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Chapter: 12th Computer Applications : Chapter 17 : E-Commerce Security Systems

Security technologies in E-Commerce transaction

Since a large amount of confidential information are involved in E-Commerce activities it must be transmitted through safe and secured network. Sophisticated security technologies are required to ensure the security of E-Commerce transactions.

Security technologies in E-Commerce transaction

Since a large amount of confidential information are involved in E-Commerce activities it must be transmitted through safe and secured network. Sophisticated security technologies are required to ensure the security of E-Commerce transactions. At present, the security technologies in E-Commerce transactions are roughly classified into

● Encryption technology

● Authentication technology

● Authentication protocols


1. Encryption technology

Encryption technology is an effective information security protection. It is defined as converting a Plaintext into meaningless Ciphertext using encryption algorithm thus ensuring the confidentiality of the data. The encryption or decryption process uses a key to encrypt or decrypt the data. At present, two encryption technologies are widely used. They are symmetric key encryption system and an asymmetric key encryption system.

Symmetric key encryption

The Data Encryption Standard (DES) is a Symmetric key data encryption method. It was introduced in America in the year 1976, by Federal Information Processing Standard (FIPS).

DES is the typical block algorithm that takes a string of bits of cleartext (plaintext) with a fixed length and, through a series of complicated operations, transforms it into another encrypted text of the same length. DES also uses a key to customize the transformation, so that, in theory, the algorithm can only be deciphered by people who know the exact key that has been used for encryption. The DES key is apparently 64 bits, but in fact the algorithm uses only 56. The other eight bits are only used to verify the parity and then it is discarded.

Today, it is considered that DES is not safe for many applications, mainly because of its relatively smaller key size (56-bit).

Asymmetric or Public key encryption

Asymmetric encryption also called as RSA (Rivest-Shamir-Adleman) algorithm.

It uses public-key authentication and digital signatures. Until 1970s, there were only symmetric cryptosystems in which transmitter and receiver must have the same key. This raises the problem of key exchange and key management. Unlike a symmetric encryption, the communicating parties need not know other’s private-key in asymmetric encryption. Each user generates their own key pair, which consists of a private key and a public key. A public-key encryption method is a method of converting a plaintext with a public key into a ciphertext from which the plaintext can be retrieved with a private key.

Symmetric Key Encryption

1. Same key is used for both encryption and decryption

2. Speed of encryption or decryption is very fast

3. Plain text and cipher text are of same size

4. Algorithms like DES, AES, RC4 uses symmetric key encryption

5. Provides confidentiality

6. The number of key used grows exponentially with the number of users

Asymmetric Key Encryption

1. Different keys are used for encryption and decryption

2. Speed of encryption or decryption is comparatively slow

3. The size of cipher text is always greater than plain text.

4. Algorithms like RSA, ECC, DSA use asymmetric key encryption

5. Provides confidentiality, authenticity and non-repudiation

6. The number of key used grows linearly with the number of users

In 1976, Whitfield Diffie and Martin e. Hellman, devised an algorithm called public key encryption. The algorithm can be understood using color game. This how could “A” and “B” get a secret key without letting “C” finding it out. The trick is based on 2 facts

● It is easy to mix 2 colors together to get 3rd color

Given a mixed color it’s hard to reverse it in order to find the exact original colors

1. First A and B agree publicly on a starting color (yellow)

2. Now A select a random colour (red) mix it with yellow and send new color (yellow+red=orange) to B.

3. Similarly B selects a random colour (blue) mix it with yellow and send new colour (yellow+blue=green) to A.

4. Hacker “C” may have two new colours (orange) and (green) but not the A’s (red) or B’s (blue) private colours.

5. After interchanging colors, A adds his own private (red) to B’s mixture (green) and arrive at a third secret colour(black).

6. Also B adds his own private (blue) to A’s mixture (orange) and arrive at a same third secret color (black).

7. C is unable to have the exact color (black), since C needs one of the private color to do so.


2. Authentication Technology

The main role of security certification is to ensure Authentication, Integrity and Non-repudiation. This can be achieved through digital signatures and digital certificates.

Digital certificates

A digital certificate (also known as public key certificate) is an electronic document used to prove the ownership of a public key. This certificate includes the information about the sender’s identity, digital signature and a public key.

A digital certificate function is similar to the function of identification cards such as passports and driving licenses. Digital certificates are issued by recognized Certification Authorities (CA). When someone requests a digital certificate, the authority verifies the identity of the requester, and if the requester fulfills all requirements, the authority issues it. When the sender uses a certificate to sign a document digitally, receiver can trust the digital signature because he trusts that CA has done their part verifying the sender’s identity.

Common digital certificate systems are X.509 and PGP.

● Pretty Good Privacy (PGP): Phil Zimmermann developed PGP in 1991. It is a decentralized encryption program that provides cryptographic privacy and authentication for data communication. PGP encryption uses a serial combination of hashing, data compression, symmetric-key cryptography and asymmetric-key cryptography and works on the concept of “web of trust”.

● The X.509 system is a centralized system in which the authenticity of the key is guaranteed by the hierarchy of certification authorities formally certifying the key relationship with the identity of its owner. Due to its clear responsibility, it is easier to implant in the law, X.509 is currently world wide accepted certification technology.

The digital certificate are being  issued by a licensed Certifying Authority (CA). NIC, Safescript, TCS MTNL, e-Mudhra are some of the authorized Certifying Authorities under Government of India.

Digital signature

A digital signature is a mechanism that is used to verify that a particular digital document, message or transaction is authentic.

It provides the receiver the guarantee that the message was actually generated by the sender. It also confirms that the information originated from the signer and has not been altered by a cracker in the middle. Digital signatures can provide the added assurances of evidence to the origin, identity and status, as well as acknowledging the consent of the sender.

Digital signatures use a standard, worldwide accepted format, called Public Key Infrastructure (PKI), to provide the highest levels of security and universal acceptance. In many countries, digital signatures have the same legal significance as the traditional forms of signed documents. Digital signatures are widely used for avoiding forging or tampering of important documents such as financial documents or credit card data.

A security token is a hardware component that are used to identify and authenticate users.

Digital signature

1. A digital signature is a mechanism that is used to verify that a particular digital document, message or transaction is authentic.

2. Digital signatures are used to verify the trustworthiness of the data being sent

3. Digital signature is to ensure that a data remain secure from the point it was issuedand it was not modified by a third party.

4. It provides authentication, non-repudiation and integrity

5. A digital signature is created using a Digital Signature Standard (DSS). It uses a SHA-1 or SHA-2 algorithm for encrypting and decrypting the message.

6. The document is encrypted at the sending end and decrypted at the receiving end using asymmetric keys. 

Digital certificate

1. A digital certificate is a computer file which officially approves the relation between the holder of the certificate and a particular public key.

2. Digital certificates are used to verify the trustworthiness of the sender.

3. Digital certificate binds a digital signature to an entity

4. It provides authentication and security.

5. A digital certificate works on the principles of public key cryptography standards (PKCS). It creates certificate in the X.509 or PGP format.

6. A digital certificate consist of certificate's owner name and public key, expiration date, a Certificate Authority 's name , a Certificate Authority's digital signature 


3. Authentication protocols

At present, there are two kinds of security authentication protocols widely used in E-Commerce, namely Secure Electronic Transaction (SET) and Secure Sockets Layer (SSL).

Secure Electronic Transaction

Secure Electronic Transaction (SET) is a security protocol for electronic payments with credit cards, in particular via the Internet. SET was developed in 1996 by VISA and MasterCard, with the participation of GTE, IBM, Microsoft and Netscape.

The implementation of SET is based on the use of digital signatures and the encryption of transmitted data with asymmetric and symmetric encryption algorithms. SET also use dual signatures to ensure the privacy.

The SET purchase involves three major participants: the customer, the seller and the payment gateway. Here the customer shares the order information with the seller but not with the payment gateway. Also the customer shares the payment information only with the payment gateway but not with the seller. So, with the SET, the credit card number may not be known to the seller and will not be stored in seller’s files also could not be recovered by a hacker.

The SET protocol guarantees the security of online shopping using credit cards on the open network. It has the advantages of ensuring the integrity of transaction data and the non -repudiation of transactions. Therefore, it has become the internationally recognized standard for credit card online transaction.

SET system incorporates the following key features:

● Using public key encryption and private key encryption ensure data confidentiality.

● Use information digest technology to ensure the integrity of information.

● Dual signature technology to ensure the identity of both parties in the transaction

Secure Sockets Layers

The most common Cryptographic protocol is Secure Sockets Layers (SSL). SSL is a hybrid encryption protocol for securing transactions over the Internet. The SSL standard was developed by Netscape in collaboration with MasterCard, Bank of America, MCI and Silicon Graphics. It is based on a public key cryptography process to ensure the security of data transmission over the internet. Its principle is to establish a secure communication channel (encrypted) between a client and a server after an authentication step.

The SSL system acts as an additional layer, to ensure the security of data, located between the application layer and the transport layer in TCP. For example, a user using an internet browser to connect to an SSL secured E- Commerce site will send encrypted data without any more necessary manipulations. Secure Sockets Layers (SSL) was renamed as Transport Layer Security (TLS) in 2001. But still it is popularly known under the name SSL. TLS differs from SSL in the generation of symmetric keys.

Today, all browsers in the market support SSL, and most of the secure communications are proceeded through this protocol. SSL works completely hidden for the user, who does not have to intervene in the protocol. The only thing the user has to do is make sure the URL starts with https:// instead of http:// where the “s” obviously means secured. It is also preceded by a green padlock.

3D Secure

“3- D Secure is a secure payment protocol on the Internet. It was developed by Visa to increase the level of transaction security, and it has been adapted by MasterCard. It gives a better authentication of the holder of the payment card, during purchases made on websites. The basic concept of this (XML-based) protocol is to link the financial authorization process with an online authentication system. This authentication model comprise 3 domains (hence the name 3D) which are:

1. The Acquirer Domain

2. The Issuer Domain

3. The interoperability Domain

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12th Computer Applications : Chapter 17 : E-Commerce Security Systems : Security technologies in E-Commerce transaction |

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