Security problems of e-business and the steps that deal with them

Why security matters in e-business

Of all the concerns an online business faces, security and safety rank first. The reason lies in risk, meaning the likelihood that something goes wrong and leaves a party to the deal worse off, whether in money, in reputation or in peace of mind; such mishaps are more likely online than in face-to-face trade in a physical market. Part of the reason is anonymity. A buyer on the internet often cannot tell who the seller really is, or even where it is operating from, because each side appears to the other only as an online identity, and that makes internet trading riskier.

Security problems in e-business

1. Fraud by false identity and leaks. A fraudster may pose as a genuine customer and transact in that person's name, and confidential data such as a credit card number may leak out.
2. Data storage and transmission risks. Information is exposed both where it is stored and while it travels between systems: it may be stolen or tampered with, whether for selfish ends or simply for fun. Messages can be intercepted on the way, and hacking is a further hazard of the same kind. A virus, which is a program that copies itself onto other computer systems, can at its worst wreck a system completely; short of that, it may damage data files, interrupt normal working or do no more than put an irritating message on the screen.
3. Threats to privacy and intellectual property. The internet is an open space, and material placed on it is no longer private, so stopping others from copying it becomes difficult. Details a customer gives while buying online may be handed on to others, who then flood that customer with promotional material. A student who signs up on one coaching website, for instance, may soon find her inbox full of offers from sellers she has never dealt with.
4. Transaction risks. A deal can break down at any of its three stages. At the money stage, the buyer may say the amount was paid while the seller says nothing was received (default on payment). At the goods stage, the wrong item may arrive, the parcel may go to the wrong address, or nothing may come at all (default on delivery). At the very start, either side may deny that the order existed: the seller saying none was received, or the buyer saying none was placed (default on order taking or giving).

Steps to deal with security problems

• Guard data with anti-virus software. Installing anti-virus programs, keeping them up to date and scanning files and disks with them shields data files, folders and systems against virus attacks.
• Scramble data in transit (cryptography). A message can be encrypted into an unreadable form, called ciphertext; only someone holding the secret key can decrypt it back into its readable form, the plaintext.
• Protect card payments. To stop card details being misused, online stores use encryption technology such as the Secure Sockets Layer. A seller may instead process the card details offline and send the goods only once it has satisfied itself that the buyer's credit limit covers the purchase.
• Verify the parties at each step. Checking a customer's identity and address at registration, and getting authorisation both when the order is confirmed and when the payment is realised, prevents the defaults described above.
• Prefer established marketplaces. Buyers are safer on well-established shopping sites. Such sites protect buyers when goods are not delivered and refund payments up to a point; some even let buyers rate the sellers; and they vouch for who the sellers are, where they operate and how they have served customers before.

A handicraft seller in Jaipur who trades through an online marketplace can apply several of these steps together: it takes payment only through the platform's encrypted gateway, confirms each order and delivery address before dispatch, and keeps its customer records on a password-protected computer that is scanned for viruses every day.

Conclusion

The security problems of e-business arise from distance, anonymity and the open nature of the internet. They cannot be removed altogether, so security and safety stay the most crucial concern of online trade. Verification of the parties, encryption, anti-virus protection and a careful choice of trading sites, used together, reduce them a great deal.