UNIT – 1

➢ E-business
E-business or Online business means business transactions that take
place online with the help of the internet. The term e-business came
into existence in the year 1996. E-business is an abbreviation for
electronic business. So the buyer and the seller don’t meet personally .

❖ Feature of E- business

• There are no geographical boundaries

• Much cheaper than traditional business
• There are flexible business hours
• Marketing strategies cost less
• Online business receive subsidies from the government
• There are a few security and integrity issues
• There is no personal touch
• Buyer and seller don’t meet
• Delivery of products takes time
• There is a transaction risk
• Anyone can buy anything from anywhere at anytime
• The transaction risk is higher than traditional business

➢ E- commerce

E-commerce (electronic commerce) is the buying and

selling of goods and services, or the transmitting of
funds or data, over an electronic network, primarily the
internet. These business transactions occur either as
1
 business-to-business (B2B), business-to-consumer (B2C),
consumer-to-consumer or consumer-to-business.

 Types of E-commerce

 Business - to - Business
A website following the B2B business model sells its
products to an intermediate buyer who then sells the
product to the final customer. As an example, a wholesaler
places an order from a company's website and after
receiving the consignment, sells the endproduct to the final
customer who comes to buy the product at one of its retail
outlets.

2
 Business - to - Consumer
A website following the B2C business model sells its
products directly to a customer. A customer can view the
products shown on the website. The customer can choose
a product and order the same. The website will then send
a notification to the business organization via email and the
organization will dispatch the product/goods to the
customer.

 Consumer - to - Consumer
A website following the C2C business model helps
consumers to sell their assets like residential property,
cars, motorcycles, etc., or rent a room by publishing their
information on the website. Website may or may not charge
the consumer for its services. Another consumer may opt
to buy the product of the first customer by viewing the
post/advertisement on the website.

3
  Consumer - to - Business
In this model, a consumer approaches a website showing
multiple business organizations for a particular service. The
consumer places an estimate of ount he/she wants to spend
for a particular service. For example, the comparison of
interest rates of personal loan/car loan provided by various
banks via websites. A business organization who fulfills the
consumer's requirement within the specified budget,
approaches the customer and provides its services.

4
 ➢ Difference b/t E-commerce & E-
business.

 APPLICATIONS OF E-COMMERCE :

1. Online marketing and purchasing

2. Retail and wholesale

5
3. Finance

4. Manufacturing

5. Online Auction

6. E-Banking

7. Online publishing

8. Online booking

1. Online marketing and purchasing

Data collection about customer behavior, preferences, needs

and buying patterns is possible through Web and E-commerce.
This helps marketing activities such as price fixation,
negotiation, product feature enhancement and relationship
with the customer.

2. Retail and wholesale

E-commerce has several applications in retail and wholesale.

E-retailing or on-line retailing is the selling of goods from
Business-to-Consumer through electronic stores that are
designed using the electronic catalog and shopping cart model.
Cybermall is a single Website that offers different products and
services at one Internet location. It attracts the customer and
the seller into one virtual space through a Web browser.

3. Finance

6
Financial companies are using E-commerce to a large extent.
Customers can check the balances of their savings and loan
accounts, transfer money to their other account and pay their
bill through on-line banking or E-banking. Another application
of E-commerce is on-line stock trading. Many Websites provide
access to news, charts, information about company profile and
analyst rating on the stocks.

4. Manufacturing

E-commerce is also used in the supply chain operations of a

company. Some companies form an electronic exchange by
providing together buy and sell goods, trade market
information and run back office information such as inventory
control. This speeds up the flow of raw material and finished
goods among the members of the business community. Various
issues related to the strategic and competitive issues limit the
implementation of the business models. Companies may not
trust their competitors and may fear that they will lose trade
secrets if they participate in mass electronic exchanges.

5. Auctions

Customer-to-Customer E-commerce is direct selling of goods

and services among customers. It also includes electronic
auctions that involve bidding. Bidding is a special type of
auction that allows prospective buyers to bid for an item. For
example, airline companies give the customer an opportunity
to quote the price for a seat on a specific route on the specified
date and time.

7
6. E-Banking

Online banking or E- banking is an electronic payment system

that enables customers of a financial institution to conduct
financial transactions on a website operated by the institution,
Online banking is also referred as internet banking, ebanking,
virtual banking and by other terms.

7. Online publishing

Electronic publishing (also referred to as e-publishing or digital

publishing) includes the digital publication of e-books, digital
magazines, and the development of digital libraries and
catalogs.

8. Online booking

An Internet booking engine (IBE) is an application which helps

the travel and tourism industry support reservation through
the Internet. It helps consumers to book flights, hotels, holiday
packages, insurance and other services online. This is a much-
needed application for the aviation industry as it has become
one of the fastest growing sales channels.

8
9
 ➢ Framework of E-commerce

1) Quality Search Functionality

This is one of the functions which play a very big role in

the market with search functions that helps in conversion
rates. Basically this function is kind of filtering which
processes keywords and helps you to get precise effect
over search and into your sales too.

2) Content Management System (CMS)

It is the system which makes your website unique in

searches across the global markets. This is one of the
features which highly impact over the website as speed
key to efficiency.

3) Multi-channel Functionality

In current retail market and environment, it is highly

considered that your business is spread all across global
and though it is possible to get done through managing
products, listings and orders in a multi-channel
environment.

4) Mobile Supported E-commerce

10
 The fact is that everyone is looking forward to have easy
browsing on mobile than to go for getting an efficacious
platform, which will surely help to grow user and
customer’s attraction.

5) Third Party Systems and Plug-ins

It must have ability to use the third party plug-ins which

is meant to provide adaptability, customization and
innovation. These features can be used while developing
a website and though some may not be the part of the
standard package.

6) Business Intelligence

When it comes to managing the data, it is mandatory to

get precise and accurate details over the data. The tempo
should be maintained while managing the data, business
intelligence helps to get that done on your website
because only through the tempo and flow, which you will
be able to analyze the depth of transaction and then take
advantages of the opportunities that comes up.

 Architectural framework of e-commerce

The software framework necessary for building electronic

commerce applications is little understood in existing

11
literature. In general a framework is intended to define
and create tools that integrate the information found in
today’s closed systems and allow the development of
e-commerce applications. It is important to understand
that the aim of the architectural frame-work itself is not to
build new database management systems, data
repository, computer languages, software agent based
transaction monitors, or communication protocols Rather,
the architecture should focus on synthesizing the diverse
resources already in place incorporations to facilitate the
integration of data and software for better applications.

The electronic commerce application architecture consists of

six layers of functionality, or services:

(1) Applications services;

(2) Brokerage services, data or transaction management

(3) Interface, and; support layers”

(4) Secure messaging, security and electronic document

Interchange;
(5) Middle ware and structured document interchange;

(6) Network infrastructure and basic communications

Services

12
1. Application Services

Three distinct classes of electronic commerce application can be

distinguished: customer to business, business-to-business, and intra
organization.

▪ Consumer-to-Business Transactions

This category is also known as marketplace transaction In a

marketplace transaction, customers learn about products
differently through\ electronic publishing, buy them differently
using electronic cash and secure payment systems, and have them
delivered differently. Also, how customers allocate their loyalty may
also be different. In light of this, the organization itself has to adapt
to a world where the traditional concepts of brand differentiation
no longer hold-where “quality” has a new meaning, where
“content” may not be equated to “product,” Where “distribution”
may not automatically mean “physical transport.” In this new
environment, brand equity can rapidly evaporate forcing firms to
develop new ways of doing business.

▪ Business-to Business Transactions

This category is known as market-link transaction. Here, businesses,

governments, and other organizations depend on computer-to-
computer communication as a fast, an economical, and a
dependable way to conduct business transactions. Small companies
are also beginning to see the benefits of adopting the same

13
 methods. Business-to-business transactions include the use of EDI
and electronic mail for purchasing goods and services, buying
information and consulting services, submitting requests for
proposals, and receiving proposals. The current accounts payable
process occurs through the exchange of paper documents. Each
year the trading partners exchange millions of invoices, checks,
purchase orders, financial reports, and other transactions. Most of
the documents are in electronic format their point of origin but are
printed and key-entered at the point of receipt. The current manual
process of printing, mailing is costly, time consuming, and error-
prone. Given this situation and faced with the need to reduce costs,
small businesses are looking toward electronic commerce as a
possible saviour.

▪ Intra-organizational Transactions

This category is known as market-driven transactions. A company

becomes market driven by dispersing throughout the firm
information about its customers and competitors; by spreading
strategic and tactical decision making so that all units can
participate; and by continuously monitoring their customer
commitment by making improved customer satisfaction an ongoing
objective. To maintain the relationships that are critical to
delivering superior customer value, management must pay close
attention to service, both before and after sale.

2. Information Brokerage and Management

14
 The information brokerage and management layer provides service
integration through the information brokerages, the development
of which is necessitated by the increasing information resource
fragmentation. The notion of information brokerage is used to
represent an intermediary who provides service integration
between customers and information providers, given some
constraint such as a low price, fast service, or profit maximization
for a client. Information brokers, for example, are rapidly becoming
necessary in dealing with the voluminous amounts of information
on the networks.

3. Interface and Support Services

The third layer, interface and support services, will provide

interfaces for electronic commerce applications such as interactive
catalogues and will sup-port directory services-functions necessary
for information search and access. These two concepts are very
different .Interactive catalogs are the customized interface to
consumer applications such as home shopping. An interactive
catalog is an extension of the paper-based catalog and incorporates
additional features such as sophisticated graphics and video to
make the advertising more attractive. Directories, on the other
hand, operate behind the scenes and attempt to organize the
enormous amount of information and transactions generated to
facilitate electronic commerce. Directory services databases make
data from any server appear as a local file. In the case of electronic
commerce, directories would play an important role in information
management functions

15
4. Secure Messaging and Document Interchange
Services

Electronic messaging is a critical business issue. Consider a familiar

business scenario: In Integrated Messaging, a group of computer
services that through the use of a network send, receive, and
combine messages, faxes, and large data files. Some better-known
examples are electronic mail, enhanced fax, and electronic data
interchange. Broadly defined, messaging is the software that sits
between the network infrastructure and the clients or electronic
commerce applications, masking the peculiarities of the
environment. Other define messaging as a frame-work for the total
implementation of portable applications, divorcing you from the
architectural primitives of your system. In general, messaging
products are not applications that solve problems; they are more
enablers of the applications that solve problems. Messaging
services offer solutions for communicating non formatted
(unstructured) data-letters, memos, reports as weft as formatted
(structured) data such as purchase orders, shipping notices, and
invoices. Unstructured messaging consists of fax, e-mail, and form-
based systems like Lotus Notes. Structured documents messaging
consist of the automated interchange of standardized and approved
messages between computer applications, via tele-communicat.

5. Middleware Services

Middleware is a relatively new concept that emerged only recently.

Users in the 1970s, when vendors, delivered homogeneous Over
16
 the years, there developed the need to solve all the interface,
translation, transformation, and interpretation problems that were
driving application developers crazy. With the growth of networks,
client-server technology, and all other forms of communicating
between/ among unlike platforms, the problems of get-ting all the
pieces to work together grew from formidable to horrendous. As
the cry for distributed computing spread, users demand interaction
between dissimilar systems, networks that permitted shared
resources, and applications that could be accessed by multiple
software programs. Middleware is the ultimate mediator between
diverse software pro-grams that enables them talk to one another.

6. Network infrastructure and the basic communication

services

E‐business infrastructure is the architecture of hardware, software, content

and data used to deliver e‐business services to employees, customers and
partners. E-Business needs a network infrastructure to transport the content
through electronic, interactive or multimedia superhighway. Information
superhighways (I-way) describe a high capacity (broadband), interactive (two
way) electronic pipeline to home or office that capable of supporting a large
numbers of e-com applications.
E-business user requires voice, data and video conferencing services with their
respective separate networks.

➢ Difference b/t Traditional & E-commerce

17
18
 UNIT – 2
➢ Network
A network is a collection of computers, servers mainframes, network
devices, peripherals, or other devices connected to one another to
allow the sharing of data. An example of a network is the Internet,
which connects millions of people all over the world. To the right is
an example image of a home network with multiple computers and
other network devices all connected.

➢ Communication Network

Using networks for information sharing within the organization,

companies use networks to communicate and share information
with those outside the organization. All this is made possible
by data communication networks, which transmit digital data
(numeric data, text, graphics, photos, video, and voice) from one
computer to another using a variety of wired and wireless
communication channels. Let’s take a closer look at the
networking technologies that make possible all this electronic
communication—in particular, the Internet (including the World
Wide Web), intranets, and extranets.

Component of data communication network

There are mainly five components of a data communication

system :-

1. Message
2. Sender
19
 3. Receiver
4. Transmission Medium
5. Set of rules (Protocol)

1. Message :

This is most useful asset of a data communication system. The

message simply refers to data or piece of information which is to
be communicated. A message could be in any form, it may be in
form of a text file, an audio file, a video file, etc.

2. Sender :

To transfer message from source to destination, someone must

be there who will play role of a source. Sender plays part of a
source in data communication system. It is simple a device that
sends data message. The device could be in form of a computer,
mobile, telephone, laptop, video camera, or a workstation, etc.

3. Receiver :

It is destination where finally message sent by source has arrived. It

is a device that receives message. Same as sender, receiver can also
be in form of a computer, telephone mobile, workstation, etc
.
4.Transmission medium:

In entire process of data communication, there must be something

which could act as a bridge between sender and receiver,
Transmission medium plays that part. It is physical path by which
data or message travels from sender to receiver. Transmission
20
 medium could be guided (with wires) or unguided (without wires),
for example, twisted pair cable, fiber optic cable, radio waves,
microwaves, etc.

5. Set of rules (Protocol)

To govern data communications, various sets of rules had been

already designed by the designers of the communication
systems, which represent a kind of agreement between
communicating devices. These are defined as protocol. In simple
terms, the protocol is a set of rules that govern data
communication. If two different devices are connected but there
is no protocol among them, there would not be any kind of
communication between those two devices. Thus the protocol is
necessary for data communication to take place.

➢ Communication processor
A front end processor (FEP), or a communications processor, is a
small-sized computer which interfaces to the host computer a
number of networks, such as SNA, or a number of peripheral
devices, such as terminals, disk units, printers and tape units. Data is
transferred between the host computer and the front end processor
using a high-speed parallel interface. The front end processor
communicates with peripheral devices using slower serial interfaces,
usually also through communication networks. The purpose is to off-
load from the host computer the work of managing the peripheral
devices, transmitting and receiving messages, packet assembly and
disassembly, error detection, and error correction.

21
➢ Communication media
Communication media refer to the ways, means or channels of
transmitting message from sender to the receiver. Communication
media indicate the use of verbal or non-verbal language in the
process of communication. Without language, none
can communicate. Whenever communication takes place, media are
used there.

The most commonly used data communication media include:

• Wire pairs

• Coaxial cable

• Microwave transmission

• Communication satellites

• Fiber optics

• Wi - fi

➢ Communication satellite
Satellite communication, in telecommunications, the use of
artificial satellites to provide communication links between various
points on Earth. Satellite communications play a vital role in the global
telecommunications system. Approximately 2,000 artificial satellites
orbiting Earth relay analog and digital signals carrying voice, video, and
data to and from one or many locations worldwide.

22
Satellite communication has two main components: the ground
segment, which consists of fixed or mobile transmission, reception,
and ancillary equipment, and the space segment, which primarily is the
satellite itself. A typical satellite link involves the transmission or
uplinking of a signal from an Earth station to a satellite. The satellite
then receives and amplifies the signal and retransmits it back to Earth,
where it is received and reamplified by Earth stations and terminals.
Satellite receivers on the ground include direct-to-home (DTH) satellite
equipment, mobile reception equipment in aircraft, satellite
telephones, and handheld devices.

➢ Types of network:

 LAN(Local Area Network)

o Local Area Network is a group of computers connected to each
other in a small area such as building, office.
o LAN is used for connecting two or more personal computers
through a communication medium such as twisted pair, coaxial
cable, etc.

23
o It is less costly as it is built with inexpensive hardware such as hubs,
network adapters, and ethernet cables.
o The data is transferred at an extremely faster rate in Local Area
Network.
o Local Area Network provides higher security.

 PAN(Personal Area Network)

o Personal Area Network is a network arranged within an individual

person, typically within a range of 10 meters.

o Personal Area Network is used for connecting the computer

devices of personal use is known as Personal Area Network.

o Thomas Zimmerman was the first research scientist to bring the

idea of the Personal Area Network.

o Personal Area Network covers an area of 30 feet.

o Personal computer devices that are used to develop the personal

area network are the laptop, mobile phones, media player and
play stations.

 MAN (Metropolitan Area Network)

o A metropolitan area network is a network that covers a larger
geographic area by interconnecting a different LAN to form a
larger network.

24
o Government agencies use MAN to connect to the citizens and
private industries.

o In MAN, various LANs are connected to each other through a

telephone exchange line.

o The most widely used protocols in MAN are RS-232, Frame Relay,
ATM, ISDN, OC-3, ADSL, etc.

o It has a higher range than Local Area Network(LAN).

 WAN (Wide Area Network)

o

A Wide Area Network is a network that extends over a large

geographical area such as states or countries.

A Wide Area Network is quite bigger network than the LAN.

o A Wide Area Network is not limited to a single location, but it

spans over a large geographical area through a telephone line,
fibre optic cable or satellite links.

o The internet is one of the biggest WAN in the world.

o A Wide Area Network is widely used in the field of Business,

government, and education.

25
 ▪ VPN

A virtual private network (VPN) extends a private network across a public

network and enables users to send and receive data across shared or
public networks as if their computing devices were directly connected to
the private network. Applications running across a VPN may therefore
benefit from the functionality, security, and management of the private
network. It provides access to resources that may be inaccessible on the
public network, and is typically used
for telecommuting workers. Encryption is a common, although not an
inherent, part of a VPN connection

▪ GAN

A global area network (GAN) refers to a network composed of different

interconnected networks that cover an unlimited geographical area. The
term is loosely synonymous with Internet, which is considered a global
area network.

➢ Wireless network

Wireless networks are computer networks that are not connected by

cables of any kind. The use of a wireless network enables enterprises to
avoid the costly process of introducing cables into buildings or as a
connection between different equipment locations.

26
The basis of wireless systems are radio waves, an implementation that
takes place at the physical level of network structure.

Wireless networks use radio waves to connect devices such as

laptops to the Internet, the business network and applications.
When laptops are connected to Wi-Fi hot spots in public places, the
connection is established to that business’s wireless network

 There are four main types of wireless networks:

• Wireless Local Area Network (LAN):

Links two or more devices using a wireless distribution method,
providing a connection through access points to the wider
Internet.

• Wireless Metropolitan Area Networks (MAN):

Connects several wireless LANs.

• Wireless Wide Area Network (WAN):

Covers large areas such as neighboring towns and cities.

• Wireless Personal Area Network (PAN):

Interconnects devices in a short span, generally within a person’s
reach.

27
➢ Wireless internet access

Wireless Internet service is a type of Internet service that provisions

connectivity through wireless means.

It provides Internet connectivity service to end users and organizations

over a wireless communication network. Wireless Internet service is
primarily delivered by a wireless Internet service provider (WISP).

Wireless Internet is typically provided by wireless Internet service

providers (WISP) that broadcast wireless Internet signals in a specific
geographical location. Typically, wireless Internet is delivered through
radio waves or satellite signals.

Wi-Max and EV-Do are common examples of wireless Internet. Wireless

Internet may also include accessing the Internet via Wi-Fi connection
within a home, office or local network

 ISDN (Integrated Services Digital Network)

internet service

ISDN or Integrated Services Digital Network is a circuit-switched

telephone network system that transmits both data and voice
over a digital line. You can also think of it as a set of
communication standards to transmit data, voice, and signaling.

28
 These digital lines could be copper lines. It was designed to move
outdated landline technology to digital.

ISDN connections have a reputation for providing better speeds

and higher quality than traditional connections. Faster speeds and
better connections allow data transmissions to travel more
reliably.

ISDN Advantage

• The basic advantage of ISDN is to facilitate the user with multiple

digital channels. These channels can operate concurrently through
the same one copper wire pair.

• The digital signals broadcasting transversely the telephone lines.

• ISDN provides high data rate because of digital scheme which is

56kbps.
29
 • ISDN network lines are able to switch manifold devices on the
single line such as faxes, computers, cash registers credit cards
readers, and many other devices. These all devices can work
together and directly be connected to a single line.

• ISDN takes only 2 seconds to launch a connection while other

modems take 30 to 60 second for establishment.

➢ Dial-up internet service

Dialup internet service is a service that allows connectivity to the

internet through a standard telephone line. By connecting the
telephone line to the modem in your computer and inserting the other
end into the phone jack, and configuring the computer to dial a specific
number provided by your internet service provider (ISP) you are able to
access the internet on your computer.

Dial-up internet service is provided through several ISP. The majority of

internet service providers give you a set of telephone numbers either
national or local that allows you to dial into a network that feeds into
the internet. This allows you to receive and send email, search the
World Wide Web, participate in chat rooms and plenty of other
features the web has to offer.

➢ Broadband

Broadband refers to various high-capacity transmission technologies

that are used to transmit data, voice, and video across long distances

30
and at high speeds. Common mediums of transmission include coaxial
cable, fiber optic cable, and radio waves.

KEY TAKEAWAYS

• The term broadband is used to describe high-speed and high-

bandwidth communication infrastructure.

• It is commonly used in relation to high-speed Internet services,

which have become increasingly important both to consumers
and governments.

• Today, the availability of broadband is highly concentrated in a

small number of developed countries. However, new innovations
in satellite-based broadband services could potentially broaden
the scope of access throughout the world.

➢ Wi-fi

Wi-Fi is the wireless technology used to connect computers,

tablets, smartphones and other devices to the internet.

Wi-Fi is the radio signal sent from a wireless router to a nearby device,
which translates the signal into data you can see and use. The device
transmits a radio signal back to the router, which connects to the
internet by wire or cable.

A WiFi network is simply an internet connection that’s shared with

multiple devices in a home or business via a wireless router. The router
is connected directly to your internet modem and acts as a hub to
broadcast the internet signal to all your Wi-Fi enabled devices. This

31
gives you flexibility to stay connected to the internet as long as you’re
within your network coverage area.

32
 Unit – 3

➢ OSI Model
The OSI Model (Open Systems Interconnection Model) is a conceptual
framework used to describe the functions of a networking system. The
OSI model characterizes computing functions into a universal set of
rules and requirements in order to support interoperability between
different products and software. In the OSI reference model, the
communications between a computing system are split into seven
different abstraction layers: Physical, Data Link, Network, Transport,
Session, Presentation, and Application.
Created at a time when network computing was in its infancy, the OSI
was published in 1984 by the International Organization for
Standardization (ISO). Though it does not always map directly to
specific systems, the OSI Model is still used today as a means to
describe Network Architecture.

 There are 7 layer of this model :-

1.Physical Layer
The lowest layer of the OSI Model is concerned with electrically or
optically transmitting raw unstructured data bits across the
network from the physical layer of the sending device to the
physical layer of the receiving device. It can include specifications
such as voltages, pin layout, cabling, and radio frequencies. At

33
the physical layer, one might find “physical” resources such as
network hubs, cabling, repeaters, network adapters or modems.

2.Data Link Layer

At the data link layer, directly connected nodes are used to
perform node-to-node data transfer where data is packaged into
frames. The data link layer also corrects errors that may have
occurred at the physical layer.
The data link layer encompasses two sub-layers of its own. The
first, media access control (MAC), provides flow control and
multiplexing for device transmissions over a network. The second,
the logical link control (LLC), provides flow and error control over
the physical medium as well as identifies line protocols.

3.Network Layer
The network layer is responsible for receiving frames from the
data link layer, and delivering them to their intended destinations
among based on the addresses contained inside the frame. The
network layer finds the destination by using logical addresses,
such as IP (internet protocol). At this layer, routers are a crucial
component used to quite literally route information where it needs
to go between networks.

4.Transport Layer
The transport layer manages the delivery and error checking of
data packets. It regulates the size, sequencing, and ultimately the
transfer of data between systems and hosts. One of the most
common examples of the transport layer is TCP or the
Transmission Control Protocol.

5.Session Layer

34
The session layer controls the conversations between different
computers. A session or connection between machines is set up,
managed, and termined at layer 5. Session layer services also
include authentication and reconnections.

6.Presentation Layer
The presentation layer formats or translates data for the
application layer based on the syntax or semantics that the
application accepts. Because of this, it at times also called the
syntax layer. This layer can also handle the encryption and
decryption required by the application layer.

7.Application Layer
At this layer, both the end user and the application layer interact
directly with the software application. This layer sees network
services provided to end-user applications such as a web browser
or Office 365. The application layer identifies communication
partners, resource availability, and synchronizes communication .

➢ Protocols

It is a digital language through which we communicate with others

on the Internet. protocol meaning is that it a set of mutually
accepted and implemented rules at both ends of the
communications channel for the proper exchange of information. By
adopting these rules, two devices can communicate with each other
and can interchange information. We can’t even think of using
the Internet without Protocols.
Each protocol is defined in different terms and different use with
unique name. Message travel from sender to receiver via a medium
35
 (The medium is the physical path over which a message travels)
using a protocol.

‘Protocols’ are developed by industry wide organizations. All data

of protocols are stored in binary information. Protocol language is a
mixture of bits, characters, integers, etc.

Types of protocol

1. Transmission Control Protocol (TCP):

TCP is a popular communication protocol which is used for

communicating over a network. It divides any message into series of
packets that are sent from source to destination and there it gets
reassembled at the destination.

2. Internet Protocol (IP):

IP is designed explicitly as addressing protocol. It is mostly used with

TCP. The IP addresses in packets help in routing them through
different nodes in a network until it reaches the destination system.
TCP/IP is the most popular protocol connecting the networks.

3. User Datagram Protocol (UDP):

UDP is a substitute communication protocol to Transmission Control

Protocol implemented primarily for creating loss-tolerating and low-
latency linking between different applications.

36
4. Post office Protocol (POP):

POP3 is designed for receiving incoming E-mails.

5. Simple mail transport Protocol (SMTP):

SMTP is designed to send and distribute outgoing E-Mail.

6. File Transfer Protocol (FTP):

FTP allows users to transfer files from one machine to another. Types
of files may include program files, multimedia files, text files, and
documents, etc.

7. Hyper Text Transfer Protocol (HTTP):

HTTP is designed for transferring a hypertext among two or more

systems. HTML tags are used for creating links. These links may be in
any form like text or images. HTTP is designed on Client-server
principles which allow a client system for establishing a connection
with the server machine for making a request. The server
acknowledges the request initiated by the client and responds
accordingly.

8. Hyper Text Transfer Protocol Secure (HTTPS):

HTTPS is abbreviated as Hyper Text Transfer Protocol Secure is a

standard protocol to secure the communication among two
computers one using the browser and other fetching data from web
server. HTTP is used for transferring data between the client browser

37
 (request) and the web server (response) in the hypertext format, same
in case of HTTPS except that the transferring of data is done in an
encrypted format. So it can be said that https thwart hackers from
interpretation or modification of data throughout the transfer of
packets.

➢ Network security
Network security is a broad term that covers a multitude of
technologies, devices and processes. In its simplest term, it is a set of
rules and configurations designed to protect the integrity,
confidentiality and accessibility of computer networks and data using
both software and hardware technologies. Every organization,
regardless of size, industry or infrastructure, requires a degree of
network security solutions in place to protect it from the ever-growing
landscape of cyber threats in the wild today.

Network security typically consists of three different controls :-: .

 Physical Network Security

Physical security controls are designed to prevent unauthorized

personnel from gaining physical access to network components such as
routers, cabling cupboards and so on. Controlled access, such as locks,
biometric authentication and other devices, is essential in any
organization.

 Technical Network Security

Technical security controls protect data that is stored on the network or

which is in transit across, into or out of the network. Protection is

38
twofold; it needs to protect data and systems from unauthorized
personnel, and it also needs to protect against malicious activities from
employees.

 Administrative Network Security

Administrative security controls consist of security policies and

processes that control user behavior, including how users are
authenticated, their level of access and also how IT staff members
implement changes to the infrastructure.

➢ Firewall security network

A firewall is a network security device that monitors incoming and

outgoing network traffic and permits or blocks data packets based on a
set of security rules. Its purpose is to establish a barrier between your
internal network and incoming traffic from external sources (such as
the internet) in order to block malicious traffic like viruses and hacker.

39
 ➔ Network Based Firewall & Host Based
Firewall

PARAMETER NETWORK BASED FIREWALL HOST BASED FIREWALL

Terminology Firewall filters traffic going from Internet A host firewall is a software
to secured LAN and vice versa. application or suite of
applications installed on a
singular computer

Placement At the Perimeter or border of the network Placed at end Host systems
like Internet handoff point to address the and will be in a way, 2nd line of
unauthorized access from the entry/exit defence if unauthorized traffic
point. has not been blocked by
Network based firewall.

Hardware/Software based Hardware based Software based

Functions at Network Level Host level

Mobility Cannot be moved until all the assets of Since Host based Firewall is
LAN have been migrated to new location installed on end machine
(Laptop/desktop) , hence Host
based firewall is mobility
friendly

Internal Protection For end host to end host communication For end host to end host
(same VLAN/Zone) in same VLAN , Network Firewall does not communication in same VLAN,
provide security Host based Firewall provides
security control and
protection.

Network Protection Strong defence barrier compared with Limited defence barrier
host-based. Infact Network Firewalls are compared to Network firewalls
hardened enough leaving very less space
for attacker to play.

40
Scalability Easy to scale since increase in number of More effort required to scale
users in LAN triggers more bandwidth in terms of more installations
requirement and rightly sized Firewall & maintenance on each device
considering future growth does not when number of hosts
require much of effort to accommodate increase
high bandwidth.

Maintenance Manpower may be shared and limited Dedicated IT team required to

since only 1 or 2 sets of Network Firewall monitor and maintain and
need to be managed update Host based Firewall on
each end device

Skill set Setup requires highly skilled resources Skill set of basic
with good understanding of Security Hardware/software
devices understanding and program
installation

❖ Firewall and its uses are given below .

• The useful thing about a Firewall is that it prevents unauthorized

remote access and remote control of your computer by a hacker for evil
purposes.
• Data security is ensured based on IP address and protocol.
• It ensures continuity of operations and availability of information.
• It blocks destructive or unsuitable or pornographic content.
• It prevents ransomware, malware, and phishing attacks.
• It shields older PCs with earlier versions of OS.
• It is safer for online gamers.

❖ Advantages of Firewall

• A Firewall prevents hackers and remote access.

• It protects data.
• It ensures better privacy and security.
• It protects from Trojans.
41
• A network-based Firewall, like a router, can offer protection to multiple
systems, while an OS-based Firewall can protect individual systems.

➢ Clint server network security

The Client server network one of the most powerful computers

(servers) A computer networking model that provides various computer
network services and all other users of a computer network (clients)
access the services that perform the user’s functions in the client server
architecture computer networking model.

Client server In such as a network, there is a central controller called a

server. A client security server network is a dedicated
computer that controls Client server network resources
and serves other computers on the network. The client
receives the requested services from the computer client server
network examples. A Client Server network security performs all major
functions such as security and network management.

➔ Advantages of Client-Server Network:-

1. Client-Server Network has centralized control. i.e, centralized
user accounts, security, and access to simplify network
administration.
2. It does not slow down with heavy use.
3. The size of the network can be expanded to any size.

42
 4. Proper Management: All the files are stored in the same place.
In this way, the management of files becomes easy. Also, it
becomes easier to find files.
5. As all the data is stored on the server it's easy to make a back-up
of it.
6. Reduces Data Replication- Data stored on the servers instead of
7. each client, so it reduces the amount of data replication for the
application.

➢ Data security

Data security is a set of processes and practices designed to protect

your critical information technology (IT) ecosystem. This included files,
databases, accounts, and networks. Effective data security adopts a set
of controls, applications, and techniques that identify the importance of
various datasets and apply the most appropriate security controls.

Elements of Data Security

There are three core elements to data security that all organizations
should adhere to: Confidentiality, Integrity, and Availability. These
concepts are also referred to as the CIA Triad, functioning as a security
model and framework for top-notch data security. Here’s what each
core element means in terms of keeping your sensitive data protected
from unauthorized access and data exfiltration
.

43
 • Confidentiality. Ensures that data is accessed only by authorized
users with the proper credentials.

• Integrity. Ensure that all data stored is reliable, accurate, and not
subject to unwarranted changes.

• Availability. Ensures that data is readily — and safely — accessible

and available for ongoing business needs.

❖ Common threats of Data security

1) Public Wifi Access

There are many instances where we find ourselves having to connect to

public wifi networks. Whether this is via the airport or your favourite
coffee spot, connecting to public wifi can pose a potential threat. As it
is, many of these public wifi hotspots often allow for users to connect
to an unsecured network without authentication. As a result there
could be instances where fake access points have been created by
hackers in order to access information from any device that connects to
it.

2) Shoulder Surfing

One aspect of data theft that may seem all too obvious, yet is also quite
common is the act of ‘shoulder surfing’. This of course refers to an
attacker peering over your shoulder to obtain information from your

44
device or your keyboard movements. With camera phones especially,
this data can easily and overtly be recorded by attackers if we do not
take steps to protect our information. The types of information that can
be stolen can be so personal as to include credit card numbers, bank
accounts, and important passwords that can grant access to an endless
amount of important details and can be dangerous in the wrong hands.

3) Malware

Short for ‘Malicious Software’, malware can be another highly intrusive

threat to your data. Malware can be encountered by users in a variety
of forms. The purpose of malware, especially in the form of spyware is
so cyber-criminals can spy on their victims information by viewing and
recording every single keyboard action made by the users.

Other types of malware include, computer virus, worms, trojan horses

– and root kits. While you may have heard of the first few malware
formats, the later – root kits have actually been around for a number of
years, yet perhaps less widely heard of thus far. In a nut-shell, this type
of malicious entity operates as a collection of tools that are put in place
by a cyber-attacker to obtain administrator-level computer or
computer network access.

4) Email Spam

Fourth on this list of invasive data threats is simply known as good old
Spam. Every time you log into your email account, it is likely that you
notice some unwanted messages in your inbox – or junk mail folder.
While the multitude of these messages can not only clog up your email
account, they also have the potential to take up residence on your
mail’s server.

While for the most part these spam-filled messages can be no more
than an annoyance, it is the links that are contained within these

45
messages that can present a higher threat. If you accidentally click on
these links this can automatically direct you to another site that is
poised and ready to install malicious software onto your computer.

5) Phishing Scams

While this danger associated with this last threat can also include spam
messages, the act of Phishing, however actually refers specifically to
the fraudulent email messages that are designed and personalized to
appear as if they are authentic messages. Moreover, these messages
may give the allusion that they are from real sources – even individuals
you are very familiar with – and as a result it is not likely that you would
not question their legitimacy.

➢ Messaging security

Messaging security helps to ensure the confidentiality and

authenticity of an organization’s communication methods.
Confidentiality refers to making sure only the intended
recipients are able to read the messages and authenticity refers
to making sure the identity of each sender or recipient is
verified.
❖ Advantage of messaging security

1. It provides end-to-end security.

2. Because message security directly encrypts and signs the
message, having intermediaries does not break the security.
46
 3. It allows partial or selective message encryption and signing, thus
improving overall application performance.
4. Message security is transport-independent and can be used with
any transport protocol.
5. It supports a wide set of credentials and claims, including issue
token, which enables federated security.

Characteristics of Messaging Security

1. Protection against advanced spam such as image-based and

multi-language spam.
2. Antivirus protection through the combination of both zero-
hour and signature-based detection.
3. UTM solution for Messaging Security that is content
and Language-independent.
4. Advanced, real-time IP-reputation service.
5. On-session email blocking (emails are checked and blocked
during the original SMTP/POP3 session

➢ Encrypted document

Document encryption is the process by which documents are protected

with cryptographic keys (a password, public key, token, etc.) so that
only individuals with the corresponding decryption keys (the same
password, private key, token, etc.) can open them. It is used to protect
documents in transit (i.e. sent via email) and at rest (i.e. stored on a
disk or in the cloud) from being accessed by unauthorized users.

47
➔ Advantage of encryption
1. Encryption protects your privacy
2. Encryption prevents Identity Theft and Ransomeware Blackmail
3. Encryption allows you to securly share your files
4. Encryption protects Lost document

These are some tools of security which we have studied above like,
firewall, clint server security, data & messaging security, encrypted
document and etc.

➢ Digital signature

A digital signature is a mathematical technique used to validate the

authenticity and integrity of a message, software or digital document.

It's the digital equivalent of a handwritten signature or stamped seal,

but it offers far more inherent security. A digital signature is intended
to solve the problem of tampering and impersonation in digital
communications.

Digital signatures can provide evidence of origin, identity and status of

electronic documents, transactions or digital messages. Signers can also
use them to acknowledge informed consent.

In many countries, including the United States, digital signatures are

considered legally binding in the same way as traditional handwritten
document signatures.

48
➔ Benefits of digital signature

1. Document Security:
Nobody wants to have to go into crisis management mode when
important paper documents are stolen, misplaced or destroyed due
to a fire, flood or other unforeseen disaster. The fact is, these things
happen – and prevention is always better than cure. Digital
document management and storage eliminates the chances of
physical records going missing or being destroyed.

2. Company image:
Using digital signatures and finalising contracts and agreements so
much faster than expectations have always dictated shows clients
your business has the latest technology in place, and is serious about
efficiency. For one of our clients, the fact that they used a digital
signature and workflow solution turned out to be a differentiator
when it came to them getting a deal.

3. Corporate social responsibility:

There is without doubt increased awareness and a higher
expectation for companies to be environmentally aware nowadays.
Using digital signatures and supporting a paperless business model
demonstrates that you as a company are aware of the impact using
paper has on the environment, and willing to employ solutions to
minimise damage. Paper pollution causes serious adverse effects to
the quality of air, water and land around us. Not only is discarded
paper a major component of landfill sites, paper recycling in itself is
a major source of pollution, given all the sludge that is produced
during de-inking.

49
4. Time management:
There is nothing more time consuming – not to mention frustrating
than having to spend hours searching for physical documents that
went through a lengthy manual signing, managing & storing process
and straight into a proverbial black hole. Digital Signatures turn
hours – sometimes days or even weeks – into mere minutes by
allowing you to quickly find the required documents, on a secure
server, and then action them.

5. Simplification of processes:
One of our recently acquired customers were pleasantly surprised
to see how simple going digital and paperless was, and how quickly
our solution was able to save them time and money by simplifying
day-to-day business processes. “We initially thought the change to
digital processes would complicate things and take so much time to
implement, but it turns out it was simpler than any single manual
process we’ve done in the past, and our employees were happy and
quick to get on board and move away from old manual contract
signing and filing systems.”

6. Customer satisfaction:
We love to hear feedback from our customers about their
customers, because we understand how much value a customer
holds for a company. While organisations stand to benefit hugely
from going paperless – in both monetary and time-saving terms –
the customers they serve reap just as many rewards, including
convenience, speed and efficiency. At the end of the day, a happy
customer means a happy bottom line.

7. Eradication of fraud:

50
 It’s no secret that any semi-skilled con artist can forge a physical
signature. Digital signatures completely eliminate the risk of forgery,
because they are backed by a unique digital identity, based on
globally accepted Public Key Infrastructure standards. There is no
higher level of security when it comes to signing a document.

8. Legality:
One of the things we frequently get asked by customers, is whether
digital signatures are legally valid across all parts of the world. The
answer is yes. Sing Flow digital signatures were developed with both
security and compliance at their core, and are compliant with
European, US, South African and international regulations for
electronic transactions and trust services. Our solution uses state-of-
the-art digital cryptographic signature technology that allows
businesses and their customers to sign documents remotely and
securely, with the sound knowledge that they are signing with
signatures that are legally binding.

9. Money savings:
This is probably the most immediately raved about benefit see
when companies deploy digital signatures. Apart from the obvious
money-saving benefits that come with not having to print
documents out, such as no more paper, ink, printers and
maintenance, there are other associated cost savings enabled by
digital document management and storage, such as needing less
physical office space (which is often one of the biggest expenses a
company has), and document distribution.

10. Audit trails:

In business, the ability to trace documents to their origin is crucial –
not only for internal records, but also for the sake of transparency,

51
 compliance and protection of company information. Our digital
signature workflow system provides businesses with a full digital
audit trail, kept with documents in the Sing Flow workspace, stored
on secure servers.

➔ Digital Certificate
A Digital Certificate is an electronic "password" that allows a person,
organizaion to exchange data securely over the Internet using the
public key infrastructure (PKI). Digital Certificate is also known as
a public key certificate or identity certificate.

Digital certificate authentication helps organizations ensure that only

trusted devices and users can connect to their networks.

A digital certificate contains identifiable information, such as a user’s

name, company, or department and a device’s Internet Protocol (IP)
address or serial number.
Digital certificates contain a copy of a public key from the certificate
holder, which needs to be matched to a corresponding private key to
verify it is real.
A public key certificate is issued by certificate authorities (CAs), which
sign certificates to verify the identity of the requesting device or user.

52
 Unit – 4

➢ World wide web (www.)

The World Wide Web is what most people think of as the Internet. It is
all the Web pages, pictures, videos and other online content that can
be accessed via a Web browser. The Internet, in contrast, is the
underlying network connection that allows us to send email and access
the World Wide Web.

The WWW is a browser or web browser that lets users’ access web
pages and web programs. The browsers include Internet Explorer,
Firefox, Opera, Safari, and Google Chrome.

53
The world wide web ('www' or 'web' for short) is a collection of
webpages found on this network of computers. Your web
browser uses the internet to access the web.

➔ Role of world wide web in E-Commerce

The World Wide Web is improving contact means, partnership, and

production efficacy. A major advantage is rapid communication and
interaction among participants, with business leaders able to make
intelligent moves and techniques much more promptly than in
the previous years when internet was not yet widely used

1. Customers visiting business sites can make all necessary

transactions using the internet without the hassle of going to the
actual store.
2. They can even view and buy anything in that website 24 hours a
day and 7 days a week.

3. Updates on order status and delivery schedule can also be

known through the internet. Thus, the customer is well-
informed about his purchase, from choosing the product to
actually getting it.

4. Customers can view detail technical specifications of products

even if they are miles away or separated by seas from the
supplier. Through this, customers can make more intelligent
assessment of the products being sold. This is specif ically
applicable to products that involve intensive designing means
such as for laboratory equipments or manufacturing facility
machineries.

54
 5. Customers can have a more personal connection with the
business through the Internet and on the other hand, businesses can
have continuous communication with the customer. With the internet,
making follow-ups on pending orders has become easier.
Moreover, even payment of orders has become simple,
secured and trouble-free through the use of the www.

➔ How World Wide Web Facilitate Ecommerce

1. Direct Selling

With the help of the World Wide Web, people from around the globe
can visit virtual shops and malls online, browse through various product
catalogues, get all the details of the products, and purchase them
directly from the website. All these functions of an ecommerce
store are possible only through the multimedia functions of the World
Wide Web. Also, any individual can now sell online to any part of the
world without the need for visiting the place through such virtual shops
using WWW.

2. Communication
Email or electronic mail is the most common mode of communication
from businesses to customers as well as from businesses to businesses.
It is a low-cost and effective way to communicate through the large
network of the World Wide Web. Ecommerce is a business that
requires active communication between the sellers and customers as
well as among multiple sellers. Using email, this communication can be
done easily without boundary limitations or lack of target audience.

55
 3. Marketing

WWW has evolved to become a medium that instils trusts on a new

website. Every website is now set up on the World Wide Web.
Therefore, such websites get access to millions of potential customers
from around the globe. With the help of the World Wide Web, any
ecommerce website can market their services to the world within a few
seconds and lower costs as compared to the traditional marketing
methods.

4. Research and Development

Ecommerce businesses that are in the niche of research and

development can get additional advantage from the World Wide Web.
They can collect all the information for their research and development
through the WWW network. The users can get their queries resolved by
businesses using online communication.

➢ ( EDI ) Electronic Data Interchange

Electronic Data Interchange (EDI) is the electronic interchange of

business information using a standardized format; a process which
allows one company to send information to another company
electronically rather than with paper. Business entities conducting
business electronically are called trading partners.

Many business documents can be exchanged using EDI, but the two
most common are purchase orders and invoices. At a minimum, EDI
replaces the mail preparation and handling associated with traditional

56
business communication. However, the real power of EDI is that it
standardizes the information communicated in business documents,
which makes possible a "paperless" exchange

➔ The benefits of using EDI

:

By implementing EDI, we have helped many companies add value to

their organisation by automatically processing information, reducing
clerical tasks and eliminating data entry errors.

Using EDI for the end-to-end use of electronic transactions throughout

the business cycle results in significant savings in time and
resources. Current trading partners benefit from the seamless flow of
information and availability of the technology opens doors for new
business opportunities.

• Minimal paper usage

EDI reduces associated expenses of storage, printing, postage, mailing

and recycling

• Quality of data Enhanced

EDI minimises data entry errors, improves accounts payable/receivable

times as processes become streamlined and can be used for
forecasting.

57
 • Improved turnaround times

Your business cycle is improved and stock levels are kept constantly up
to date and visible.

• Improved timelines

EDI transfer ensures real-time processing and eliminates times

associated with manually sending, receiving and entering orders

• Costs saving in operational efficiency

EDI reduces the time it takes your staff to manually create invoices and
process purchase orders

• Helps create a greener world

EDI eliminates paper trails and ensures paper usage is kept to a

minimum.

➔ EDI benefits for business

 Faster transactions:

Paper documents take time to transport from location to location,

while manually-entered electronic forms take time to fill, file and
retrieve. EDI enables companies to eliminate these time-consuming
tasks, cutting processing time through automation. For example, EDI
can help reduce order-to-shipment cycles, allowing faster turnaround
times and greater customer satisfaction .

58
  Reduced errors:

Non-EDI systems involve manual processes that are naturally more

error-prone than a computer. EDI eliminates this with automated entry
and data processing, removing the possibility of human error.

 Improved accessibility:

Non-EDI systems are more difficult to access quickly due to the

inherent time delays and manual processes needed to process data. EDI
is more immediate and automated, allowing the user access to a range
of transactional data. This enables businesses to manage accounts and
inventory more accurately.

 Maximized efficiency:

With faster speeds, reduced errors and better accessibility, EDI offers
improved efficiency across the board for corporations. By eliminating
time-consuming manual processes and data processing tasks,
businesses can allocate their people and resources to tasks that more
directly impact customer relationships and add value to the company.

 Increased security:

While manual processes may seem secure, the human error involved
actually increases security risks, allowing room for inaccuracies and loss
of data. With EDI, processes are automated, and documents are
transferred through a secure connection, eliminating costly errors.
Additionally, EDI makes it easier to track and store data for auditing
purposes, ensuring that your company is ready to meet industry
compliance standards.

 Cost savings:

59
 All the above-listed benefits result in a system that saves businesses
money. While non-EDI systems incur labor and materials costs and
allow for costly errors, EDI systems eliminate these problems.
Electronic-only documentation reduces material costs, while
automation reduces labor costs and expensive errors.

➢ Intranet
An intranet can be defined as a private network used by an
organization. Its primary purpose is to help employees securely
communicate with each other, to store information, and to help
collaborate. Modern intranets use social features that allow employees
to create profiles and to submit, like, comment, and share posts .

➔ Uses of intranet

An intranet is primarily used by organizations as a tool to:

• Share organizational updates

• Store files
• Connect employees
• Collaborate with teams across boraders
• Increase productivity
• Give employees a voice in the organization

➔ Benefits of intranet in business.

Whether cloud-based or on-premise intranet, using an intranet has
many benefits. Some of the biggest benefits are :-

60
 ▪ Access to organizational data and files anytime, anywhere
▪ Increases internal communication
▪ Connects employees
▪ Increases employee productivity
▪ Drives employee engagement
▪ Enhances collaboration
▪ Integrates with third-party tools
▪ Stores securely document
▪ Boosts employee recognition and rewards
▪ Encourages knowledge sharing

Unit -5

➢ Online payment / E - PAYMENT

An online payment is an electronic exchange of currency for purchased

goods or services. Online payments are facilitated by 'payment
gateways' or 'payment service providers. Collecting money through the
Internet means accepting online payment.

61
 The most common payment forms online are credit card and debit
card, others are e-wallet, bank transfer, bitcoin wallet and smart
cards.Online payments need to be done over secure encrypted
connection in order to decrease chances of having the personal and
billing information stolen.

An electronic payment (e-payment), in short, can be simply defined as

paying for goods or services on the internet. It includes all financial
operations using electronic devices, such as computers, smartphones or
tablets.

E-payments come with various methods, like credit or debit card

payments or bank transfers. Note that one of the most popular and
common online payment methods nowadays are credit cards.

➔ Advantages of Online Payments

• Reaching global audiences.

• Reduced costs for transactions.
• Payment security.
• Optimized customer journey.
• Payment method acceptance.
• More marketing/distribution channels available.
• More appealing to impulse buyers.
• Recurring payments capabilities.

➢ Payment cards

62
Payment cards are part of a payment system issued by financial
institutions, such as a bank, to a customer that enables its owner
(the cardholder) to access the funds in the customer's designated bank
accounts, or through a credit account and make payments by electronic
funds transfer and access automated teller machines (ATMs). Such
cards are known by a variety of names including bank cards, ATM
cards, MAC (money access cards), client cards, key cards or cash cards.

➔ Types of pament card

 Credit card

A credit card is linked to a line of credit (usually called a credit limit)

created by the issuer of the credit card for the cardholder on which the
cardholder can draw (i.e. borrow), either for payment to a merchant for
a purchase or as a cash advance to the cardholder. Most credit cards
are issued by or through local banks or credit unions, but some non-
bank financial institutions also offer cards directly to the public .

 Debit card

With a debit card (also known as a bank card, check card or some other
description) when a cardholder makes a purchase, funds are withdrawn
directly either from the cardholder's bank account, or from the
remaining balance on the card, instead of the holder repaying the

63
money at a later date. In some cases, the "cards" are designed
exclusively for use on the Internet, and so there is no physical card .

 Charge card

With charge cards, the cardholder is required to pay the full balance
shown on the statement, which is usually issued monthly, by the
payment due date. It is a form of short-term loan to cover the
cardholder's purchases, from the date of the purchase and the payment
due date, which may typically be up to 55 days. Interest is usually not
charged on charge cards and there is usually no limit on the total
amount that may be charged. If payment is not made in full, this may
result in a late payment fee, the possible restriction of future
transactions, and perhaps the cancellation of the card.

 ATM card

An ATM card (known under a number of names) is any card that can be
used in automated teller machines (ATMs) for transactions such as
deposits, cash withdrawals, obtaining account information, and other
types of transactions, often through interbank networks. Cards may be
issued solely to access ATMs, and most debit or credit cards may also
be used at ATMs, but charge and proprietary cards cannot .

 Stored-value card

With a stored-value card, a monetary value is stored on the card, and

not in an externally recorded account. This differs from prepaid cards
64
where money is on deposit with the issuer similar to a debit card. One
major difference between stored value cards and prepaid debit cards is
that prepaid debit cards are usually issued in the name of individual
account holders, while stored-value cards are usually anonymous.

 Fleet card

A fleet card is used as a payment card, most commonly for gasoline,

diesel and other fuels at gas stations. Fleet cards can also be used to
pay for vehicle maintenance and expenses, at the discretion of the fleet
owner or manager. The use of a fleet card reduces the need to carry
cash, thus increasing the security for fleet drivers. The elimination of
cash also helps to prevent fraudulent transactions at the fleet owner's
or manager's expense.

 Smart card

A smart card, chip card, or integrated circuit card (ICC), is any pocket-
sized card with embedded integrated circuits which can process data.
This implies that it can receive input which is processed by way of the
ICC applications and delivered as an output. There are two broad
categories of ICCs. Memory cards contain only non-volatile memory
storage components, and perhaps some specific security
logic. Microprocessor cards contain volatile memory and
microprocessor components. The card is made of plastic, generally PVC,
but sometimes ABS. The card may embed a hologram to
avoid counterfeiting. Using smart cards is also a form of strong security
authentication for single sign-on within large companies and
organizations.

65
 ➢ Electronic cash/ E- cash

In providing a simple definition of e-Cash, also known as electronic

cash, it is a digital money product that provides a way to pay for
products and services without resorting to paper or coin currency.

Two models emerged for e-cash transactions:

• The online form of e-Cash, which was introduced by the now

defunct DigiCash, worked for all types of Internet transactions.

• The offline form of e-cash involved a digitally encoded card that

replaced paper money. Mondex developed and tested this model
with different banks, but the company has now transitioned into
the development and management of smart cards also used for
financial transactions.

66
➔ Advantages of Electronic cash

1. Increased flexibility and convenience

The use of electronic money brings increased flexibility and

convenience to the table. Transactions can be entered into from
anywhere in the world, at any given time, with one click of a button. It
removes the hassle and tediousness involved with the physical delivery
of payments.

2. Historical record

The usage of electronic money is becoming increasingly popular

because it stores a digital historical record of each and every
transaction made. It makes tracing back payments easier and also helps
with making detailed expenditure reports, budgeting, and so on.

3.Prevents fraudulent activities

Since electronic money makes available a detailed historical record of
each and every transaction made, it is very easy to keep track of
transactions and trace them back through the economy. It increases
security and helps prevent fraudulent activities and malpractices.

4. Instantaneous

The use of electronic money brings with it a kind of instantaneousness

that has not been experienced before in the economy. Transactions can

67
be completed in split seconds with the click of a button from virtually
anywhere in the world. It eliminates problems of physical delivery of
payments, including long queues, wait times, etc.

5. Increased security

The use of e-money also brings with it an increased sense of security.

To prevent loss of personal information while transacting online,
advanced security measures are implemented like authentication and
tokenization. Stringent verification measures are also employed to
ensure the full authenticity of the transaction.

➢ Electronic Check

An electronic check, or e-check, is a form of payment made via the

Internet, or another data network, designed to perform the same
function as a conventional paper check. Since the check is in an
electronic format, it can be processed in fewer steps.

Additionally, it has more security features than standard paper checks

including authentication, public key cryptography, digital signatures,
and encryption, among others.
KEY TAKEAWAYS

• An electronic check is a form of payment made via the internet that is

designed to perform the same function as a conventional paper check.
• One of the more frequently used versions of the electronic check is the
direct deposit system offered by many employers.
• Generally, the costs associated with issuing an electronic check are notably
lower than those associated with paper checks.

68
 • An electronic check has more security features than standard paper checks.

Electronic checks are another form of electronic tokens. They are

designed to accommodate the many individuals and entities that might
prefer to pay on credit or through some mechanism other than cash.
Buyers must register with a third-party account server before they are
able to write electronic checks.

➔ Benifits of e-check
.

1. Pay Quickly and Control Your Cash Flow

Traditional paper checks can take 4 to 5 days to arrive by mail, while

eChecks move at the speed of email and give you the power/control to
pay in 4 to 5 seconds. It’s your money, and with eChecks you can pay
your vendors exactly when you want to pay them and gain better
control of it. eChecks allow you to stop worrying when, or if, your
payment will arrive.

2. Save Money

With traditional paper checks you’re paying for the paper check,
envelope, stamp, and time involved in preparing the check and getting
it ready to mail. An eCheck costs right around the cost of a stamp, but
does the work of a check, an envelope and a stamp at a fraction of the
cost. This saves you roughly $1 per check
.

3. Save Time

With paper checks, there are a lot of manual steps that need to take
place to prepare the check for mailing. You need to: put the check stock
into the printer, print the checks, sign the checks, tear off the
69
remittance stub for your records, fold the check and stuff it into the
envelope, seal the envelopes, and attach postage. All of these steps
take time. With eChecks, once the transaction is entered on our site, or
into your accounting software, you’re essentially done and can send
checks without all of that manual processing. We recently had a
customer send 6,000 checks in about 9 minutes. That type of efficiency
could never be achieved with paper checks.

4. Pay More Safely and Securely

It doesn't take a high level of sophistication for a fraudster to walk up

to an unattended mailbox and steal the contents. According to the
American Banking Association, in 2018 check fraud accounted for
roughly $1.3 billion dollars in losses. Since Deluxe Payment Exchange
eCheck notifications get directly from one email to another, and get
retrieved from our secure website, the eChecks aren’t able to be
intercepted through the mail like traditional paper checks.
Secondly, DPX has proprietary state of the art technology that gives the
bank the ability to verify that an eCheck is valid, and hasn’t been
altered. This adds an extra layer of fraud protection for your payables.

5. Compatible With Your Current Accounting Software

e-Checks integrate seamlessly with most accounting software. Typically

your transactions from your accounting software can be pushed into
the eChecks system without any double-entry. You’ll continue to write
checks in your current accounting software without any additional
software expenses or upgrades.

6. Pay from Anywhere, Anytime

Create a check and send it in just a few keystrokes from a computer,

smart phone, or a tablet from home, work, or anywhere. See our
mobile apps by searching “Deluxe Mobile Checkbook” for iPhone and
Android.
70
➔ Benefits to receiving e-Checks

1. Get Paid Faster

Instead of waiting 4 or 5 days for a paper check to arrive via traditional

mail, eChecks arrive in 4 to 5 seconds via email, so you can get your
money faster.

2. No Cost to the Receiver

Interchange fees ranging from 2%-4% are typically required to accept

online ACH payments and receive credit card payments. This is a high
price to pay just to receive your money in a timely manner. With DPX
eChecks, the receiver of the check pays NO additional fees.

3. No Sign-Up Required

You can receive a payment quickly without sharing any sensitive data.
With many other forms of payment, the recipient is required to share
their routing/account number and sign up for that service in order to be
paid. With DPX eChecks, you can retrieve the check as a guest without
either sharing any of your sensitive data or requiring you to sign up.

➢ Electronic wallet

Definition: E-wallet is a type of electronic card which is used for

transactions made online through a computer or a smartphone. Its
utility is same as a credit or debit card. An E-wallet needs to be linked
with the individual’s bank account to make payments.

Descriptions: E-wallet is a type of pre-paid account in which a user can

store his/her money for any future online transaction. An E-wallet is
protected with a password. With the help of an E-wallet, one can make
71
payments for groceries, online purchases, and flight tickets, among
others.

E-wallet has mainly two components, software and information. The

software component stores personal information and provides security
and encryption of the data. The information component is a database
of details provided by the user which includes their name, shipping
address, payment method, amount to be paid, credit or debit card
details, etc

➔ Advantages of Electronic Wallets

1. It offers more convenience for many consumers

When you’re carrying an electronic wallet, you get to limit the number
of cards you carry when you travel. You no longer have the
requirement to carry a lot of cash with you either. All you need to do is
tap your device to the payment receptacle, or have your mobile device
scanned, to pay for the items you are purchasing. That means you’re no
longer carrying a pocketful of items wherever you go.

2. It provides access to other types of card

Electronic wallets typically store credit cards and debit cards. They can
be used for a wide variety of cards, however, if the provider is
compatible with the wallet you are using. That means you can store
rewards cards, loyalty cards, and even coupons within your digital
wallet, allowing you to enjoy more of a paperless lifestyle.

3. It offers more security.

72
If you have a wad of cash in your pocket that gets lost, you have zero
options available to you to recover your funds. Losing your credit cards
means you must contact each lender to cancel each card, then have a
new one issues. With an electronic wallet, the information is stored
through a third-party provider. It’s locked behind your password or
biometrics. Even if you lose your device, you’ll still have access to your
e-wallet once you get a new device.

4. It can be used at most retailers and online stores.

Electronic wallets have become widely accepted within the past few
years. Most locations that accept cards as a payment option will allow
you to pay with your electronic wallet. Although there are still some
locations that are using older processing technologies, which does limit
some product or service access, the number of retailers who provide
payment access in this manner continues to increase each year.

5. It requires users to authorize every transaction.

Electronic wallets function like a debit card when initiating a

transaction. They require you to input your PIN to authorize payment.
For devices with biometrics, a payment would require your fingerprint
to authorize it. That gives you another layer of security against
unauthorized purchases or the financial risks associated with identity
theft.

6. It may offer access to new rewards.

Many electronic wallets offer incentives to encourage consumers to use
them instead of traditional payment methods. You may find discounts
apply to certain purchases, such as fuel, food, or travel. Some
businesses may work with your e-wallet provide to offer specific
73
discounts as well. That means you have the potential to save money
without changing your spending habits. You’re just changing how you
pay for those items.

➢ Debit card

1. Debit cards eliminate the need to carry cash or physical checks to make
purchases, and they can also be used at ATMs to withdraw cash.

2. Debit cards usually have daily purchase limits, meaning it may not be
possible to make an especially large purchase with a debit card.

3. Debit card purchases can usually be made with or without a personal

identification number (PIN).

4. You may be charged an ATM transaction fee if you use your debit card to
withdraw cash from an ATM that's not affiliated with the bank that issued
your card.

5. Some debit cards offer reward programs, similar to credit card reward
programs, such as 1% back on all purchases.

➔ Advantages of debit card

There are several advantages of a debit card. The key advantages are as
follows:

✓ Debit card can be easily obtained:

When you open a savings or current account, most banks issue a free debit
card. Make sure that you fill in the necessary documentation to receive your
debit card
.
✓ Very convenient to use:

74
 One of the advantages of a debit card is that it can be swiped for
transactions as well as withdrawal of cash from ATMs.

✓ No more debts:

When you have a credit card, you are more likely to make impulsive
purchases. But a debit card keeps you in check as it is linked to your bank
account. You are only able to spend the amount that is in your account. You
don’t have to worry about the mounting credit card bills anymore.

✓ Easily accepted:

Debit cards are accepted widely all over India and at international
destinations. Make sure to authorise international transactions by simply
calling your bank. These debit cards can be used for cash withdrawal at
international ATMs too. So you don’t have to carry cash with you when you
are travelling.

✓ Earn rewards:

Offers are not restricted to credit cards alone. Using your debit card too can
help you gain rewards and cashbacindia offers. Several online and retail
outlets offer cashback offers for every purchase made on the debit card. The
points can be redeemed at any time to either purchase products from an
online catalogue of the bank or to earn shopping vouchers from various
brands.

➔ Disadvantages of debit card

75
There are certain disadvantages associated with using a debit card:

✓ No credit allowed:

A debit card is linked to your bank account. There is no possibility of making

any transaction on credit. All transactions and withdrawals are limited to the
balance available in your account.

✓ Difficult to dispute fraudulent use:

It is easier to fraudulently use your debit card. In case someone steals the
details of your card, especially the PIN and CVV, the chances of a fraudulent
transaction are very high. It is difficult to dispute such transactions with the
bank.

✓ Additional fees on ATM withdrawals:

Every bank offers you a limited number of free ATM transactions and other
non-financial transactions per month at the branches of other banks. Once
you exceed the limit of free withdrawals/ non-financial transactions, fees
are levied
➢ Credit card

A credit card is an instrument to help you make instant credit based

transactions.
Unlike debit cards which are linked to your bank accounts and debit the
corresponding amount for every transaction, credit cards offer you the
flexibility to make transactions on credit independent of your account
balance. These amounts however are repayable at the end of a pre-
specified credit period, and each credit card involves a credit limit
beyond which transactions cannot be made.

76
➔ Advantages of using credit cards
There are many advantages when using a credit card as a method
for purchasing goods. It does not necessarily mean that you do not
have funds to cover those purchases.
The use of a credit card, instead of cash or personal funds, offers the
following advantages:

1. Building credit history.

2. A quick source of funds in an “absolute” emergency
3. No accrued interest if bill is paid on time and in full each month
4. Zero liability as consumers is not responsible for fraudulent charges
when reported promptly.
5. Consumer protection ($50.00) if fraudulent charges are reported
promptly in case the card is stolen or lost.

➔ Disadvantages of using credit cards

Along with the advantages listed above, the use of credit cards can also
have several disadvantages:

1. Established credit-worthiness needed before getting a credit card

2. Encouraging impulsive and unnecessary “wanted” purchases
3. High-interest rates if not paid in full by the due date
4. Annual fees for some credit cards – can become expensive over the
years
5. Fee charged for late payments
6. Negative effect on credit history and credit score in case of improper
usage

➢ Smart card
77
A smart card is a physical card that has an embedded integrated chip
that acts as a security token. Smart cards are typically the same size as
a driver's license or credit card and can be made out of metal or plastic.
They connect to a reader either by direct physical contact (also known
as chip and dip) or through a short-range wireless connectivity standard
such as radio-frequency identification (RFID) or near-field
communication (NFC).

The chip on a smart card can be either a microcontroller or an

embedded memory chip. Smart cards are designed to be tamper-
resistant and use encryption to provide protection for in-memory
information. Those cards with microcontroller chips can perform on-
card processing functions and can manipulate information in the chip's
memory.

➔ Advantages Of Smart Cards

Smart cards provide different ways to
securely identify and authenticate the holder and others who want to
gain access to the card safely through A PIN code or biometric data. With
a deeper understanding of the significant and unique features and
advantages of smart cards, consumers and issuing organizations are
more likely to worth considering the idea of using them. Here are the
other advantages of smart cards:

1. due to they consist of a tamper-resistant microprocessor, they have

interesting processing power to protect the information, encrypt and
execute instructions from specific programs. a result of that, smart cards
are offer high security and confidentiality than other financial
information or transaction storage vehicles and are used worldwide in
applications where the security and privacy of information are critical
requirements.

78
2. The smart card was programmed to be read flexibly and easily by a
wide range of devices and readers or by multi-technology readers and in
various expandable locations by adding new control panels and readers.

3. These cards support digital signatures, which can be used to check the
guarantee and validity issues by the organization and that the data on
the card is correct and has not been changed fraudulently since the
issuance.

4. Smart cards have two different types of interfaces: contact and

contactless which is indicated to making physical contact with the reader
or not. So smart cards can help protect corporate information networks
— so-called logical access control, and also with physical access control
for entry into a facility. For example, IT departments seek logical access
as a lock on a company’s information on the computer network.

5. Smart cards can support a wide variety of functions and high capacity
to store information on the card and the flexibility for securely adding
information

➢ Store value card

A stored-value card (SVC) is a payment card with a monetary value

stored on the card itself, not in an external account maintained by a
financial institution. This means no network access is required by the
payment collection terminals as funds can be withdrawn and deposited
straight from the card. Like cash, payment cards can be used
anonymously as the person holding the card can use the funds.

79
 They are an electronic development of token coins and are typically
used in low-value payment systems or where network access is difficult
or expensive to implement, such as parking machines, public transport
systems, closed payment systems in locations such as ships or within
companies.

➔ Advantage of SVC

1. Merchandise returns.
Going forward, you can use store value cards instead of actual cash
to reimburse customers for returned merchandise. That way, you
are guaranteeing that the money will be spent in your store. Store
value cards help to provide you with assurances that you will not be
losing out when customers bring your items back. Giving them store
credits will encourage them to come back to spend again.
2. Promotional marketing tools.
You can use your store value cards as excellent promotional
items. It’s always a good idea to launch advertising campaigns
in order to draw more customers into your store. Why not run a
contest where the winner receives a free store value card? You
may also want to offer up these cards and place $5 increments
on each of them to people who visit your store during a certain
promotion. Naturally, you can encourage them to “top up” once
they’ve used up the five bucks.
3. Repeat business.
Store value cards promote customer loyalty. When someone really
loves your place of business, he or she is bound to come back. So
having a store value card will help to provide that incentive to return
for some shopping. As well, such cards also make great gifts. After
all, they are still gift cards. And when people get to decide how much

80
 they wish to place on their cards, they make for an even more
convenient purchases than normal.
4. Corporate gifts.
Speaking of making gifts out of store value cards, they are arguably
the best possible gifts that you can give your employees. Sure, they
may enjoy their employee discounts. But nothing beats free! Reward
your staff members with these cards that not only allow them to
shop in your store, but encourage them to continue to do so. Loyalty
from within is often the greatest way to further promote your brand.
5. Customer appreciation.
Speaking of loyalty, you never want to forget your favourite
customers. It is often said that it is easier to keep your current
customers than it is to attract new ones. So never forget the ones
who have already leant you their support. Show your regular
customers that you appreciate them by giving them store value
cards with denominations of your choice. Again, it will help to keep
bringing them back.

➢ Net banking & Mobile banking

Mobile banking is a mode of online banking by the banks that allows

the customers to perform any transactions via their cellular devices like
smartphones or the tab. Mobile banking allows you to make any
financial transaction anytime and from anywhere because all you need
is your smartphone. With the introduction of mobile banking,
transactions are now under your fingertips within few clicks.

81
Internet banking, on the other hand, is also a form of online banking
that allows customers to perform any financial transaction using the
internet on any electronic device. Internet banking has contributed a
lot in evolving the banking system as with the internet form of banking,
you do not need to visit the exact branch of your bank for any small or
big transaction.

➔ Difference btw. Net/mobile banking

Parameters
of
Comparison Mobile Banking Internet Banking

It is also an online-based
It is an online-based system that allows
banking system that customers to make
allows customers to transactions through any
make transactions via electronic device using the
Meaning their cellular devices. internet.

Devices Mobile, tab, basically

used any smartphone. Desktop

Mobile banking has Internet banking has

some limitations in its comparatively much more
functioning as it is quite functions than mobile
Functions complicated. banking.

82
 Funds are transferred Funds are transferred
Transfer of through NEFT or through NEFT, TRGS, or
Funds RTGS. IMPS.

Mobile banking is used

for any short message Internet banking is more
service or immediate used by banks and their
Uses funds transfers. websites

➢ Internet technologies

83
That group of technologies that allow users to access information and
communication over the World Wide Web (Web browsers, ftp, e-mail,
associated hardware, Internet service providers, and so forth).

Application of technologies and Internet-based communication and

information tools to get, store and send data in the business context.

Internet Technologies is a technical field that covers the necessary skills

to develop applications on the Internet or Internet based systems,
harnessing e-commerce, cloud, mobile, and Web based technologies.

➔ How internt technologies help E-BUSINESS

84
 The Internet provides a universally available set of technologies
for electronic commerce that can be used to create new channels
for marketing, sales, and customer support and to eliminate
intermediaries in buy-and-sell transactions.
 The Internet is rapidly becoming the infrastructure of choice for
electronic commerce and electronic business because it provides
a universal and easy-to-use set of technologies and technology
standards that can be adopted by all organizations, no matter
which computer system or information technology platform they
use.
 Internet technology provides a much lower cost and easier to use
alternative for coordination activities than proprietary networks.
Companies can use Internet technology to radically reduce their
transaction and agency costs.
 Electronic commerce is the process of buying and selling goods
electronically with computerized business transactions using the
Internet or other digital network technology. It includes
marketing, customer support, delivery, and payment. The three
major types of electronic commerce are business-to-consumer
(B2C), business-to-business (B2B), and consumer-to-consumer
(C2C).

THANK YOU FOR VISITING US..!

:- KAUSHIK

85