This document discusses e-commerce security. It begins by defining cyber security and its goals of reducing risk from cyber attacks and protecting systems from unauthorized access. It then discusses dimensions of e-commerce security including integrity, non-repudiation, authenticity, confidentiality, privacy, and availability. The document outlines the most common security threats such as malicious code, phishing, hacking, data breaches, and denial of service attacks. It provides details on specific threats and how they compromise systems. In closing, it briefly mentions additional threats like sniffing, insider attacks, and social media/mobile platform security issues.

1. E-commerce Security

2. Cyber Security
• Cyber security is the
application of technologies,
processes, and controls to
protect systems, networks,
programs, devices and data
from cyber attacks.
• It aims to reduce the risk of
cyber attacks and protect
against the unauthorized
exploitation of systems,
networks, and technologies.
• Security is an essential part of
any transaction that takes
place over the internet.

3. What Is Good E-commerce Security?
• New technologies
• Organizational policies and procedures
• Industry standards and government laws
To achieve highest degree of security
• Time value of information
• Cost of security vs. potential loss
• Security often breaks at weakest link
Other factors

4. What Is Good E-commerce Security?
Good ecommerce security requires a set of laws,
procedures, policies and technologies that to the extent
feasible, protect individuals and organizations from the
unexpected behaviour in the ecommerce marketplace.

5. Dimensions of e-commerce security
● Integrity
● Non-Repudiability
● Authenticity
● Confidentiality
● Privacy
● Availability

6. Integrity
● Integrity refers to the ability to ensure that information
being displayed on a Web site, or transmitted or received
over the Internet, has not been altered in any way by an
unauthorized party.
● Example: If an unauthorized person intercepts and changes
the contents of an online communication, such as by
redirecting a bank wire transfer into a different account, the
integrity of the message has been compromised because the
communication no longer represents what the original
sender intended.

7. Nonrepudiation
● Nonrepudiation refers to the ability to ensure that e-commerce participants do
not deny (i.e., repudiate) their online actions.
● It is the protection against the denial of order or denial of payment. Once a
sender sends a message, the sender should not be able to deny sending the
message. Similarly, the recipient of message should not be able to deny the
receipt.
● For instance, the availability of free e-mail accounts with alias names makes it
easy for a person to post comments or send a message and perhaps later deny
doing so.
● Even when a customer uses a real name and e-mail address, it is easy for that
customer to order merchandise online and then later deny doing so.
● In most cases, because merchants typically do not obtain a physical copy of a
signature, the credit card issuer will side with the customer because the
merchant has no legally valid proof that the customer ordered the
merchandise.

8. Authenticity
● Authenticity refers to the ability to identify the identity of a
person or entity with whom you are dealing on the Internet.
● There should be a mechanism to authenticate a user before
giving him/her an access to the required information.

9. Confidentiality
● Confidentiality refers to the ability to ensure that messages and data are
available only to those who are authorized to view them.
Privacy
● privacy, which refers to the ability to control the use of information a
customer provides about himself or herself to an e-commerce merchant.
● E-commerce merchants have two concerns related to privacy. They must
establish internal policies that govern their own use of customer information, and
they must protect that information from illegitimate or unauthorized use.
For example, if hackers break into an e-commerce site and gain access to credit card
or other information, this violates not only the confidentiality of the data, but also the
privacy of the individuals who supplied the information.

10. Availability
● Availability refers to the ability to ensure that an
e-commerce site continues to function as intended.
● Data should be recorded in such a way that it can be audited
for integrity requirements.

11. Security Threats in the
E-commerce Environment
• Three key points of
vulnerability in
e-commerce
environment:
1. Client
2. Server
3. Communications
pipeline (Internet
communications
channels)

12. A Typical E-commerce Transaction
Figure 5.2, Page 256
Copyright © 2014 Pearson Education, Inc.
Publishing as Prentice Hall
Slide 5-12

13. Vulnerable Points in an E-commerce
Transaction
Figure 5.3, Page 257
Copyright © 2014 Pearson Education, Inc.
Publishing as Prentice Hall
Slide 5-13
There are three major vulnerable points in e-commerce
transactions: Internet communications, servers, and clients.

14. Most Common Security Threats in the
E-commerce Environment
Types of Malicious Code
• Malicious code (malware,
exploits)
– Drive-by downloads
– Viruses
– Worms
– Ransomware
– Trojan horses
– Backdoors
– Bots, botnets
– Threats at both client
and server levels

15. Malicious code
• A drive-by download is malware that comes with a downloaded file that a
user intentionally or unintentionally requests.
• A virus is a computer program that has the ability to replicate or make
copies of itself and spread to other files.
• Viruses are often combined with a worm. Instead of just spreading from
file to file, a worm is designed to spread from computer to computer. A
worm does not necessarily need to be activated by a user or program in
order for it to replicate itself.
• Ransomware (scareware) is a type of malware (often a worm) that locks
your computer or files to stop you from accessing them.

16. Malicious code (Trojan Horses)
• The term Trojan horse refers to the huge wooden horse in
Homer’s Iliad that the Greeks gave their opponents, the Trojans—a gift
that actually contained hundreds of Greek soldiers. Once the people of
Troy let the massive horse within their gates, the soldiers revealed
themselves and captured the city.
• In today’s world, a Trojan horse may masquerade as a game, but actually
hide a program to steal your passwords and e-mail them to another
person.
• A Trojan horse appears to be benign, but then does something other than
expected. The Trojan horse is not itself a virus because it does not
replicate but is often a way for viruses or other malicious code such as
bots or rootkits (a program whose aim is to subvert control of the
computer’s operating system) to be introduced into a computer system.

17. Malicious code cont…
• A backdoor is a feature of viruses, worms, and Trojans that allows
an attacker to remotely access a compromised computer.
• Bots (short for robots) are a type of malicious code that can be
secretly installed on your computer when attached to the
Internet.
• Botnets are collections of captured computers used for malicious
activities such as sending spam, participating in a DDoS attack,
stealing information from computers, and storing network traffic
for later analysis.

18. Most Common Security Threats (cont.)
• Potentially Unwanted Programs
(PUPs) (program that installs itself
in a computer, typically without
the user’s informed consent)
– Browser parasites
– Adware
– Spyware
• Phishing
– Social engineering
– E-mail scams
– Spear-phishing
– Identity fraud/theft

19. Potentially Unwanted Programs (PUPs)
• PUPs install themselves on a computer, such
as rogue security software, typically without
the user’s informed consent. Ex. Adware,
Browser parasites, Spyware etc.
• Adware is typically used to call for pop-up
ads to display when the user visits certain
sites.
• Browser parasite is a program that can
monitor and change the settings of a user’s
browser, for instance, changing the
browser’s home page, or sending
information about the sites visited to a
remote computer.
• Spyware can be used to obtain information
such as a user’s keystrokes, copies of e-mail
and instant messages, and even take
screenshots (and thereby capture passwords
or other confidential data).

20. Most Common Security Threats (cont.)
• Social engineering relies on human curiosity, greed, and gullibility in order
to trick people into taking an action that will result in the downloading of
malware.
• Phishing is any deceptive, online attempt by a third party to obtain
confidential information for financial gain. Phishing attacks typically do not
involve malicious code but instead rely on straightforward
misrepresentation and fraud, so-called “social engineering” techniques.
• One of the most popular phishing attacks is the e-mail scam letter. The
scam begins with an e-mail: a rich former oil minister of Nigeria is seeking a
bank account to stash millions of dollars for a short period of time, and
requests your bank account number where the money can be deposited. In
return, you will receive a million dollars. This type of e-mail scam is
popularly known as a “Nigerian letter” scam.
• Thousands of other phishing attacks use other scams, some pretending to
be eBay, PayPal, or Citibank writing to you for “account verification” (known
as “spear phishing,” or targeting a known customer of a specific bank or
other type of business). Click on a link in the e-mail and you will be taken to
a Web site controlled by the scammer, and prompted to enter confidential
information about your accounts, such as your account number and PIN
codes.

21. Most Common Security Threats (cont.)
Hacking
• Hackers and crackers
• Types of hackers: White, black, grey hats
• Hacktivism
Cybervandalism:
• Disrupting, defacing, destroying Web site
Data breach
• Losing control over corporate information to outsiders

22. Most Common Security Threats (cont.)
• Hacker is an individual who intends to gain
unauthorized access to a computer system.
• Cracker is used to denote a hacker with criminal
intent, although in the public press, the terms hacker
and cracker tend to be used interchangeably.
• In the past, hackers and crackers typically were
computer experts excited by the challenge of breaking
into corporate and government Web sites. Sometimes
they were satisfied merely by breaking into the files of
an e-commerce site.
• Today, hackers have malicious intentions to disrupt,
deface, or destroy sites (cybervandalism) or to steal
personal or corporate information they can use for
financial gain (data breach).
• Hacktivism adds a political twist. Hacktivists typically
attack governments, organizations, and even
individuals for political purposes, employing the tactics
of cyber vandalism, distributed denial of service
attacks, data thefts, doxing (gathering and exposing
personal information of public figures, originating from
the term “documents” or “docx”), and more.

23. Most Common Security Threats (cont.)
• Groups of hackers called tiger teams are sometimes used by corporate security
departments to test their own security measures. By hiring hackers to break into
the system from the outside, the company can identify weaknesses in the
computer system’s armor.
• These “good hackers” are known as white hats because of their role in helping
organizations locate and fix security flaws. White hats do their work under
contract, with agreement from clients.
• Black hats are hackers who engage in the same kinds of activities but without pay
or any buy-in from the targeted organization, and with the intention of causing
harm. They break into Web sites and reveal the confidential or proprietary
information. These hackers believe strongly that information should be free, so
sharing secret information is part of their mission.
• Grey hats are hackers who believe they are pursuing some greater good by
breaking in and revealing system flaws. Grey hats discover weaknesses in a
system’s security, and then publish the weakness without disrupting the site or
attempting to profit from their finds. Their only reward is the prestige of
discovering the weakness.
• Grey hat actions are suspect, however, especially when the hackers reveal
security flaws that make it easier for other criminals to gain access to a system.

24. Data Breach
• Occurs whenever organizations lose
control over corporate information to
outsiders.
• According to Symantec, data about more
than 230 million people were exposed in
2011 as a result of data breaches.
• Breaches caused by hacker attacks were
responsible for exposing more than 187
million identities.
• Significant breaches that did occur
included a data breach at Zappos.com
that affected 24 million customers, the
compromise of a payment processor for
Visa and Mastercard, and a breach at
LinkedIn, exposing the data of 6.5 million
members.

25. Most Common Security Threats (cont.)
• Credit card fraud/theft
• Spoofing and pharming
• Spam (junk) Web sites (link farms)
• Identity fraud/theft
• Denial of service (DoS) attack
– Hackers flood site with useless traffic to overwhelm
network
• Distributed denial of service (DDoS) attack
Copyright © 2014 Pearson
Education, Inc. Publishing as
Prentice Hall
Slide 5-25

26. Credit card fraud/theft
• Theft of credit card data is one of the most feared occurrences on the
Internet.
• Fear that credit card information will be stolen prevents users from making
online purchases in many cases.
• Incidences of stolen credit card information are much lower than users think,
around 0.8% of all online card transactions (CyberSource, 2013)
• Online credit card fraud is twice as common as offline card fraud.
• In the past, the most common cause of credit card fraud was a lost or stolen
card that was used by someone else, followed by employee theft of
customer numbers and stolen identities (criminals applying for credit cards
using false identities).
• But today, the most frequent cause of stolen cards and card information is
the systematic hacking and looting of a corporate server where the
information on millions of credit card purchases is stored.

27. Spoofing and pharming
• Spoofing involves attempting to hide a true identity by using someone else’s
e-mail or IP address. For instance, a spoofed e-mail will have a forged sender
e-mail address designed to mislead the receiver about who sent the e-mail.
• IP spoofing involves the creation of TCP/IP packets that use someone else’s
source IP address, indicating that the packets are coming from a trusted host.
• Most current routers and firewalls can offer protection against IP spoofing.
• Spoofing a Web site sometimes involves pharming, automatically redirecting
a Web link to an address different from the intended one, with the site
masquerading as the intended destination.
• Links that are designed to lead to one site can be reset to send users to a
totally unrelated site—one that benefits the hacker.
• Although spoofing and pharming do not directly damage files or network
servers, they threaten the integrity of a site.
• For example, if hackers redirect customers to a fake Web site that looks
almost exactly like the true site, they can then collect and process orders,
effectively stealing business from the true site.
• In addition to threatening integrity, spoofing also threatens authenticity by
making it difficult to discern the true sender of a message.

28. Spam (junk) Web sites (link farms)
• Spam (junk) Web sites (also sometimes referred to as link farms) are
sites that promise to offer some product or service, but in fact are
just a collection of advertisements for other sites, some of which
contain malicious code.
• For instance, you may search for “[name of town] weather,” and then
click on a link that promises your local weather, but then discover
that all the site does is display ads for weather-related products or
other Web sites.
• Junk or spam Web sites typically appear on search results, and do not
involve e-mail.
• These sites hides their identities by using domain names similar to
legitimate firm names, and redirect traffic to known
spammer-redirection domains.

29. Identity fraud/theft
• Identity fraud involves the unauthorized
use of another person’s personal data,
such as social security, driver’s license,
and/or credit card numbers, as well as
user names and passwords, for illegal
financial benefit
• Criminals can use such data to obtain
loans, purchase merchandise, or obtain
other services, such as mobile phone or
other utility services
• Cybercriminals employ many of the
techniques described previously, such as
spyware, phishing, data breaches, and
credit card theft, for the purpose of
identity fraud.

30. Denial of service (DoS) attack
• In a Denial of Service (DoS) attack,
hackers flood a Web site with useless
pings or page requests that inundate
and overwhelm the site’s Web servers.
• DoS attacks involve the use of bot
networks and so-called “distributed
attacks” built from thousands of
compromised client computers.
• DoS attacks typically cause a Web site
to shut down, making it impossible for
users to access the site.
• For busy e-commerce sites, these
attacks are costly; while the site is shut
down, customers cannot make
purchases.

31. Distributed denial of service (DDoS) attack
• Distributed Denial of Service (DDoS) attack
uses hundreds or even thousands of
computers to attack the target network from
numerous launch points.
• DoS and DDoS attacks are threats to a
system’s operation because they can shut it
down indefinitely.

32. Most Common Security Threats (cont.)
• Sniffing
– Eavesdropping program that monitors information
traveling over a network
• Insider attacks
• Poorly designed server and client software
• Social network security issues
• Mobile platform security issues
– Vishing, smishing, madware
• Cloud security issues

33. Sniffing
• A sniffer is a type of eavesdropping
program that monitors information
traveling over a network.
• When used legitimately, sniffers
can help identify potential network
trouble-spots, but when used for
criminal purposes, they can be
damaging and very difficult to
detect.
• Sniffers enable hackers to steal
proprietary information from
anywhere on a network, including
passwords, e-mail messages,
company files, and confidential
reports.
• E-mail wiretaps are a variation on
the sniffing threat.

34. Insider attacks
• The largest financial threats to business
institutions come not from robberies
but from embezzlement by insiders.
• Bank employees steal far more money
than bank robbers.
• In e-commerce sites, some of the
largest disruptions to service,
destruction to sites, and diversion of
customer credit data and personal
information have come from
insiders—once trusted employees.
• Employees have access to privileged
information, and, in the presence of
sloppy internal security procedures,
they are often able to roam throughout
an organization’s systems without
leaving a trace.

35. Poorly designed server and client software
• Many security threats prey on poorly
designed server and client software,
sometimes in the operating system and
sometimes in the application software,
including browsers.
• The increase in complexity and size of
software programs, coupled with
demands for timely delivery to
markets, has contributed to an increase
in software flaws or vulnerabilities that
hackers can exploit.
• For instance, SQL injection attacks take
advantage of vulnerabilities in poorly
coded Web application software that
fails to properly validate or filter data
entered by a user on a Web page to
introduce malicious program code into
a company’s systems and networks.

36. Technology Solutions
• Protecting Internet
communications
– Encryption
• Securing channels of
communication
– SSL, VPNs
• Protecting networks
– Firewalls
• Protecting servers and
clients

37. Tools Available to Achieve Site Security

38. Encryption
• Encryption
– Transforms Plain text or data into
cipher text readable only by
sender and receiver
– Secures stored information and
information transmission
– Provides 4 of 6 key dimensions of
e-commerce security:
• Message integrity
• Nonrepudiation
• Authentication
• Confidentiality
● The transformation of plain text to
cipher text is accomplished by using a
key or cipher.
● A key (or cipher) is any method for
transforming plain text to cipher text.

39. Different Cipher
• In a substitution cipher, every occurrence of a given letter is
replaced systematically by another letter.
• Example :
Cipher : letter plus two (replace every letter in a
word with a new letter two places forward)
Plain Text : Hello Cipher text: JGNNQ
• In a transposition cipher, the ordering of the letters in each word
is changed in some systematic way.
• Example, Leonardo Da Vinci recorded his shop notes in reverse
order, making them readable only with a mirror.
Plain Text: Hello Cipher Text : OLLEH

40. Symmetric Key Encryption Or secret key encryption
● In order to decipher the encrypted messages, the receiver would have to know the
secret cipher that was used to encrypt the plain text.
● Both the sender and the receiver use the same key to encrypt and decrypt the
message. They have to send it over some communication media or exchange the key in
person.
● Symmetric key encryption was used extensively throughout World War II and is still a
part of Internet encryption.
● Flaws of simple Substitution and Transposition ciphers :
1. In the digital age, computers are so powerful and fast that these ancient
means of encryption can be broken quickly.
2. In order to share the same key, they must send the key over a presumably
insecure medium where it could be stolen and used to decipher messages.
3. in commercial use, where we are not all part of the same team, a secret key
is needed for each of the parties in transaction.

41. Symmetric Key Encryption Or secret key encryption
• The strength of modern security protection is measured in terms of the length of the
binary key used to encrypt the data.
• Modern digital encryption systems use keys with 56, 128, 256, or 512 binary digits.
• Algorithms for Symetric Key encryption: DES, AES
Data Encryption Standard (DES) Advanced Encryption Standard (AES)
● Developed by the National
Security Agency (NSA) and IBM
in the 1950s.
● DES uses a 56-bit encryption
key.
● To cope with much faster
computers, it has been
improved by Triple
DES—essentially encrypting the
message three times, each with
a separate key.
● The most widely used
symmetric key encryption
algorithm nowadays.
● Offers key sizes of 128, 192,
and 256 bits.
● There are also many other
symmetric key systems that are
currently less widely used, with
keys up to 2,048 bits.

42. Public Key Encryption
● Public key
cryptography solves
the problem of
exchanging keys.
● The mathematical
algorithms used to
produce the keys are
one-way functions (Ex.
one-way irreversible
mathematical
function).
● The keys are
sufficiently long (128,
256, and 512 bits)
Sender uses recipient’s public key to
encrypt message; recipient uses
private key to decrypt it
Once key used to encrypt message,
same key cannot be used to decrypt
message
Both keys used to encrypt and decrypt
message
Uses two mathematically related
digital keys
Public key (widely
disseminated)
Private key (kept
secret by owner)

43. Insight on Business: Class Discussion
Public Key Cryptography: A Simple Case

44. Public Key Encryption using Digital Signatures and Hash Digests
• In public key encryption, although we can be
quite sure the message was not understood or read by a
third party, there is no guarantee the sender really is the
sender; that is, there is no authentication of the sender.
• The sender could deny ever sending the
message(repudiation)
• No assurance the message was not altered somehow in
transit.
• To check the integrity of a message and ensure it has not
been altered in transit,a hash function is used first to
create a digest of the message.

45. Public Key Encryption using Digital
Signatures and Hash Digests
• Hash function:
– Mathematical algorithm that
produces fixed-length
number called message or
hash digest
• Hash digest of message sent to
recipient along with message to
verify integrity
• Hash digest and message
encrypted with recipient’s public
key
• Entire cipher text then encrypted
with recipient’s private
key—creating digital
signature—for authenticity,
nonrepudiation
• Digital Signature:
— It is a close parallel to a
handwritten signature.
• Like a handwritten signature, a
digital signature is unique—only
one person presumably
possesses the private key.
• When used with a hash function,
the digital signature is even more
unique than a handwritten
signature.
• When used to sign a hashed
document, the digital signature is
also unique to the document,
and changes for every document.

46. Public Key Cryptography with Digital
Signatures