1. ECT 455 E-Commerce Web Site Engineering
Electronic Payment Systems
Internet Transaction Security
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2. Agenda Market news Privacy Issues Digital payment Transaction security
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3. Consumer Trust and Privacy
Consumer WebWatch
Only 29% trust Web sites that sell products or services
Sites for commerce: 95% disclosure of all fees; 93% disclosure of the site’s policy on using personal information
News and information sites: 65% disclosure of privacy polices, 59% clear labeling of advertisement
Search engine sites: 60% don’t know about ad sponsorship, 80% want search engines to revel these practices.
57% read policies about credit cards; 35% privacy policies; 22% “About Us”
Consumer WebWatch: “A Matter of Trust: What Users Want From Web Sites” 4/16/02
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4. Internet and the Right to Privacy
Self-regulated medium: The Internet industry governs itself
Violation of Privacy Right or Better Service?
FTC Study: 97% collected personal information, only 62% informed the users about such practice; 57% contained 3rd party tracking devices
Privacy advocates argue that these efforts violate individuals’ privacy rights
Online marketers and advertisers suggest that online companies can better serve their users by recording the likes and dislikes of online consumers
Financial Services Modernization Act of 1999
Establishes a set of regulations concerning the management of consumer information
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5. Network Advertising Initiative (NAI)
Approved by the FTC in July 1999 to support self regulation
NAI currently represents 90 percent of Web advertisers
Determines the proper protocols for managing a Web user’s personal information on the Internet
Prohibits the collection of consumer data from medical and financial sites
Allows the combination of Web-collected data and personal information
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6. DoubleClick: Marketing with Personal Information
Regulation of the Internet could limit a company’s efforts to buy and sell advertising
DoubleClick
Advertising network of over 1,500 sites and 11,000 clients
Abacus Direct Corp
Names, addresses, telephone numbers, age, gender, income levels and a history of purchases at retail, catalog and online stores
Digital redlining
Skewing of an individual’s knowledge of available products by basing the advertisements the user sees on past behavior
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7. Protecting Your Business: Privacy Issues
Privacy policy
The stated policy regarding the collection and use of visitor’s personal information
Privacy policy services and software
PrivacyBot.com; TRUSTe
Core Fair Information Practices by FTC
Consumers should
be made aware that personal information will be collected
have a say in how this information will be used
have the ability to check the information collected to ensure that it is complete and accurate
The information collected should be secured
The Web site should be responsible for seeing that these practices are followed
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8. Electronic Payment Systems
Efficient and effective payment services accepted by consumers and businesses are essential to e-commerce.
Requirements:
Convenient for web purchasing
Transportable over the network
Strong enough to thwart electronic interference
Cost-effective for extremely low-value transactions
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9. Electronic Payment Systems
Banking and Financial Payments
Bank-to-bank transfer (EFT)
Home Banking -- CitiBank, Wells Fargo
Payment through an Intermediary
Open Market *
First Virtual (FirstVirtual Pin) *
* Both refer to their earlier business models
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10. Electronic Payment Systems
Electronic Currency Payment Systems
Electronic Cash -- Internetcash.com
Electronic Checks -- NetCheque
e-Wallets
Smart Cards
American Express (blue smart card)
Visa
Micropayments
Echarge, (echarge.com)
paystone.com
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11. More Retailing Payment Systems
Credit Cards -- Visa or MasterCard
Private Label Credit/Debit Cards
Charge Cards -- American Express; echarge
Peer-to-peer payments (between consumers)
PayPal (billpoint)
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12. Credit-Card Transactions
Popular form of payment for online purchases
Resistance due to security concerns
Many cards offer capabilities for online and offline purchases
Mastercard
American Express Blue
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13. Credit-Card Transaction Enablers
Companies that have established business relationships with financial institutions that will accept online credit-card payments for merchant clients
Trintech
Cybercash (Verisign)
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14. E-Wallets E-wallets Credit-card companies offer a variety of e-wallets
Keep track of your billing and shipping information so that it can be entered with one click at participating sites
Store e-checks, e-cash and credit-card information
Credit-card companies offer a variety of e-wallets
Visa e-wallets
MBNA e-wallet allows one-click shopping at member sites
A group of e-wallet vendors have standardized technology with Electronic Commerce Modeling Language (ECML)
Yahoo Wallet (wallet.yahoo.com)
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15. Digital Currency Digital cash
Stored electronically, used to make online electronic payments
Similar to traditional bank accounts
Used with other payment technologies (digital wallets)
Alleviates some security fears online credit-card transactions
Allows those with no credit cards to shop online
Merchants accepting digital-cash payments avoid credit-card transaction fees
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16. Smart Cards
Smart card
Card with computer chip embedded on its face, holds more information than ordinary credit card with magnetic strip
Contact smart cards
To read information on smart cards and update information, contact smart cards need to be placed in a smart card reader
Contactless smart cards
Have both a coiled antenna and a computer chip inside, enabling the cards to transmit information
Can require the user to have a password, giving the smart card a security advantage over credit cards
Information can be designated as "read only" or as "no access"
Possibility of personal identity theft
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17. Security Considerations: E-commerce v.s. Paper-based Commerce
Security attributes of signed paper document
Semi-permanence of ink embedded in paper fibers
Particular printing process
such as letterhead
Watermarks
Biometrics of signature
Time stamp
Obviousness of modifications, interlineations, and deletions
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18. Security Considerations: E-commerce v.s. Paper-based Commerce
Computer-based document do not have such security attributes
Computer-based records can be modified freely and without detection
Certain supplemental control mechanisms must be applied to achieve a level of trustworthiness comparable to that on paper
Paper-based and computer-based documents may not perform equal or exactly analogous function in business and law
Ex. negotiable document of title
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19. Security Issues in E-Commerce
User Authentication, User Authorization and Network Security
Password protection, encrypted data transmission
Firewalls
Data & Transaction Security
Encryption: Private Key vs. Public Key
Privacy
Payment Systems
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20. Introduction to Secure Ecommerce
What is Security?
What are we securing in ecommerce?
Security is heterogeneous concept in general.
All security, including e-commerce, deals with these 2 KEY concepts:
Risk
Trust
Business risk management
Risk analysis
Risk mitigation
Risk transfer
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21. Security Risks to E-commerce
2004 CSI/FBI Computer Crime and Security Survey
Direct financial loss resulting from fraud
Payment account abuse
Transfer funds without authorization
Destroy or hide financial records
Customer impersonation
Exposure of confidential information
False or malicious websites
Customer Data Exposures
Ex. H&R block erroneously import customers' data into others' tax returns (February 2000)
Data theft
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22. Security Risks to E-commerce
Damage to relations with customer or business partners
An organization that suffers a security-related attack or failure may not publicize it
Unforeseen cost
Legal, public relations, or business resumption cost
Recovering from a security compromise
Public relations damage
Masquerading
Manipulation of web content
Malicious rumor
Uptake failure due to lack of confidence
Security is an essential ingredient of any e-commerce solution
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23. Internet security Consumers entering highly confidential information
Number of security attacks increasing
Four requirements of a secure transaction
Privacy – information not read by third party
Integrity – information not compromised or altered
Authentication – sender and receiver prove identities
Non-repudiation – legally prove message was sent and received
Availability
Computer systems continually accessible
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24. Security Attacks Info source Info destination Info source
Any actions that compromises the security of information systems
Normal flow
Interruption: attack on availability
Info source
Info destination
Info source
Info destination
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25. Security Attacks (continued)
Info source
Info destination
Interception:
Attack on confidentiality
Modification:
Attack on Integrity
Info source
Info destination
Fabrication:
Attack on authenticity
Info source
Info destination
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26. Passive and Active Attacks
Passive attacks: eavesdropping on, or monitoring of, information transmission
Release of message contents
Traffic analysis
Active Attacks: modification or creation of false information
Masquerade: one entity pretends to be a different entity
Ex. Session Hijacking: taking over an existing active session. It can bypass the authentication process and gain access to a machine
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27. Passive and Active Attacks (continued)
Replay: passive capture of a data, retransmission to produce an unauthorized effect
Modification of message: some portion of a legitimate message is altered, or that message are delayed or reordered, to produce an unauthorized effect
Denial of service (DoS): prevents or inhibits the normal use or management of communication facilities
SYN flooding
Winnuke (Perl code of Winnuke)
Unfortunately, there are NO security mechanisms to counter DoS
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28. Key Solutions to Secure Ecommerce Issues
Firewalls
Encryption
Digital signatures and certificates
Payment Systems
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29. Model for Ecommerce Network Security
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30. Firewalls
A filter between a corporate network and the Internet that keeps the corporate network secure from intruders, but allows authenticated corporate users uninhibited access to the Internet
An access policy, more than hardware and software
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31. Types and Functions of Firewalls
Proxy Application Gateways
An application gateway (proxy service), caching documents (Dual-homed vs. Screened-host gateway)
Simple Traffic Logging Systems
Predominant methods; record traffic flows
IP Packet Screening Routers
Filtering or blocking info packets based on screening rules
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32. Dual Home Gateway: Bastion Host Gateway
Bastion Gateway
Internet
Local
Network
Proxies:
Ftp, Http,…
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33. Screen-host Gateway: Screened subnet gateway
Bastion
Gateway
Web server
Internet
Router
Router
Local
Network
Ftp server
Proxies:
Ftp, Http,…
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34. Private Key Cryptography
Secret-key cryptography
Same key to encrypt and decrypt message
Sender sends message and key to receiver
Problems with secret-key cryptography
Key must be transmitted to receiver
Different key for every receiver
Key distribution centers used to reduce these problems
Generates session key and sends it to sender and receiver encrypted with the unique key
Encryption algorithms
Dunn Encryption Standard (DES), Triple DES, Advanced Encryption Standard (AES)
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35. Private (Secret)-key Cryptography
Encrypting and decrypting a message using a symmetric key
                                               
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36. Public Key Cryptography
Asymmetric – two inversely related keys
Private key
Public key
If public key encrypts only private can decrypt and vice versa
Each party has both a public and a private key
Either the public key or the private key can be used to encrypt a message
Encrypted with public key and private key
Proves identity while maintaining security
RSA public key algorithm
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37. Public Key Encryption and Decryption
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38. Encryption & Transaction Security Secret vs. Public Key Encryption
Secret-Key Encryption (single key)
Symmetric encryption, DES
Use a shared secret key for encryption and decryption
Key distribution & disclosure
fast, for bulk data encryption
Public-Key Encryption (Pair of keys)
Asymmetric encryption, RSA (Rivest, Shamin, Adlemann)
Private/Public keys
Need digital certificates and trusted 3rd parties
Slower
For less demanding applications
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39. The Digital Envelope: “The Best of Both Worlds”:
Public Key Encryption
Public Key
of Recipient
Private Key
of Recipient
Session Key
Session Key
Digital Envelope
Session Key
Session Key
Private Key Encryption
Original
Text
Cipher Text
Original
Text
Sender
Recipient
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40. Digital Signatures Digital signature Timestamping
Authenticates sender’s identity
Run plaintext through hash function
Gives message a mathematical value called hash value
Hash value also known as message digest
Collision
Occurs when multiple messages have same hash value
Encrypt message digest with private-key
Send signature, encrypted message (with public-key) and hash function
Timestamping
Binds a time and date to message, solves non-repudiation
Third party, time-stamping agency, timestamps messages
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41. Using a digital signature to validate data integrity
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43. Digital Certificate
A certificate is an electronic document used to identify an individual, a server, a company, or some other entity and to associate that identity with a public key.
Public-key cryptography uses certificates to address the problem of impersonation
Certificate authorities (CAs) are entities that validate identities and issue certificates. They can be either independent third parties or organizations running their own certificate-issuing server software
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44. What is a Certificate Authority?
Trusted third party
Issues and manages certificates
Specific trust domains
Describes relationships between parties
Predefines policies and expectations
Certificates validate memberships in domain
Subscribers agree/depend on practices
Acts as a arbiter of trust in a digital relationship
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45. Digital Certificate A digital certificate includes:
the public key
the name of the entity it identifies
an expiration date
the name of the CA that issued the certificate
a serial number, and other information. Most importantly, a certificate always includes the digital signature of the issuing CA.
The CA's digital signature allows the certificate to function as a "letter of introduction" for users who know and trust the CA but don't know the entity identified by the certificate.
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46. What is a Digital Certificate?
Cryptographically encoded binary file
Binds public key to individual
Notarized by trusted third party
Used to verify digital signature of owner
Used to safely encrypt messages for owner
“Digital ID”
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47. An Illustrative Certificate
Name: “Richard”
Key-Exchange Key:
Signature Key:
Serial #:
Other Data:
Expires: 6/19/02
Signed: CA’s signature
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48. Role of Digital Certificates
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49. Digital Certificate Process Description
CA (Certificate Authority)
Creates certificate with applicant’s public key
Uses its private key to encrypt the certificate
Sends signed certificate to applicant
Wants to send message and asks for signed certificate.
Sends certificate to sender.
Sender
Recipient (applicant)
Sender
Uses public key of CA to decrypt certificate (this ensures the sender
the true identity of the recipient)
After decrypting the CA certificate, the sender uses the embedded
public key of recipient to encrypt message
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50. Public Key Infrastructure, Certificates and Certification Authorities
Public Key Infrastructure (PKI)
Integrates public key cryptography with digital certificates and certification authorities
Digital certificate
Digital document issued by certification authority
Includes name of subject, subject’s public key, serial number, expiration date and signature of trusted third party
Verisign (
Leading certificate authority
Periodically changing key pairs helps security
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51. Digital Signatures & Certificates
Public key encryption
Used for sender authentication
Digital Certificates
Use 3rd party certificate authority (CA) to authenticate the ownership of key
Increased trust
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52. Client Authentication
Password-Based Authentication.
A server might require a user to type a name and password before granting access to the server.
The server maintains a list of names and passwords; if a particular name is on the list, and if the user types the correct password, the server grants access.
Certificate-Based Authentication.
Client authentication based on certificates is part of the SSL protocol.
The client digitally signs a randomly generated piece of data and sends both the certificate and the signed data across the network.
The server uses techniques of public-key cryptography to validate the signature and confirm the validity of the certificate
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53. Client Authentication
Password-Based Authentication.
A server might require a user to type a name and password before granting access to the server.
The server maintains a list of names and passwords; if a particular name is on the list, and if the user types the correct password, the server grants access.
Certificate-Based Authentication.
Client authentication based on certificates is part of the SSL protocol.
The client digitally signs a randomly generated piece of data and sends both the certificate and the signed data across the network.
The server uses techniques of public-key cryptography to validate the signature and confirm the validity of the certificate
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54. Using a password to authenticate a client to a server
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55. Using a certificate to authenticate a client to a server
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56. SET Secure Electronic Transaction
A collection of encryption and security specification used as an industry-wide, open standard for ensuring secure payment transaction over the Internet
A method for interoperability of secure transactions software over multiple, popular hardware platforms and operating systems
Developed by Visa and MasterCard, with GTE, IBM, Microsoft, Netscape, SAIC, Terisa Systems and Verisign.
Based on encryption technology from RSA Data Security.
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57. SET Secure Electronic Transaction
Use digital certificates to authenticate all the parties involved in a transaction
SET-compliant software validates both merchant and cardholder before exchange of information
Employs public-key encryption and digital signature
Complete documentation in visa.com
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58. SET Transaction Flow
The customer interacts with the merchant Web site to select goods for purchase.
The merchant sends an order description that wakes up the customer SET wallet.
The customer checks the order and transmit a payment request back to the merchant’s SET module.
The merchant sends the payment request to the payment gateway.
The payment gateway validates the merchant and the customer and obtains an authorization from the customer’s issuing bank through an interchange network.
The payment gateway sends an order capture token back to the merchant.
The merchant sends a receipt to the customer wallet.
The merchant uses the order capture token to settle the transaction.
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59. Advantages of SET Over Channel Encryption
Participants are authenticated via certificates
Financial institutions provide assurance, not software
SET allows a wallet to clearly distinguish a payment from other uses of web forms
SET prevents terminated merchants from obtaining account information (three party transaction)
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60. 3D Secure Developed by card associations to replace SET.
Does not require client software.
Reduce the requirement s placed on the merchant.
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61. Secure Sockets Layer (SSL)
A transport-level technology for authentication and data encryption between a Web server and a Web browser.
SSL negotiates point-to-point security between a client and a server.
SSL secures the routes of Internet communication, but it does not protect you from unscrupulous or careless people.
Source:
Use Public Key
Do not protect private information.
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62. Secure Sockets layer (SSL)
Uses public-key technology and digital certificates to authenticate the server in a transaction
Protects information as it travels over Internet
Does not protect once stored on receivers server
Peripheral component interconnect (PCI) cards
Installed on servers to secure data for an SSL transaction
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63. SET versus SSL SET SSL Three party protocol Two party protocol
Application protocol
Trust requirement: All participants have been authenticated for a specific role in payment card transaction processing
SSL
Two party protocol
TCP/IP Communication protocol
Trust requirement: communicating with a trustable server
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