Security and Regulation in online Shopping Websites

1. Background of the Report

Being a part of the increasingly digitised world, retailers have begun to embrace Internet as the new transaction platform for businesses, profiting from its ever-shrinking entry and operating costs. E-commerce allows retailers to reach out to customers without the need for any physical stores, which essentially brought about a myriad of ethical and moral concerns. A report by Avira in September 2011 shows that only 15% of consumers feel entirely secured when making purchases online. This report thus aims to explore the various security threats of E-commerce and seek to find solutions to address them.

2. Introduction to Online Shopping

2.1 Types of Online Shopping Transactions, Payment Systems

The emergence of e-commerce brought about demand for alternative non-cash payment methods. Credit and debit card transactions remained as the primary e-commerce transaction payment tool for many markets, where it accounted for 40% of online purchases in North America and Europe. Online stored value payment systems, such as Paypal, allow consumers to purchase without losing their personal credit information. Other popular payment channels include internet banking online transfers, digital checking payment systems and usage of Electronic Billing Presentment and Payment (EBPP) systems or digital accumulating balance payment systems to make post-purchase micropayments.

2.2 Dimensions of Website Security

With the U.S. e-commerce sales topping US$165.4 billion in 2010, emphasis must be placed to safeguard the interest of the buyers, merchants and all other third parties involved. Hence, consumers should watch out for the following dimensions of website security to lower the risk of falling into security traps.

Integrity, the ability to ensure that critical information has not been altered in any way by an authorized party. Non-repudiation, the denial of rights for e-commerce participants to refute their online actions, giving parties sufficient verification information to pinpoint the specific person responsible for his online act. Authenticity, being able to identify the identity of a person or entity with whom you are dealing, preventing misrepresentation, deceiving by any parties. Confidentiality ensures that messages and data committed are available only to those who are authorized to view them, and privacy controls the use of such information. Lastly, availability ensures that the e-commerce site remains operational and buyers or third parties involved in the transaction can reach out to the merchants when required.

3. Security Issues of Online Shopping

With the rapid evolution of cyber crimes, fraud cases can happen to customers, retailers and third party service providers anytime.