BT0054- 01

Marks-60
BASICS OF E-COMMERCE

Each question carries equal marks

1. Explain the issues associated with e-Commerce.
Ans: E-commerce is the application of computer and computer networks for modern
business purposes. Or in other words it is the modern business methodology that
addresses the needs of Organizations, Merchants and consumers. In today’s fast
changing digital world even the individual customer can conduct business online
through internet. As information sharing is the major part of the commerce
industries, networking has given boost to e-commerce. Electronic commerce
includes transactions that supports revenue generation, such as generating
demands, offering sales and supports etc. along with the transactions including
buying and selling.

Issues associated with E-commerce: -

In the simple transaction, to purchase a product at a physical shop one
must be satisfied with the brand, price, and quality and after sale support, payment
may be by cash, cheque or credit card. In this type of transaction, both parties are
physically present at a common place. So the mutual trust between the parties can
be established by traditional means. In E-commerce, transactions have to take
place without their (consumer n merchant) physical presence at a common place.
This has given birth to many issues in e-commerce.

o Network security issues – Conducting business Online often result in a

hostile network environment where an organization cannot set or control
security policy. In addition, organizations must be concerned with the inherent
security threats associated with the business over the web, such as
unauthorized user access, data tempering and eavesdropping.
o Message security issues – The customer has to furnish his confidential
information such as credit card number, social security number, and personal
details for any transactions through e-commerce. So to prevent accessing
these important messages by unauthorized user encryption is used. Which is a
cryptographic technology to scramble the data with a key so that no one can
make sense of it while its being transmitted.
o High profile failures :-
 Failure in fulfillment system – A product is ordered and the buyer’s credit
card charged, but no product is delivered.
 Failure in customer service – The complains include failure to ship products,
slowness in contacting card companies, failure to respond to e-mail and
constant busy signals on customer service lines.
 Failure in technology and infrastructure – Connectivity problem due to
higher traffic than expected.
Failure in legal compliance – Violation of export control regulations.
 Failure in fraud control – Many online retailers are experiencing 15% to 40%
fraud rates, which translate directly into bottom line losses.
1
22. Explain the OSI reference model.
33. Write a note on:
1a. Cyber cash
2b. Electronic cheque
4
54. How encryption works? Explain with an example on each.
Ans : Encryption is a cryptographic technology to scramble the data with a key so
that no one can make sense of it while its being transmitted. When data reaches its
destination, the information is unscrambled (decrypted) using same of different
key.
There are two types of crypto systems: secret key and public key. In
secret key cryptography, also referred to as symmetric cryptography, the same
key is used fro both encryption and decryption. The most popular secret key
crypto system in use today is known as DES, the Data Encryption Standard. In
public key cryptography, each user has a public key and private key. The public
key is made public while the private key remains secret. Encryption is performed
with the public key while decryption is done with the private key. The RSA public
key crypto system is the most popular form of public key cryptography. RSA
stands for Rivest, Shamir and Aldeman, the inventors of the RSA cryptosystem.

Both the sender and receiver have to know what set of rules (called
cipher) was used to transform original information in to its cipher text (code) form
– cipher text. Simple cipher might to be add an arbitrary number of characters to
all the character in the message.
Basically encryption has two parts:
• Algorithm – A cryptographic algorithm is a mathematical function.
• Key – string of digits.
Cryptographic algorithm combines the plain text or other intelligible information
with a string of digit called key’s to produce unintelligible cipher text. But some
encryption algorithms does not use a key.

Methods of Encryption: -
There are two methods for encryption: -
• Secret key or symmetric encryption – In this scheme, both the sender and
recipient possess the same key, to encrypt and decrypt the data.
• Public key or asymmetric encryption – This scheme operates on double key called
pair of keys, one of which is used to encrypt the message and the only the other
one in the is used to decrypt. This can be viewed as two part, one part of the key
pair, called private key known by the designated owner, the other part, called the
public key, is published widely but still associated with owner.
6
75. Explain:
1a. Firewalls :
 2b. Proxy server
3c. VPN

BT0054- 02
Marks- 60
BASICS OF E-COMMERCE

Each question carries equal marks

11. Write a note on EDI.
22. Explain the e-Commerce business issues.
33. What is random key seeding? Explain.
44. Explain SKIP.
55. What is Tree based key management? Explain.
66. Explain Flat key management.