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E-Business Models and Payments: B2B and Electronic Commerce, Exams of Effective Business Communication

Various e-business models, focusing on business-to-business (b2b) and electronic commerce payments. It covers different payment methods such as credit cards, electronic checks, and smart cards. The document also mentions the use of electronic data interchange (edi) for large-scale payments.

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2018/2019

Uploaded on 09/22/2019

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Question Paper
E-Business (MB351IT) : July 2005
Section A : Basic Concepts (30 Marks)
This section consists of questions with serial number 1 - 30.
Answer all questions.
Each question carries one mark.
Maximum time for answering Section A is 30 Minutes.
1. Which of the following facilitates communication between small groups in real-time?
(a) e-mail
(b) File transfer protocol
(c) News groups
(d) Internet Relay Chat (IRC)
(e) Bulletin boards.
< Answer >
2. Organizations use e-business for
I. Business efficiency.
II. Reshaping customer relationship.
III. Reaching new markets and segments.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) All (I),(II) and (III) above.
< Answer >
3. The ability of e-
b
usiness systems to handle numerous users concurrently and allowing them to complete
transactions in the minimum possible time is known as
I. Scalability.
II. Modularity.
III. Portability.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) All (I), (II) and (III) above.
< Answer >
4. Which of the following is/are the components of e-enabled sell site?
I. Catalogs.
II. Shopping cart.
III. Configurator.
(a) Only (I) above
(b) Only (II) above
(c) Only (III) above
(d) Both (I) and (II) above
(e) All (I), (II) and (III) above.
< Answer >
5. In value network management, the company can outsource its pipeline business processes to
(a) Strategic Service Partners (SSPs)
(b) Value Added Suppliers (VAS)
(c) Commodity Suppliers (CSs)
(d) Non-strategic Service Partners (NSPs)
(e) Network Operations Partner (NOP).
< Answer >
6. Convergence in e-
b
usiness may be defined as a process in which companies change the established
boundaries between industries in their attempt to achieve
< Answer >
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Question Paper

E-Business (MB351IT) : July 2005

Section A : Basic Concepts (30 Marks)

  • This section consists of questions with serial number 1 - 30.
  • Answer all questions.
  • Each question carries one mark.
  • Maximum time for answering Section A is 30 Minutes. 1. Which of the following facilitates communication between small groups in real-time?

(a) e-mail (b) File transfer protocol (c) News groups (d) Internet Relay Chat (IRC) (e) Bulletin boards.

< Answer >

2. Organizations use e-business for

I. Business efficiency. II. Reshaping customer relationship. III. Reaching new markets and segments.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I),(II) and (III) above.

< Answer >

3. The ability of e-business systems to handle numerous users concurrently and allowing them to complete transactions in the minimum possible time is known as

I. Scalability. II. Modularity. III. Portability.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

4. Which of the following is/are the components of e-enabled sell site?

I. Catalogs. II. Shopping cart. III. Configurator. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

5. In value network management, the company can outsource its pipeline business processes to

(a) Strategic Service Partners (SSPs) (b) Value Added Suppliers (VAS) (c) Commodity Suppliers (CSs) (d) Non-strategic Service Partners (NSPs) (e) Network Operations Partner (NOP).

< Answer >

6. Convergence in e-business may be defined as a process in which companies change the established boundaries between industries in their attempt to achieve

< Answer >

(a) New competitive advantage (b) New production facilities (c) New operation facilities (d) New transportation facilities (e) New training facilities.

7. Which of the following is not a key driver of convergence?

(a) Technology (b) Deregulation of markets (c) Increasing expectations of customers (d) Competitive imperatives (e) Regulation of Industry.

< Answer >

8. Which of the following convergence strategies involves leveraging customer relationships by selling associated products and services and enhancing the scope of customer relationships?

(a) Bundling (b) Gatekeeping (c) Intermediation (d) Brand acquisition (e) Cross-industry competence.

< Answer >

9. The benefits of making the product development process is/are

I. Reduction in risks in launching of products. II. Faster and effective capturing of client information and feedback. III. In-depth market research.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

10. In which of the following steps of e-business planning a model of the plan is prepared?

I. Prioritizing. II. Business case for action. III. Application implementation.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

11. Which of the following types of e-business projects will be undertaken by companies that are trying to explore new markets or new business opportunities?

I. Incremental. II. Breakthroughs. III. Platform.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

12. Which of the following is/are the key elements of e-business case?

I. Justification of the project. II. Preliminary assessment of the scope of the project. III. Project planning.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

III. Intelligent supply chains. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

20. Which of the following supply chain models is suitable for a mass-production environment?

(a) Integrated make-to-stock (b) Continuous replenishment (c) Build-to-order (d) Outsourcing (e) Buy-to-order.

< Answer >

21. Which of the following is not a component of e-supply chain?

(a) Supply chain replenishment (b) Collaborative planning (c) Collaborative forecasting (d) Collaborative product development (e) E-procurement.

< Answer >

22. Which of the following is not an advantage of implementing ERP system in an organization?

(a) Lead time reduction (b) Punctuality in shipment (c) Increase in cycle time (d) Enhanced customer satisfaction (e) Improved supplier performance.

< Answer >

23. Which of the following is not a knowledge warehouse?

(a) Analytic (b) Audio (c) Document (d) Image (e) Text.

< Answer >

24. Which of the following is/are the essential functions of Online Analytical Processing (OLAP)?

I. Drilling. II. Slicing and dicing. III. Changing displays.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

25. Which of the following is not an Online Analytical Processing (OLAP) tool?

(a) Desktop OLAP (b) Multidimensional OLAP (c) Digitized OLAP (d) Relational OLAP (e) Hybrid OLAP.

< Answer >

26. Which of the following is not a database marketing strategy?

(a) Targeting (b) Skimming (c) Tailoring (d) Tying (e) Tapping.

< Answer >

27. Which of the following data storage devices is/are used for sharing storage capacity on a network?

I. Direct Attached Storage (DAS). II. Network Attached Storage (NAS). III. Storage Area Networks (SAN). (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

28. Which of the following technologies offers web browsing and email access through mobile phones?

I. Bluetooth. II. I-Mode. III. WAP. (a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

29. The conversion of plain text message to cipher text is known as

I. Cryptography. II. Encryption. III. Decryption.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

30. Which of the following cryptographic algorithms uses the same key for encrypting and decrypting messages?

I. Symmetric Key Cryptography. II. Public Key Cryptography. III. Hybrid key Cryptography.

(a) Only (I) above (b) Only (II) above (c) Only (III) above (d) Both (I) and (II) above (e) All (I), (II) and (III) above.

< Answer >

END OF SECTION A

6. What strategies to be adopted by financial services firms such as Bancolombia to target e-customers?

(5 marks) < Answer >

It was late June, a temperate season in Medillin, Colombia. But, for Natalia Ballesteros, the climate was anything but calm. The bank for which she had managed online services for several years, Banco Industrial Colombiano (BIC), had merged with Banco de Colombia. The new bank, Bancolombia, had become the largest private bank in the country, with 1.3 million customers, 344 branches and more than 800 ATM machines.

According to the merger plan, Ballesteros had time only till, January 25th to establish a new online banking service for Bancolombia. This "virtual branch" would serve a new Web-only customer base and also function as an information site for the rest of Bancolombia's customers. Ballesteros had to integrate all of the former banks' services into the new virtual branch. And, she only had one staff member to help her.

Enter IBM Global Services. Leveraging BIC's existing Lotus Notes and Domino infrastructure, IBM created a "banking mall" using IBM Net.Commerce PRO with IBM DB2 Universal Database for Windows NT. At the mall, virtual-branch customers can open accounts, order checks, apply for credit and debit cards or perform any other transaction that would normally be conducted at a bank branch. Together with Lotus Consulting, IBM integrated the Website with the bank's back-end workflow systems. This has enabled the virtual branch to deliver on its promise of two-hour application approval -- a 98% faster process than traditional mail approval, which took as long as ten days.

Launched precisely on the appointed date, the virtual branch is attracting many busy professionals who prefer the convenience of the online-only service. In its first five months, the virtual branch signed on twice as many customers as it had planned for in the entire year. Additionally, 30,000 traditional Bancolombia branch customers use the site to access their account information, and that number is expected to reach 50,000 by the end of the year.

Despite the growing user base, Ballesteros and her colleague haven't required any additional staff to manage the virtual branch. With existing Lotus Notes clients providing an intuitive interface to the virtual branch, the bank's product managers are handling the Website administration with little training. Likewise, the call center representatives are using their existing skills and applications to handle online customer support for the virtual branch.

With such an efficient use of resources, the cost of operating the virtual branch is negligible compared with a brick-and- mortar branch. "The cost of an average transaction through a physical branch is $2," Ballesteros explains, "but, through the virtual branch it's 10? -- a 95% saving."

Based on revenue from 100 new virtual-branch customers per month, and the cost savings associated with serving those customers, the bank expects to recoup its initial investment in the virtual branch in one to two years.

Online banking fits retail shopping model

The banking mall scheme was a result of the collaboration between Bancolombia and IBM. "When we started working with IBM, we were thinking mostly about performing transactions," Ballesteros recalls, "but IBM pointed out that a more consultative approach would be important to customers who never visit a physical branch. They suggested that Net.Commerce could help fulfill this role."

According to the shopping metaphor, the virtual branch functions as an online store that sells banking products. Net.Commerce acts as the merchant server, presenting a catalog of product descriptions stored in DB2 Universal Database on a Microsoft® Windows NT server.

IBM populated the catalog database and migrated BIC's legacy HTML pages from a Netscape Web server to Lotus Domino. According to Ivan Daniel Rincon, associate principal of e-business services with IBM Global Services, "This was one of the first applications of Net.Commerce on top of a Domino server infrastructure. We found it to be an excellent way to leverage the bank's existing software assets and application skills."

"Call center staff can serve virtual-branch customers using the same Lotus Notes databases they reference when taking calls, so there's no additional outlay for customer support software."-Natalia Ballesteros

IBM, Lotus integrate Web site with workflow

Online customers can search the Bancolombia virtual branch like any online catalog. When they aren't sure which bank account, credit card or other product will best meet their needs, they can consult with the bank's "financial simulators." Developed by IBM Global Services, the simulators start with an online questionnaire, which defines the customer's financial position and needs. JavaScript routines are used to compare the customer's answers with product specifications stored in a Lotus Notes database. The results of the comparison -- suggested accounts, credit cards or services -- are returned to the customer a few seconds later.

When customers decide to "purchase" a banking product -- that is, apply for a credit card, open an account or order checks -- they fill out an online form. Here's where Bancolombia's workflow comes into the picture. Lotus NotesPump extracts the information from the HTML form and loads it into the Domino server to start the workflow process. For example, a credit card application would be routed to the bank's credit department, which would perform the credit

check and respond within two hours with an approval or a denial. According to Ballesteros, IBM's complete solution and project management were key factors in meeting the bank's deadline. "We also looked at Microsoft's e-commerce offerings," she says, "but we preferred IBM because we needed not only the products but also the know -- how and help to complete this project on time."

Product managers update the site

The virtual branch offers some 20 different banking products. Product managers are responsible for keeping their respective Web pages up to date, saving Ballesteros countless hours of routine administration. Managers use the Product Advisor feature in Net.Commerce PRO to update interest rates, terms of payment and other product specifications. "At BIC, my colleague and I spent all day updating the site with [Microsoft] Front Page," she recalls. "Now, with inflation on the rise in Colombia, exchange rates and interest rates change almost every day. I don't have time to handle this."

Typically, the Net.Commerce Product Advisor makes updates to DB2 tables. With some custom code written by IBM Global Services, product managers can perform these updates from within the Notes environment with which they are already familiar.

Call center staff go online

Even with the most comprehensive information and efficient service, customers will always have questions. So, Bancolombia's virtual branch provides an e-mail link for customer support, both for its online-only customers and for traditional customers using the online service. But Ballesteros and her partner couldn't possibly manage the influx of e- mail from the Bancolombia customer base. "We get more than a hundred messages per day," Ballesteros says. "So, we decided to integrate the virtual branch with our call center."

During off-peak calling hours, between 7:00 P.M. and 7:00 A.M., call center staff members respond to e-mails from the virtual branch. "We are leveraging their existing customer support skills, so we don't need to invest in training," Ballesteros explains. "In addition, call center staff can serve virtual-branch customers using the same Lotus Notes databases they reference when taking calls, so there's no additional outlay for customer support software."

Corporate banking: the bigger market

The virtual branch was initially designed to provide consumer-banking services, but 70% of Bancolombia's customers are businesses. Consequently, the next three phases of its virtual branch project with IBM Global Services will include business-to-business banking, payment services and bill presentment. "This is just the beginning," Ballesteros says. "With IBM and Lotus, all of our plans for the virtual branch are quickly becoming a reality."

END OF SECTION B

Section C : Applied Theory (20 Marks)

This section consists of questions with serial number 7 - 8. Answer all questions. Marks are indicated against each question. Do not spend more than 25 -30 minutes on section C.

7. Organizations planning to do e-business must develop a stable and sustainable e-business model. What are the various types of e-business models? Explain in detail any three e-business models citing examples for each of them.

(10 marks) < Answer >

8. Electronic payment systems have become very popular in the banking, retail, healthcare, on-line markets and even government sector. Write a note on the types of electronic payment systems, explaining their applications in the above sectors and their benefits.

(10 marks) < Answer >

END OF SECTION C

  1. Answer : (a)

Reason : The basic steps in e-business planning are prioritization, preparing business case for action and application implementation. In prioritization, a model of the plan is prepared. So option (a) is the answer.

< TOP >

  1. Answer : (b)

Reason : Breakthroughs or radical projects are undertaken by companies that are trying to explore new markets or new business opportunities. So option (b) is the answer.

< TOP >

  1. Answer : (e)

Reason : The following are the key elements of e-business case:

I. Justification of the project. II. Preliminary assessment of the scope of the project. III. Project planning So option (e) is the answer.

< TOP >

  1. Answer : (a)

Reason : The first step in e-business design is self-diagnosis by the company. So option (a) is the answer.

< TOP >

  1. Answer : (e)

Reason : To focus creative thinking and retain leadership, companies usually use three types of competencies. They are service excellence, operational excellence, and continuous innovation excellence. So option (e) is the answer.

< TOP >

  1. Answer : (e)

Reason : The evolution of e-marketplaces consists of four major phases. These phases are commodity exchanges, value-added e-marketplaces, global knowledge exchanges and value trust networks. So option (e) is the answer

< TOP >

  1. Answer : (e)

Reason : All the three namely direct B2B,coalition, independent are various e- marketplace models. So option (e) is the answer.

< TOP >

  1. Answer : (a)

Reason : Except raw materials all the other alternatives like paper ,food ,agricultural and Textile products comes under the category of operating resource products. So option (a) is the answer.

< TOP >

  1. Answer : (b)

Reason : Vertical portals provide industry –specific information where as horizontal portals provide general information about different industries. So Yahoo.com is an example of horizontal procurement portal.

< TOP >

  1. Answer : (e)

Reason : All the three namely responsive supply chains,enterprising supply chains and intelligent supply chains are the various types of enterprise- integration. So option (e) is the answer.

< TOP >

  1. Answer : (a)

Reason : Integrated make-to-stock is used for mass production environment. So option (a) is the answer.

< TOP >

  1. Answer : (c)

Reason : Except (c) all the other alternatives like supply chain replenishment, collaborative planning, collaborative product development, e- procurement and e-logistics are the components of e-supply chain. So option (c) is the answer.

< TOP >

  1. Answer : (c)

Reason : The advantages of implementing ERP system in an organization are reduction in cycle time, lead time reduction, punctuality in shipment, enhanced customer satisfaction, improved supplier performance and flexibility and reduction in quality cost etc. So option (c) is the answer.

< TOP >

  1. Answer : (e)

Reason : except (e) all the other alternatives are various knowledge warehouses namely analytic, audio, document and image warehouses. So option (e) is the answer.

< TOP >

  1. Answer : (e)

Reason : The essential functions of Online Analytical Processing (OLAP) are drilling, slicing and dicing , changing displays. So option (e) is the answer.

< TOP >

  1. Answer : (c)

Reason : Except (c) all the other alternatives are various types of Online Analytical Processing (OLAP) tools. So option (c) is the answer.

< TOP >

  1. Answer : (b)

Reason : Except (b) all the other alternatives are various database marketing strategies. So option (b) is the answer. Skimming is a pricing strategy.

< TOP >

  1. Answer : (b)

Reason : The Network Attached Storage (NAS) device is used for sharing storage capacity on a network. So option (b) is the answer.

< TOP >

  1. Answer : (b)

Reason : The I-Mode technology offers web browsing and email access through mobile phones. So option (b) is the answer.

< TOP >

  1. Answer : (b)

Reason : The conversion of a plain text message to a cipher text is known as encryption. So option (b) is the answer.

< TOP >

  1. Answer : (a)

Reason : The symmetric key cryptography uses the same key for encrypting and decrypting messages. So option (a) is the answer.

< TOP >

servers supporting 123.com’s production environment are clustered and a third enterprise server can provide fail- over for disaster recovery. The cluster will give the company ability to quickly fail-over, if a server or database is unavailable, the other can take over. The enterprise servers will provide an ideal platform to 123.com for numerous applications including enterprise resource planning, e-commerce, data warehousing, Internet/Intranet and customer management systems. With the clustered server architecture, 123.com can significantly improve its site availability. It can also handle a much higher traffic. To tackle the problems in its storage system, 123.com must develop a storage solution, with high availability, resilience, and serviceability also known as Storage Area Network (SAN). The company should move and segment its entire database server into smaller servers. This will help to ensure that the company will not have any single point of failure. In other words, an outage will affect just a portion of the system not the whole site. It will also be more cost-effective because the SAN will enable the company to have six or more front-end machines to every two-recovery machine instead of a one-to-one cluster. A SAN will also allow the company to scale the system without accruing any downtime. 123.com also needs a major software revamp to improve its site availability and make it more dynamic and interconnected. It also needs to revamp its server-side application development architecture to support the Java 2 Enterprise Edition (J2EE) and Enterprise JavaBeans. It is assumed that the company is using C++ object framework that requires a lot of structural programming. Though C++ environment is more flexible than Cobol, it cannot compete with J2EE, which is becoming the de facto application development framework. J2EE’s objects can handle a much higher level of abstraction than C++. The new applications will more widely distribute, running across multiple machines and rely on data-dependent routing, which utilizes server cache more efficiently. With all the above changes, 123.com’s e-business infrastructure will not only become highly flexible to handle instant recoding but also sturdy enough to process a very high number of transactions every minute < TOP >

3. The data storage requirements of 123.com can be efficiently met by the use of DAS, NAS and SAN devices. These applications of these devices are:

Direct Attached Storage (DAS): DAS storage devices provide a direct connection to a single server. To connect these devices, workstations use network servers. Since these devices generally handle distributed applications (e.g. e-mails and databases), their performance is not as high as NAS devices. Component considerations that determine the storage standards in DAS are:

  • DAS available for a dedicated file server.
  • It does not support remote storage connectivity.
  • Absence of common storage platforms.
  • DAS does not have centralized data storage.
  • DAS lacks independence from host computer.
  • DAS has network limitations. Though DAS devices have several limitations regarding storage, they also have certain benefits. The benefits of DAS are:
  • They manage storage using network operating systems.
  • They are scaleable (upto 16 devices for each SCSI host adapter).
  • They do not have much dependence on network bandwidth.
  • Their operating systems are independent. Network Attached Storage (NAS): NAS is used for sharing storage capacity on a network. NAS devices enhance platform independence and enable better network performance. These devices support standalone and specific storage requirements. They communicate with the system using the Network File System (NFS) for UNIX environment, Common Internet File System (CIFS) for Microsoft Windows, FTP, HTTP and other network protocols. These devices are similar to plug-and-play appliances, except that they are used for data storage. They are suitable for server networks that service multiple clients and servers. Storage Area Networks (SAN): The SAN network, unlike the NAS network, is data centric, i.e. the server is fully dedicated to data storage. SANs use networks that are different from LAN and other messaging networks. In a SAN network, data transfer between dissimilar servers and storage environments is facilitated by gateways, switches and routers. SAN enhances data storage by providing network connectivity and supporting semi-remote storage (semi-remote storage refers to storage within a limited distance, approx. 10 km). SAN devices are best suited for the transfer of storage blocks. They are also suitable for data consolidation and data accessibility. The common features between NAS and SAN are:
  • They allow sharing of storage among several hosts.
  • They support multiple operating systems simultaneously.
  • They facilitate high data accessibility and integrity.
  • They have a separate storage space for the application server. < TOP > 4. Cryptography is the art and science of encrypting and decrypting data for the purpose of secrecy or authenticity. It facilitates the secure storage and transmission of critical data in an insecure network. Technically, cryptography is the process of using (or studying) electronic security systems, methods, or schemes that protect data by altering it in a way so that only the intended recipient is able to extract the original information. Encryption and Decryption mechanisms use an algorithm and a secret value that is known as a Key. Encryption involves the conversion of a plain text message to a cipher text or encrypted message. (Encryption can be done by an algorithm and a private encryption key). Without the correct key, it is impossible to decrypt the cipher text i.e. recover the original plain text message from the cipher text. A cryptographic algorithm, alternatively referred to as a cipher, is used for data encryption and decryption. A cipher is a mathematical function. This algorithm works with a key, which may either be a word, a number or a phrase for encrypting plain text. Algorithms are openly available, whereas Keys are kept secret and are used for providing the required security. Keys, also known as crypto variables, are the information or a sequence that control the enciphering and deciphering of messages. The data security is dependent on the strength of the algorithm and the secrecy of the key. All possible keys and protocols, together with the cryptography algorithm, form the cryptosystem. Conventional cryptography is also referred to as symmetric key encryption or secret key. It uses only one key for encrypting and decrypting the data. In asymmetric cryptography, the public key is used for encrypting while the private key is used for decrypting. The major benefit of this system is that it allows the secure transfer of data even among entities who don’t have any permanent security arrangement. A good example of a cryptosystem is the Pretty Good Privacy (PGP). PGP combines both conventional and public key cryptography. It can be termed as a hybrid cryptosystem. While using PGP, the data first gets compressed, thus saving time and disk space. The most important benefit of such compression is the enhancing of cryptographic security. Compression makes it more difficult for attackers to decipher the text. The PGP then creates a secret key that is randomly generated and is used only once. The secret key in combination with the encryption algorithm encrypts the plain text. After data encryption, the secret key is encrypted to recipients’ public key. This, along with the cipher text, is sent to the recipient. There are three types of cryptographic algorithms. These are described below:
  • Symmetric Key Cryptography: Also known as Private Key Cryptography or Single Key Cryptography, it uses the same key for encrypting and decrypting messages. In this case, since the key is the only data required to decrypt the cipher text, it is kept secret.
  • Public Key Cryptography: This algorithm uses a set of two complimentary keys for encryption and decryption. A public key is used to encrypt the message and a private key for decrypting the cipher text. Hence, a person having the public encryption key may encrypt and send a message to another person. However, only the person having the private decryption key can decipher the message. Both keys, referred to as a key pair, are created and used together.
  • Hybrid Public/Private Cryptography: In this case, a combination of public and private key cryptography is used. An exchange of an encrypted session key is done by using public key cryptography. The encrypted session that follows the exchanges is then pursued with private/symmetric key cryptography. The main objectives of cryptography are:
  • Authentication: This is achieved through two main services provided by cipher systems. The first service involves the identification of the origin of a message and verification of its authenticity. The second service involves the verification of the identity of the person trying to access the information and determining if the person is authorized for the same.
  • Confidentiality: Confidentiality is about providing privacy for messages and data by hiding the information using various encryption techniques.
  • Integrity: Both the senders and the recipient need to be assured that message remains unaltered.
  • Non-repudiation: It provides the proof that the document came from the sender even when the recipient tries to deny that < TOP > 5. IBM helped Bancolombia quickly create a virtual banking mall online. Utilizing the power of the Internet, customers can visit a "virtual branch" to perform in minutes most of the tasks that would ordinarily require a trip to a physical branch office. And, because it's tied to the existing call center, no additional staffing was needed for personalized customer assistance.

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8. Electronic payment systems are becoming popular in many industries – in fact, anywhere money needs to change hands. Organizations are motivated by the need to deliver products and services more cost effectively and to provide a higher quality of service to customers. Research into electronic payment systems for consumers can be traced back to the 1940s, and the first applications – credit cards – appeared soon after. In the early 1970s, the emerging electronic payment technology was labeled electronic funds transfer (EFT). EFT is defined as “any transfer of funds initiated through an electronic terminal, telephonic instrument, or computer or magnetic tape so as to order, instruct, or authorize a financial institution to debit or credit an account.” EFT utilizes computer and telecommunication components both to supply and to transfer money or financial marked contrast to conventional money and payment modes that rely on physical delivery of cash or checks (or other paper orders to pay) by truck, train, or airplane. Work on EFT can be segmented into three broad categories: a. Banking and financial payments - Large-scale or wholesale payments (e.g., bank-to-bank transfer) - Small-scale or retail payments (e.g., automated teller machines and cash dispensers) - Home banking (e.g., bill payment) b. Retailing payments - Credit cards (e.g. VISA or MasterCard) - Private label credit/debit cards (e.g. J.C. Penney Card) - Charge cards (e.g. American Express) c. On-line electronic commerce payments - Token-based payment systems Electronic cash (e.g. DigiCash) Electronic checks (e.g., NetCheque) Smart cards or debit cards (e.g. Mondex Electronic Currency Card) - Credit card-based payment systems Encrypted credit cards (e.g., World Wide Web form-based encryption) Third-party authorization numbers (e.g., First Virtual) Large-scale payments between banks and business, widely recognized as the pioneering efforts in electronic commerce involves an extensive use of electronic data interchange (EDI) for transferring payment and information. < TOP >

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