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Electronic Commerce

Electronic Commerce. Yong Choi School of Business CSU, Bakersfield. Definition of EC. Electronic commerce (EC) is an emerging concept that describes the buying and selling of products, services and information via and the Internet and computer networks (EDI). E-Business?.

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Electronic Commerce

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  1. Electronic Commerce Yong Choi School of Business CSU, Bakersfield

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

  3. EC vs. Traditional Commerce

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

  5. Why business is interested in EC? • Not just save cost and increase productivity • Paper check Vs. E-check • Change the nature of competition • Etrade.com / Amazon.com • Create new businesses • Citrix.com / Priceline.com

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

  7. E-COMMERCE BUSINESS MODELS 5-7

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

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

  10. ERP Servers Clients Legacy systems Public/External Internet Users Intranet E-mail servers Web servers Firewalls Databases The Intranet (cont.) 10

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

  12. Extranet Consumers Suppliers Enterprise Internet VPN Intranet VPN Remote Employees Intranet Clients VPN VPN VPN Distributors Intranet Intranet Intranet Business Partners The Extranet (cont.)

  13. E-Commerce Security • Cryptography • Encryption and decryption of information • Secret Key (symmetric) Cryptography • Public Key (asymmetric) Cryptography • Digital Signature

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

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

  16. Keysender (= Keyreceiver) Keyreceiver Scrambled Message Scrambled Message Original Message Original Message Internet Sender Receiver Decryption Encryption Secret Key Cryptography (symmetric)

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

  18. Public Keyreceiver Private Keyreceiver Scrambled Message Scrambled Message Original Message Original Message Internet Sender Receiver Public Key Cryptography Mechanism Message

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

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

  21. Private Keysender Public Keysender Scrambled Message Scrambled Message Original Message Original Message Internet Sender Receiver Digital Signature Digital Signature

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