E-Commerce Security and Payment Systems

Case Study

1.     What is the value proposition that Apple Pay offers consumers?How about merchants?

a.     The value that Apple Pay offer to their customer and merchants are the elimination of the need to transfer the customerís credit card information to a third party merchant. Apple Pay provides the added security of transactions by incorporating a fingerprint reader on the userís device. Data inscription add an additional level of security and Apple pay offers insurance to credit card companies to add protection for fraudulent charges.

2.     What are some of the limitations of Apple Pay that might prevent its widespread adoption?

a.     The main limitation in regards to the widespread adoption of Apple Pay is the requirement of the user to own an Apple device. Merchants are also required to obtain additional hardware to process Apple Pay transactions.

3.     What advantages do the Square and PayPal mobile card-swiping solutions have in the mobile payment market?What are their weaknesses?

a.     The advantages of payment processing solutions such as Square and PayPal are they allow anyone with a tablet or smartphone to process online payments. A weakness to this solution is the user is required to buy additional hardware to process transactions.

4.     What strategies would you recommend that Apple pursue to assure widespread consumer adoption of Apple Pay?

a.     I would suggest to Apple find a way to allow users to process payments without requiring users to own an Apple device. Apple could develop an application that would run on Android and Windows devices to allow them to increase their share of the mobile payment market.

Chapter Questions

1.     Why is it less risky to steal online?Explain some of the ways criminals deceive consumers and merchants

a.     Stealing online allows criminals to remain anonymous and lowers the risk of being caught when compared to walking into a bank and robbing the establishment. Criminals are able to deceive customers and merchants by placing fraudulent online orders, stealing information, and using viruses and malware to shutdown e-commerce sites.

5.     Name the major points of vulnerability in a typical online transaction.

a.     The major points of vulnerability in a typical online transaction are client, sever, and internet communications.

††† 10. Briefly explain how public key cryptography works.

a. The textbook describes cryptography as, ďThe sender encrypts a message using the recipientís public key, and then sends it over the Internet.The only person who can decrypt this message is the recipient, using his or her private key.However, this simple case does not ensure integrity or an authentic message.Ē

††† 15. Briefly discuss the disadvantages of credit cards as the standard for online payments.How does requiring a credit card for payment discriminate against some consumers?

††††††††††† †††† a. The advantages of using a credit card for transactions is they provide an additional level of security. I feel individuals could be discriminated against if they are younger or lower income because usually those individuals do not typically have credit cards.

††† 20. How are the two main types of EBPP systems both alike and different from each other?

††††††††††† †††† a. The two main types of EBPP are both payment systems. One is used for direct in-house transactions and the other is a consolidator model through financial institutions.


Project Question

1.     Imagine you are the owner of an e-commerce Web site. What are some of the signs that your site has been hacked? Discuss the major types of attacks you could expect to experience and the resulting damage to your site.

a.     Some of the signs that your e-commerce site is being hacked, attacked, or compromised are distributed denial of service attacks, fraudulent orders and transactions, and orders placed with stolen user information. The damages could include but not limited to loss of business, customers losing faith in your organization, and going out of business as a result of the attacks.