EMU) resembles the United States in population and size ofGDP. Although the sale of goods--such as books and music--is the mostvisible area of e-commerce growth, the biggest advances so far are in thesupply and distribution of services. In addition, buyers often wanted to have speedieraccess to goods than traditional checks allowed. Unlike PayPal, where consumers have an option of using bank accounts,credit cards or funds in a PayPal account, PayCash requires thatindividuals transfer money into a PayCash account. PayPal has continued to expand its product offerings in its shorthistory. Public key certificates (or digital certificates) and digitalsignature (in a PKI) achieves authentication, integrity and non-repudiationby having asymmetric encryption algorithms that require two keys: a publickey known to everyone and a private key known only to the recipient of themessage. Since eBay now owns PayPal, this isnot surprising, particularly since eBay allows buyers to filter out thoseauctions that do not accept PayPal and since CheckFree is an obviouscompetitor to PayPal (Wolfe 1). Security Issues Associated with Electronic Commerce Internet Privacy v. The consumer is then free to add funds to the PayCashaccount. Manufacturingcompanies, too, are beginning to use the Internet to manage global supplychains that radiate from the United States, Europe and parts of East Asia.Trade distribution and logistics industries deal with two flows: a flow ofgoods and a 'counter-flow' of information about the goods and about theirmovement. However, many companies,including eBay, also provide short versions of their statements which theyencourage consumers to read. SSL provides sessional security services by using a combination ofpublic key and symmetric cryptosystems to provide confidentiality, dataintegrity, and authentication of the server, as well as giving the optionto authenticate the client. Initially, consumers had to download the walletsoftware to their computer, and some were concerned about security (Martin23). According to some analysts, the populations of the United States andthe 11 nations adopting the euro are 286 million and 292 million,respectively, while the GDPs in 1997 were US$8.11 trillion and US$6.26trillion, respectively (Rupley 3 ). However, new models make useof Internet technology, including e-mail and instant communication aroundthe world, to provide secure and easy payment models. In March 2 4, for example, only 16, auctionsallowed CheckFree payments out of the more than 2 million auctions anddirect sales available at the site. In addition, the publishing industry isincreasingly interested in pursuing smaller product offerings available onan on-demand basis, and some periodicals-including the Wall Street Journalhave changed to a fee-based option that includes a subscription similar towhat consumers are used to for the print edition of the newspaper. Nokia used a separate SIMcard built into the phone; users are issued a four-digit PIN code which isthen sent to a server via the phone to confirm a purchase. Mobile payments rely on a wireless infrastructure, while theinfrastructure in the United States continues to be a wire-based one. PayPal and other payment systems have set up systems to identifythese fraudulent sellers, and careful IP tracking is making it increasinglymore difficult for these purely fraudulent operators to succeed. Internet commerce has expanded more rapidly than most analystsexpected, and it is likely to continue to expand at a very high rate solong as buyers and sellers are able to enjoy a secure and efficientenvironment. Consequently, e-commerce will become a competitive necessity in Europe aswell as the United States (McAuliffe 28). If this paper is not what you are looking for, you can search again: Search for: or Click here to request an essay written just for you.

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