Over the last few years, the real growth of the Internet has been in the area of e-commerce. The proliferation and growth of popular e-commerce web sites like Amazon, Ebay, etc. has led to a rapid increase in the number of monetary transactions happening every day. This, in turn, has driven the need to find newer methods to maintain the security of such web sites.



How business is transacted online

Subscribing to a service

•The user usually fills up an online form with all his/her personal details.

•The form is added to a database.

•The server sends an automatic email to the user to verify the validity of the subscription. This typically includes a password, which the user can change at his first login.

Shopping

•The user usually must be registered on the web site.

•He logs in, and selects the item he/she wants to purchase.

•To pay for it, he uses a credit card or an Internet payment system like PayPal.

•He is asked to confirm his card number by entering the card's verification code.

E-banking

•The user logs in to the bank web site.

•He then is able to make a variety of transactions, like money transfers, stop cheque requests, etc.

Security risks with online transactions

Risks for merchants

•A hacker can gain unauthorised access to a merchant/service provider's customer database, and use it for his own purposes.

•A hacker could be able to modify transaction records and siphon funds.

•A hacker could gain access to all credit card numbers – and their verification codes – and use them illegally.

Risks for customers

•Once a hacker has access to a merchant's database, he could bombard the email addresses in the database with spam.

•A customer could lose money from his bank account. In one case, a man skimmed 10 cents a day from account in a large bank, stealing a large amount of money in the process.

•A customer may find that his credit card is being used illegally for purchases or withdrawals amounting to large numbers.

•With a customer's personal and credit card details, a hacker may be able to commit identity theft.

•A hacker could intercept and divert electronic money transfers.

How to secure your Internet transactions

•Use the latest version of your Internet browser. This is usually updated with the latest security methods. Most browsers use the Secure Sockets Layer (SSL) method. When a key or lock icon appears in the browser status bar, it is an indication that you are browsing a secure web page.

•If you are a merchant, make sure you are using a data encryption package for customers making transactions on your web site. Don't use forms that email their contents to you – there is no protection available for these forms.

•The best security method while dealing with online merchants is common sense.

•Is your merchant an established, well-known retailer?

•Most merchants have a web page that tells customers about the security measures in place on their web site. Read this carefully.

•Use only one credit card for all your online transactions. Even if this card is compromised, your other credit cards are not.

•Do not send cheques or money orders to merchants – pay only by credit card, or cash on delivery.

•Never give out your passwords to anyone.

•Keep records of all your transactions, and watch your credit card bills carefully to make sure.

•All legitimate merchants send you an email after a transaction is completed. Have you received yours?

•Digital certificates from companies like VeriSign authenticate an online transaction. As a merchant, you should sign up for a digital certificate. As a customer, you should look for a certificate before completing your transaction.