Unit 4

Laws relating to online transaction

Index
1. Salient Features, Security in E-Commerce
 Digital Signature
 Network Security Data Encryption
2. Firewall
3. E-Commerce Application in Manufacturing, Wholesale, Retail & Service Sector

By: Charul Verma

E-Commerce Features
1. User-friendly structure
User-friendly access is one of the most important e-commerce features that clients look for in
an e-commerce website. Customers will switch to other online retailers if they have trouble
using your websites or can’t find what they’re looking for.
2. Global reach
E-commerce, as I already mentioned, is everything. Being everywhere makes it incredibly
practical for us, the users. You can live in New York City and shop for products all over the
world. Because the goods or service is available from anywhere, the customer is wide and the
business grows as a result.
3. Information Density
Rich information is made available to the buyer before, during, and after the purchase of a
good or service thanks to e-commerce. These data are better in quality and less expensive to
give and receive.
Data density means overall amount and fine of facts to be had over the internet to all market
buyers and sellers. net massively increases data density. Record density gives higher
exceptional statistics to patrons and merchants. E-trade technologies increase accuracy and
timeliness of records. For instance, the flipkart.com store has a variety of products with
expenses.
4. Customer Reviews
Create a section on the online store’s website where customers can read product reviews.
Reviews are essential for any online business because clients would not have the opportunity
to actually check a product; instead, they would likely rely on reviews left by other
customers.
Platforms that allow customers to leave reviews on products to help others make informed
decisions.
5. Secure Payment
Make sure to make the checkout stage as simple as possible for the clients by including a
variety of online payment options in the shopping cart in order to increase your chances of
closing the transaction during the primary checkout process. Platforms should have secure
payment gateways for customers to make payments securely.
6. Mobile Responsiveness
To improve your conversion rate and keep clients satisfied, make sure your website design is
automatically adjusted for the size and form of phones. Mobile responsiveness to reach more
people
7. Universal Standards
Universal standards suggest that your website runs on established platforms using accepted
methods and processes. E-commerce supports a single set of universally accepted worldwide
standards. Everywhere, this is done.

By: Charul Verma

The goal is to make it easier for customers to quickly find what they’re looking for without
encountering unnecessary blockages that can prevent them from making a purchase.
E-Commerce security
E-Commerce security is a set of guidelines that ensures safe online transactions. Just like
physical stores invest in security guards or cameras to prevent theft, online stores need to
defend against cyberattacks. According to the 2020 Trustwave Global Security Report, the
retail industry was the most-targeted sector for cyberattacks.
In order to adequately protect your company from attack, you first need to know four key
terms that are essential to understanding E-Commerce security protocols.
 Privacy
In the context of E-Commerce security, privacy involves preventing unauthorized internal
and external threats from accessing customer data. Disrupting customer privacy is considered
a breach of confidentiality and could have devastating consequences for your customers’
privacy and your reputation as a retailer. Privacy measures include antivirus software,
firewalls, encryption, and other data protection measures.
 Integrity
Integrity refers to how accurate a company’s customer data is. Maintaining a clean, curated
customer dataset is critical to running a successful E-Commerce business. Using incorrect
customer’s data — such as their phone number, address, or purchase history — causes people
to lose confidence in your ability to protect their data and in your company as a whole.
 Authentication
Authentication proves that your business does what it claims and that customers are who they
say they are. Your site should have at least some proof that it sells what it says it does and
delivers those goods according to expectations. Using customer quotes throughout your
website and publishing case studies are two strategies for adding to your business’s
credibility.
Customers should also be required to verify their identities before processing their online
transactions. Requiring two-factor authentication or using magic links to log customers into
their accounts are examples of customer authentication.

 Non-repudiation

By: Charul Verma

Non-repudiation means neither a company nor a customer can deny transactions they’ve
participated in. Non-repudiation is somewhat implicit in physical stores but pertains to online
purchases as well. Non-repudiation measures like digital signatures ensure that neither party
can deny a purchase after it has been made.
 Confidentiality
Information should not be accessible to an unauthorized person. It should not be intercepted
during the transmission.
 Availability
Information should be available wherever and whenever required within a time limit
specified.
 Encryption
Information should be encrypted and decrypted only by an authorized user.
 Auditability
Data should be recorded in such a way that it can be audited for integrity requirements.
Best practices for E-Commerce security
Hackers are always inventing new strategies for stealing data. In addition to protecting
against known threats, there are some general best practices for E-Commerce security.
1. Use multilayer security
Multilayer security is the practice of adding secondary or tertiary layers of security controls
throughout a technology system. If one layer is compromised, attackers have to penetrate at
least one other layer to get the information they are seeking. Multiple security layers adds
more obstacles attackers have to break through to infiltrate your site.
One important layer is a content delivery network (CDN). The best CDNs use machine
learning to block threats and infectious traffic. Another layer could be multifactor
authentication for employees logging in to company systems and for customers logging in to
their loyalty accounts. When they enter their information, they’ll need to enter another code
sent to them via text, email, or authenticator app.
2. Secure your website with SSL certificates
Secure sockets layer (SSL) certificates verify a website's identity and serve as an encrypted
connection. SSL certificates protect credit card details and other potentially sensitive
transactions that occur on your E-Commerce website and prevent hackers from using your
site as part of a phishing attack.
3. Use firewalls
Firewall software and plugins allow trusted traffic but keep untrusted connections off of an E-
Commerce site. Regulating traffic flow makes detecting any anomalies easier and stops them
before they enter your network. This makes firewalls especially useful for protecting against
cyber threats like XSS, spam, and malicious SQL injections.

By: Charul Verma

4. Install antivirus and antimalware software
Attackers often use stolen credit card information to place orders, which puts your store at
risk of enabling fraudulent activity. Antivirus and antimalware software uses sophisticated
algorithms to flag malicious transactions and provide fraud risk scores to determine whether
transactions are legitimate. Regularly scanning your site can greatly reduce malware attacks.
5. Train your staff
All employees should be aware of regulations that protect customer information. Enforcing
password updates, limiting access to sensitive information, and requiring employee
cybersecurity and privacy training are all steps you can take to decrease your liability. And
remember to revoke access to all systems when employees leave, so they can’t sell data to
cyberattackers or commit cybercrimes themselves.
6. Educate your clients
Some lapses in security happen as a result of customer behavior. Customers have logins to
many sites and sometimes reuse the same password over and over. Requiring long, complex
passwords and reminding customers about the risks of phishing attacks decreases the
potential for cyberattacks.
Measures to ensure Security
Major security measures are following −
 Encryption − It is a very effective and practical way to safeguard the data being
transmitted over the network. Sender of the information encrypts the data using a
secret code and only the specified receiver can decrypt the data using the same or a
different secret code.
 Digital Signature − Digital signature ensures the authenticity of the information. A
digital signature is an e-signature authenticated through encryption and password.
 Security Certificates − Security certificate is a unique digital id used to verify the
identity of an individual website or user.
Security Protocols in Internet
We will discuss here some of the popular protocols used over the internet to ensure secured
online transactions.
Secure Socket Layer (SSL)
It is the most commonly used protocol and is widely used across the industry. It meets
following security requirements −
 Authentication
 Encryption
 Integrity
 Non-reputability

By: Charul Verma

"https://" is to be used for HTTP urls with SSL, where as "http:/" is to be used for HTTP urls
without SSL.
Secure Hypertext Transfer Protocol (SHTTP)
SHTTP extends the HTTP internet protocol with public key encryption, authentication, and
digital signature over the internet. Secure HTTP supports multiple security mechanism,
providing security to the end-users. SHTTP works by negotiating encryption scheme types
used between the client and the server.
Secure Electronic Transaction
It is a secure protocol developed by MasterCard and Visa in collaboration. Theoretically, it is
the best security protocol. It has the following components −
 Card Holder's Digital Wallet Software − Digital Wallet allows the card holder to
make secure purchases online via point and click interface.
 Merchant Software − This software helps merchants to communicate with potential
customers and financial institutions in a secure manner.
 Payment Gateway Server Software − Payment gateway provides automatic and
standard payment process. It supports the process for merchant's certificate request.
 Certificate Authority Software − This software is used by financial institutions to
issue digital certificates to card holders and merchants, and to enable them to register
their account agreements for secure electronic commerce.
Firewall
A Firewall is a network security device that monitors and filters incoming and outgoing
network traffic based on an organization’s previously established security policies. At its most
basic, a firewall is essentially the barrier that sits between a private internal network and the
public Internet. A firewall’s main purpose is to allow non-threatening traffic in and to keep
dangerous traffic out.

Firewall History
Firewalls have existed since the late 1980’s and started out as packet filters, which were
networks set up to examine packets, or bytes, transferred between computers. Though packet
filtering firewalls are still in use today, firewalls have come a long way as technology has
developed throughout the decades.

By: Charul Verma

  Gen 1 Virus
o Generation 1, Late 1980’s, virus attacks on stand-alone PC’s affected all
businesses and drove anti-virus products.
 Gen 2 Networks
o Generation 2, Mid 1990’s, attacks from the internet affected all business and
drove creation of the firewall.
 Gen 3 Applications
o Generation 3, Early 2000’s, exploiting vulnerabilities in applications which
affected most businesses and drove Intrusion Prevention Systems Products
(IPS).
 Gen 4 Payload
o Generation 4, Approx. 2010, rise of targeted, unknown, evasive, polymorphic
attacks which affected most businesses and drove anti-bot and sandboxing
products.
 Gen 5 Mega
o Generation 5, Approx. 2017, large scale, multi-vector, mega attacks using
advance attack tools and is driving advance threat prevention solutions.
Types of Firewalls
 Packet filtering: A small amount of data is analyzed and distributed according to the
filter’s standards.

 Proxy service: Network security system that protects while filtering messages at the
application layer.

 Stateful inspection: Dynamic packet filtering that monitors active connections to

determine which network packets to allow through the Firewall.

 Next Generation Firewall (NGFW): Deep packet inspection Firewall with

application-level inspection.
What Firewalls Do?
A Firewall is a necessary part of any security architecture and takes the guesswork out of host
level protections and entrusts them to your network security device. Firewalls, and especially
Next Generation Firewalls, focus on blocking malware and application-layer attacks, along
with an integrated intrusion prevention system (IPS), these Next Generation Firewalls can
react quickly and seamlessly to detect and react to outside attacks across the whole network.
They can set policies to better defend your network and carry out quick assessments to detect
invasive or suspicious activity, like malware, and shut it down.
Why Do We Need Firewalls?

By: Charul Verma

Firewalls, especially Next Generation Firewalls, focus on blocking malware and application-
layer attacks. Along with an integrated intrusion prevention system (IPS), these Next
Generation Firewalls are able to react quickly and seamlessly to detect and combat attacks
across the whole network. Firewalls can act on previously set policies to better protect your
network and can carry out quick assessments to detect invasive or suspicious activity, such as
malware, and shut it down. By leveraging a firewall for your security infrastructure, you’re
setting up your network with specific policies to allow or block incoming and outgoing
traffic.
E-Commerce Application
1. E-Commerce applications in Manufacturing
Manufacturing can be defined as the process of collecting and then converting raw materials
into finished, qualitative goods or products for the consumers.
Manufacturing requires a web of various components, contracts personnel etc. working
intricately together and in sync in order to produce goods or services.
Manufacturing requires components, assemblies, transportation, storages, paper works etc.
E-Commerce applied to the supply chain management process helps in reducing the overall
costs drastically and improves quality and efficiency by automating most of the supply chain.
2. E-Commerce application in Wholesale
Selling goods or products in large quantities to anyone other than the consumers, take for
example the retailers, industrial/ commercial or other business users or even distributors are
known as wholesalers.
Physical assembling, sorting & grading goods in large lots, breaking bulk, repacking &
redistributing in smaller lots is all a part wholesale.
Problems faced by the traditional system of wholesale:
The local wholesalers could not compete with the foreign wholesale enterprises who had
acquired highly advanced management and operational skills over due time.
The wholesale sector was characterized for its high input and low output.
Wholesale operating costs which included staffing, setting up and acquiring land for local
warehouses, establishing distribution centers etc. were extremely high.
Role of E-Commerce in wholesale:
 Reduced operating costs, access to accurate and correct information on time & quick
responses helps in qualitative and efficient decision making.
 Ability of doing global marketing in less time and cheaper
 Gaining and catching up to the competitive edge held by foreign wholesalers such as
MNC’s
 Offers a wide and extensive range of information, intermediary and business services.

By: Charul Verma

 3. E-Commerce application in Retail
Selling of goods and services to the consumers for their personal consumption and use is
known as retailing.
e.g: Ebay.com, departmental stores, then services like dentists, doctors, hotels, etc.
Retailers provide a link between the consumers and the manufacturers and add value to the
product and service by making their sales easier.
Retailers answer any queries that you may have, they display and demonstrate products to the
consumers before selling it to them. this makes the services by retailers less risky and more
fun to buy products.
Role of E-Commerce in Retailing:
The Internet has made retailing an exciting and challenging field in recent days with various
companies hosting their stores online via the internet.
People can now sit at their computers, open the website they desire to do so and browse the
catalogues put up by the company (retailer), choose their product and either pay for it online
itself or on delivery... You don't need to step out your room to make a purchase nowadays.
Having your store online helps drastically in cost cutting as companies don't need to purchase
stores, they can cut down on staff, provide services to a much wider audience etc.
4. E-Commerce application in the Service sector
One of the three main industrial categories of a developed economy is the service sector.
It involves basically the provision of all services such as distribution and sales of goods to
other businesses and consumers such as pest control, entertainment and even services such as
transportation.
It also includes the public utilities and the soft parts of the economy such as insurance,
banking, education, insurance, etc.
The service sector focuses mainly on people-to-people services.
Issues faced by the service sector:
Since services are intangible, it’s extremely difficult to make customer understand and aware
about their benefits.
Quality of services depends solely on the quality of the individual providing the services.
There's no special technology or anything like in manufacturing to attract people.
Role of E-Commerce in the Service Sector:
E-Commerce helps in improving and increasing the speed of transactions, reduces
management expenditure, increases efficiency and increases competitiveness.
Helps the insurance, banking and mainly all the financial sectors, real estate,
telecommunications, tourism, logistics, and postal services.

By: Charul Verma

E-Commerce also helps services gain a competitive advantage by providing strategies for
differentiation, cost leadership and customer satisfaction.
E-Commerce Applications
 Opportunity to reach new customers – Customers are increasingly turning to the
internet to discover new products, and manufacturers can take advantage of this. If
your product is available online, customers who can’t visit your retail store, channel
partner, or value-added reseller, can find out about it, and purchase the item, even if
they are remote or in a location not covered by your brand's channel reach.
 Cuts costs – Ecommerce can bring down your costs per unit, as you don’t need a
large inventory of physical products on display in stores. For some use cases, you can
also eliminate the costs of managing retail stores as well as shipping, storing, holding
costs, and inventory insurance.
 Smaller inventories reduce risks – With a more optimized supply chain and online
ordering process, a manufacturer and sales representatives can better forecast demand,
reducing excess inventory development. That means lower storage costs, and a
reduction in money tied up in stagnant inventory. This also reduces insurance
premiums, the risks of damage (from storms or floods, for example.), and
obsolescence.
 Improve customer satisfaction – By creating an online store, manufacturers can
offer more appealing product listings. Customer service improves by providing a full
product catalog, with full product information on your site. In effect, it means you
manage your brand exactly as you need it managed. This allows the manufacturer to
cater to customer expectations. With a direct connection to the end consumer, it also
allows manufacturers to offer additional services, such as consulting, design, or
product installation—as an expanded business offering.
 Increase profitability – The manufacturing industry is pressed to continually
improve the effectiveness of their sales teams, and cater to both B2C consumers and
B2B buyers. Going online means catering to the growing desires of customers to
interact directly with the brand, while also cutting out the middle-man in many cases.
Although distributors and wholesalers provide important business value for many
industries, D2C and direct B2B online sales can help manufacturers retain full
margins for their products.

By: Charul Verma