Unit 4.1

Unit 4 Intro: E-commerce Security and Payment Systems

IT 204: E-Commerce

Learning Objectives

By the end of this chapter, you will be able to:

✅ Define the six key dimensions of e-commerce security.
✅ Explain why security is a critical foundation for online commerce.
✅ Identify the unique security challenges within the Nepali e-commerce environment.

Why Security Matters ⚡

For e-commerce to function, a fundamental element must be present: Trust.

Both customers and merchants must be confident that their data and their money are safe.

In this unit, we will explore:

Major Security Threats
Key Technology Solutions (like Encryption)
Essential Management Policies
Electronic Payment Systems

The E-commerce Security Environment

The security environment is complex and constantly evolving. To build a comprehensive security plan, we must understand its core dimensions.

The Six Key Dimensions of Security 📊

Integrity
Nonrepudiation
Authenticity
Confidentiality
Privacy
Availability

Dimensions 1 & 2

1. Integrity

Ensuring information is not altered by an unauthorized party during transmission or on a website.

Example: Preventing a hacker from changing the price of an item from Rs. 1000 to Rs. 1 while it's in your shopping cart.

2. Nonrepudiation

The ability to ensure that participants cannot deny (repudiate) their online actions.

Example: A customer cannot deny placing an order, and a merchant cannot deny sending a shipment.

Dimensions 3 & 4

3. Authenticity

The ability to identify the identity of a person or entity you are dealing with online.

Example: Knowing you are giving your credit card details to daraz.com.np and not a fake phishing site.

4. Confidentiality

Ensuring messages and data are available only to those authorized to view them.

Example: Your credit card number is encrypted so that a snooper on the network cannot read it.

Dimensions 5 & 6

5. Privacy

The ability to control the use of personal information provided to an e-commerce merchant.

Example: You have the right to know how a merchant uses your purchase history and personal data.

6. Availability

Ensuring an e-commerce site continues to function as intended and is accessible to legitimate users.

Example: The website is protected from Denial-of-Service (DoS) attacks and remains online during a big sale event.

Practical Application: The Nepali Context 🇳🇵

The e-commerce security environment in Nepal is developing rapidly, but it faces several specific challenges.

Understanding these local challenges is crucial for building successful and secure e-commerce businesses in Nepal.

Key challenges include:

High prevalence of Cash on Delivery (COD)
Lack of public awareness about online security
A still-developing legal and regulatory framework
Limited use of secure payment gateways by smaller vendors

Challenge in Nepal: COD & Payment Security

High Reliance on Cash on Delivery (COD)

While popular, COD introduces physical security risks:

Risk of robbery for delivery personnel.
Risk of customers refusing payment upon delivery.
Increases cash handling complexity and costs.

Insecure Payment Methods

Many smaller businesses bypass secure gateways:

Payments via direct bank transfer or social media messages.
No automated verification or fraud protection.
Higher risk of payment disputes and scams for both parties.

Challenge in Nepal: Awareness & Regulation

🔍 Lack of Awareness

Many consumers are not fully aware of online risks, making them vulnerable to:

Phishing scams (fake login pages)
Fraudulent sellers
Identity theft

⚖️ Developing Legal Framework

The legal framework for e-commerce is still maturing. This can lead to:

Difficulty in prosecuting cybercriminals.
Unclear processes for consumer rights protection.
Ambiguity in handling cross-border transaction disputes.

Key Takeaways 🎯

E-commerce security is built on six core dimensions: Integrity, Nonrepudiation, Authenticity, Confidentiality, Privacy, and Availability.
Trust is the foundation of all e-commerce. Without security, there is no trust, and therefore, no transactions.
The Nepali e-commerce landscape has unique security challenges, including risks from COD prevalence and a need for greater consumer awareness and stronger regulation.

Thank You

Next Up: 4.2 - Security Threats in Detail

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