E-Business Technologies: Payment Security in E-Commerce Analysis

This report delves into the critical aspects of e-business technologies, specifically focusing on consumer information and payment security issues within the e-commerce landscape. It begins with an overview of current payment methods, including credit/debit cards, third-party processors, and smart cards, while also highlighting the associated security risks such as e-commerce fraud and lack of anonymity. The report then provides a detailed analysis of these issues, including the increasing rate of fraud, vulnerabilities in payment systems, and potential data breaches. Furthermore, it proposes comprehensive solutions to mitigate these risks, such as proper customer verification, data encryption, secure payment gateways, and the implementation of technologies like SSL and SET. The report also addresses business and technical challenges in implementing these solutions, and finally, it explores future trends in payment security, including real-time security measures, AI, IoT, and cryptocurrency integration. The report emphasizes the importance of robust security measures to protect consumer data and ensure secure online transactions.

Running head: E-BUSINESS TECHNOLOGIES.
E-BUSINESS TECHNOLOGIES
Name of the Student
Name of the University
Author Note

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Executive Summary
The transaction of money for exchange of commodities through internet is known as
e-commerce. E-commerce is the abbreviation for electronic commerce. The massive
development in computer science technology helped the e-commerce sectors to gain such
popularity. Rapid development and modernization in the field of electronics and internet
technologies opened a new scope of profit for commercial organizations. The online
transaction became one of the media for the transaction using the credit cards and debit cards.
The online transaction of e-commerce got a massive boost through the electronic transfer of
money. Thus there is some obvious risk of e-payment. The risk of e-payment includes fraud
transaction and lack of anonymity. Payment security issues can be solved by implementing
various procedures like applying proper encryption to the data present in the database system
or by implementing secure electronic transaction and secure socket layer. Proper verification
of the customer account should be done to control the fraud in e-payment. There are some
business or technical problems for implementing the procedures to neutralize the risk of e-
transfer.

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Table of Contents
Introduction................................................................................................................................4
Discussion..................................................................................................................................5
Literature review....................................................................................................................5
Findings..............................................................................................................................5
The gap in the literature.....................................................................................................5
Critical analysis..................................................................................................................6
Current payment methods in e-commerce.............................................................................6
E-payment using credit or debit cards................................................................................6
E-payment using third-party processors.............................................................................7
Smart card..........................................................................................................................8
Security risk associated with the current payment methods in e-commerce..........................8
E-commerce fraud..............................................................................................................8
Lack of anonymity.............................................................................................................9
Solution for payment security issues......................................................................................9
Proper verification system before transaction..................................................................10
Encryption of data............................................................................................................10
Choosing the correct processor partner............................................................................10
Implementation of Secure Socket Layer..........................................................................10
Implementation of Secure Electronic Transaction...........................................................11
Agreement with Payment Card Industry (PCI)................................................................11
Secure login screen..........................................................................................................11

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Business or technical challenges while solving payment security problems.......................11
The future of information and payment security trends in e-commerce..............................12
Real-time security............................................................................................................12
MasterCard identity checking:.........................................................................................12
Multilayered intelligence.................................................................................................12
Implementation of Artificial Intelligence (AI), Internet of Things (IoT) and
cryptocurrency..................................................................................................................13
Conclusion................................................................................................................................13
References................................................................................................................................14

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Introduction
The commercial transaction which is conducted through electronics medium on the internet
is known as e-commerce. The word e-commerce means electronic commerce. The buying or
selling of any service or product through the internet is the primary purpose of developing an
e-commerce site. Rapid development and modernization in the field of electronics and
internet technologies opened a new scope of profit for commercial organizations. The internet
is accessed by almost 3.8 billion people, which is more than half of the population of this
earth. After the arrival of the World Wide Web (WWE) in 1990,, the concept of e-commerce
came into existence. The first retail transaction done using the internet was not before 1994.
The vast market of the people accessing the internet was targeted by the commercial
organization. The online transaction became one of the media for the transaction using the
credit cards and debit cards. The online transaction of e-commerce got a massive boost
through the electronic transfer of money. With the growing global market, most of the retail
e-commerce websites had to rely hugely on the electronic transfer of money through
electronic banking. The electronic transfer of money through the internet can have some
serious security issues because every data on the internet is vulnerable and can be tampered
by malware. The personal data of the customers can also be leaked by the e-commerce
sectors for their own profit.This report will discuss the payment methods which are used in
the e-commerce sectors recently along with the payment security issues. The safety issues of
critical information about the clients are highlighted in this report.

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Discussion
Literature review
Findings
According to (Laudon & Traver, 2016), the concept of e-commerce came into
existence globally in 1995. E-commerce evolved in a significant manner after the
introduction of smartphones having a touch interface in 2007. This literature paper emphasis
upon the technological, business and social aspect of the e-commerce system along with the
risk which is related to the e-commerce system.
Development in computer science technology and internet made a significant impact
on the success of e-commerce platforms. The retailers saw an excellent opportunity for
advertising and selling their products using the internet and electronic media. Social media
served a perfect platform for advertising the product of the retailers.
The concept of electronic transfer of money opened a new path for the e-commerce
sector. The development of e-banking technology e-transaction was the main reason behind
the success of the e-commerce sector. The major driving forces behind e-commerce sectors
are business strategy and development, along with the innovation in technology.
The current and future technology of the e-commerce sectors is also discussed briefly
in this paper. The security issues regarding the payment of money through the internet is also
discussed in this paper.
The gap in the literature
The paper discussed the various aspect of e-commerce like the technological, business
and social aspect of the e-commerce system along with the risk related to the payment
methods related to the e-commerce sectors. Authors excessively emphasized on the

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technological, business and social aspect of the e-commerce system, leaving the critical topic
of security risk during e-payment in the e-commerce system.
Critical analysis
The paper gave an exceptional view on various aspect of the e-commerce system with
proper justifications, but some important topics about the e-commerce system were left out
by the author. The topic like security risk during the e-payment in the e-commerce system is
also an essential aspect of an e-commerce system. This topic could have been discussed in
details by the authors.
Current payment methods in e-commerce
The payment methods which are used in the e-commerce are mainly cashless, and the
transaction process involves internet banking or electronic transfer of money through the
internet (Grüschow, Kemper & Brettel, 2016). The concept of the electronic payment or
electronic transfer of money became very much popular from the last decade due to the
increased rate of e-banking and e-shopping. There was a huge development in the technology
which involves secured electronic payment.
The most popular and reliable e-payment methods are credit cards and debit cards.
There are also some other methods for e-payment like electronic wallets, a bitcoin wallet and
smart cards. When the customer order anything from any e-commerce organization, they had
to either pay online while buying or they opt for cash on delivery.
E-payment using credit or debit cards
The process of e-payment is very complicated, and there are several steps for
proceeding with the payment. The transaction using a credit or a debit card needs to have e
global card brand account (Bezovski, 2016). The bank of the customer needs to be connected
with the account of card brands like MasterCard, Maestro, Visa and others. While payment,

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the bank assigns a unique code to the customer using which the transaction can be done. The
transaction is done between the bank accounts of the customer and the merchant. The
transaction will be cancelled immediately if the unique code given by the bank to the
customer does not match.
The second step of the e-payment using credit or debit cards is payment gateway
process. The payment gateway process is a special kind of software that connects the bank of
the customer with the e-commerce website of the merchant (Isaac & Zeadally, 2014). The
steps which are followed by this software includes checking the validity of the credit or debit
cards, checking the bank associated with the card, encrypting the numeric values that are
connected with the credit or debit cards and finally sending the reply to the customer about
the transaction (Yang & Lin, 2016). The merchant has to pay the monthly fees or transaction
fees for the online transaction of money using the payment gateway software.
E-payment using third-party processors
Third party processors are the online platforms who acts as a mediator between the bank and
the e-commerce organization. It is a type of application or an online networking site that acts
as a prepaid account. The bank details and other financial data of the customer are stored in
the platform of the third party processors for the faster transaction (Guo & Bouwman, 2016).
These type of third-party processors are known as an e-wallet (electronic wallet). E-wallet
supports the cashless transaction, and these e-wallets need authorization from the customers
in order to transact money from the customer’s bank account to the desired e-commerce
accounts (Varsha, & Thulasiram, 2016). The online transaction using these e-wallets are
mostly secure as they keep all the information about the payment on a different , which is
very secure. According to (Pourghomi, Saeed & Ghinea, 2014) most of the e-wallet
companies uses 128-bit data encryption technology for securing the data of their customers.

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Smart card
The smart card is very much similar to the credit or debit cards, but it has one significant
difference. The significant difference between the credit or debit cards and the smart card is
that the smart card has a small microprocessor chip embedded in the card. The smart card
also has the capability to store some vital personal information of the customers. The smart
card can be accessed by the customers using the unique PIN code (Belanche-Gracia, Casaló-
Ariño & Pérez-Rueda, 2015). Smart cards have greater encryption when compared to debit or
credit cards. The smart cards also have faster-processing speed, and they are also cheap.
Security risk associated with the current payment methods in e-commerce
The current pay methods which are used in e-commerce have some security risks. The
security risks which are associated with the payment methods in e-commerce are discussed
below
E-commerce fraud
The rate of fraud in the payment system of e-commerce organizations are increasing rapidly
(Zhao et al., 2016). The growth rate of the fraud cases involving the payment in the e-
commerce sector is 30% per year. The security system of some smaller e-commerce
organization is not compatible with the highly encrypted payment security system.
Automated computer devices control the payments of the electronic payments systems. The
system can face some issues when a huge amount of payments are processed through that
particular server (Trautman, 2015). The server may face lag issues, and the payment process
of some customers can pause at an intermediate stage.
The computer devices which are responsible for authorizing the payment from the
customer's bank account to the e-commerce organization use some security measures to
control the risk of fraud. The primary authorization requires a password or some security

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question from the customer's end. The authentication process is not always secured, and there
can be a security breach as the system does not check the authenticity of the customer and
will transact the payment if the password is correct.
The encryption of the security system software should be very robust to resist any
fraud cases (Ladan, 2014). The e-commerce merchants sometimes opt for the payment
system, which is not that much secure. This situation can lead to leakage of sensitive data
from the database system of the merchant. The credit card or debit card details can also be
leaked from the system leading to stealing of money from the bank account of the customer.
E-commerce organizations can also be responsible for another kind of fraud. If the
customer is not satisfied with the product, they can demand a refund of the money according
to the norms of that e-commerce organization (Fang et al., 2014). The e-commerce sectors do
not want to refund the money of the customers unless and until there is no alternative. The
customer who generally pays through the internet, have to pay the amount through the net
banking system. The money is deducted from the customer's bank account instantly. If the
product delivered to the customer is not satisfactory, and if the refund policy of the e-
commerce sector is not that effective, then the customer can feel cheated.
Lack of anonymity
The database system of the e-payment third-party processors is filled with the
personal data of the customer. The bank details like credit card details and debit card details
are stored in the database system of the e-payment processors or the e-commerce sectors
(Sivapalan et al., 2014). The data can be leaked from the database system, or the system can
be hacked for obtaining vital information.

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Solution for payment security issues
The solutions for various payment security issues which are discussed above have
various solutions. The solutions for these payment security issues are discussed below.
Proper verification system before transaction
The verification system of the e-commerce organizations or the e-payment
organizations should verify the customer details properly before initiating the transaction.
The e-payment organizations should take additional security measures for checking the
authenticity of the customer (Irshad & Hassan, 2017). The encryption of the data will make
the extraction of data difficult from the system by hackers.
Encryption of data
The personal data of the customer should be encrypted using the proper software to
prevent the leak of data from the system (Wang et al., 2014). The data should be stored in the
secured database system. The database system hired by e-commerce organizations or the e-
payment platform should be authentic and very secure. Compromise in encryption of data can
be profitable for the e-commerce organizations, but the personal data of the customers would
be vulnerable.
Choosing the correct processor partner
The e-commerce organization should choose legal payment processor organizations
as their partner for the transaction. Reputed third-party payment processors should be
preferred by the e-commerce organizations for secured transactions. According to (Rasheed,
2014) the third party payment processor should comply with the standards of Payment Card
Industry Data Security Standards (PCI DSS). The correct partner of the e-commerce
organizations would be able to support the customer problems regarding e-payment.

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Implementation of Secure Socket Layer
Secure Socket Layer (SSL) was designed to prevent the altering of information while
the data is transmitted by the interrelating applications using the internet (Alnatheer, 2014).
The SSL helps to encrypt the transmission of data, and it also helps to authenticate the
message integrity for TCP/IP connections.
Implementation of Secure Electronic Transaction
Secure Electronic Transaction (SET) is a joint initiative by VISA and
MASTERCARD for ensuring the safety of all the parties involved in the transaction of e-
commerce (Sherif, 2016). SET was designed for some special functions like the
authentication of the cardholder or customer and the merchants, maintaining the secrecy of
the payment data of the customers and defining protocols and electronic security service.
Agreement with Payment Card Industry (PCI)
The standard council for the payment card security was formed in 2006 to ensure
safety while transaction (DSS, 2016). The credit card or debit card information should be
kept secret by the merchant according to the council standards.
Secure login screen
Every e-commerce organization have their site. The login page of every e-commerce
organization should have its secured login websites. The secured login websites will help the
customers to maintain privacy.
Business or technical challenges while solving payment security problems
The payment security problems include encryption of data, choosing of correct e-
payment partner and others have some common technical and business challenges. The e-
commerce organization have to bear a huge amount of cost for securing the banking and
personal data of its customers. The maintenance of the database servers needs to be done by a