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E-Payments & Saudi Arabian e-Infrastructure 072
MIS 300 - Fundamentals of E-Commerce
Mr. Mustafa Faisal [email protected]
Chapter Outline
E-Payments Chapter 11 (selected coverage)• Online payments basic• The use of payment cards in electronic commerce• Electronic CashSaudi Arabian E-Commerce Scenario• Saudi e-Payment Solutions• SWOT Analysis of Saudi Arabian E-Commerce Market• Saudi Arabian Internet Users (e-statistics)• Important Organizations to know
E-Payments
Online Payment Basics
Credit cards, and debit (ATM) cards account for more than 90 percent of all consumer payments in the United States.
Saudi Arabia is not really that different. There has been a large rise in the use of ATM and credit cards in the last 10 years in Saudi Arabia.
Payment CardsDescribe all types of plastic cards used to make purchases
Credit card (Visa, Mastercard)
Has spending limit based on a user’s credit history
Debit card (ATM card)Removes an amount from a cardholder’s bank account
Transfers it to the seller’s bank account
Charge card (American ExpressCarries no spending limit
Amount charged is due at the end of the billing period
Advantages and Disadvantages of Payment Cards
Advantage
Worldwide acceptance
Built-in security for merchants
Disadvantage
Payment card service companies charge merchants per-transaction fees and monthly processing fees
Payment Acceptance and Processing
Steps followed once a merchant receives a consumer’s payment card information
Merchant authenticates payment card
Merchant checks with payment card issuer
To ensure that credit or funds are available
Puts a hold on the credit line or the funds needed to cover the charge
Settlement occurs
Merchant Accounts
To process payment cards for Internet transactions an online merchant must set up a merchant account
New merchant must supply
Business plan
Details about existing bank accounts
Business and personal credit history
Processing a Payment Card Transaction
Electronic Cash
Term that describes any value storage and exchange system created by a private entity that
Does not use paper documents or coinsCan serve as a substitute for government-issued physical currency
Attractive in two arenasSale of goods and services of less than $10Sale of higher-priced goods and services to those without credit cards
Advantages and Disadvantages of Electronic Cash
Advantages of electronic cashTransactions are more efficient
Transfer on the Internet costs less than processing credit card transactions
Disadvantages of electronic cashUse provides no audit trail
E-Cash has not been successful up to now
Problem of money laundering arises
Susceptible to forgery
Electronic Cash
Electronic cash is a commercial flop
PayPal
PayPalProvides payment processing services to businesses and to individualsPeer-to-peer (P2P) payment system
Free payment clearing service for individualsNOW AVAILABLE IN SAUDI ARABIA
Phishing – A very serious threat to E- Commerce
Basic structureAttacker sends e-mail messages to a large number of recipientsMessage states that an account has been compromised and the matter should be corrected Message includes a linkUser enters a login name and password, which the perpetrator capturesOnce inside a victim’s account, the perpetrator can access personal information
Phishing Attack Countermeasures
Most important step that companies can take today
Educate Web site users
Many companies contract consulting firms that specialize in anti-phishing workAnti-phishing technique
Monitor online chat rooms used by criminals
Saudi Arabian E-Commerce Scenario
Saudi Arabian E-Payment Solutions
Saudi Arabian E-Payment Solutions
Saudi American Bank (SAMBA) –SambaConnect is the name of the product.
Samba E-WalletSamba E-BankingVisa, MastercardSaudi ATM card
Al Rajhi Bank
National Commercial Bank (NCB)
SWOT Analysis of Saudi Arabian E-Commerce Market
Strengths WeaknessesCenter for Islamic WorldThe largest Arab economy Free market with minimum taxesHigh per capita incomeHigh youth populationThe largest IT market in the region
Lack of local IT professionalsLack of sufficient and affordable facilities for
education and training of localsVery high cost of Internet accessTelecom operator monopolyNon-existent legal environment for E-
Commerce transactionsLack of basic infrastructure for secured
transactions
Opportunities ThreatsE-commerce enables access to regional and
global marketplacesInternet is an important engine for economic
growthInternet helps reduce cost of doing business
(e.g., B2B procurement cost)With trade barriers coming down, environment
for E-Business is becoming more conduciveeGovernment systems enable convenient and
responsive services for citizens
Regional E-Business initiatives from UAE, Dubai, and Egypt Admission to WTO will lower the legal barriers thus local firms will be exposed to higher international competitionCultural backlash towards the internet
Saudi Arabian Internet Access (cont)
First Level: ISPsThese are commercial companies that provide internet access to the general public, government and private sector through dialupand leased lines. ISPs are connected to the National Backbone and to the International link at ISU. They provide their subscribers with access to these networks. In addition ISPs provide subscription accounting, customer support and other value added information services.
Second Level: National BackboneThe Saudi Telecomm Company (STC) is developing a high speed network connecting most parts of the Kingdom together. Currently, the main regions of the Kingdom are covered by this backbone with expansion planned for the remaining regions. ISU and all ISPs are connected to the National Backbone which carries Internet traffic inside the Kingdom and to the International Link.
Third Level: International LinkThis is the link which connects the National Backbone to the International Internet. The International link is operated by ISU and all international traffic to the Kingdom pass through this link.
Saudi Arabian Internet Users
Saudi Arabian Internet Users
Internet users in Saudi Arabia are estimated to be around 4.7 Million by the end of 2006, the largest number among Arab countries, as shown in the figure on the next slide. In terms of internet penetration rates, however, KSA (19.6%) ranks fourth in the Arab World (after UAE, Kuwait and Bahrain). KSA Internet penetration rate is higher than Arab countries average (7%), developing countries average (10%) and global average (16%), but is well below the developed countries average internet penetration rate of around 60%.
All IP traffic from the Eastern Province and Riyadh exits and enters KSA from Riyadh - the Western region’s IP traffic from Jeddah.
Saudi Arabian Internet Connectivity
Saudi Arabian Domain Name (.sa)
What is the Saudi Network Information Center?
SaudiNIC
is the entity that is responsible for the administration of the
domain name space for the country code (ccTLD) of Saudi Arabia (.SA). This includes the operation of the DNS root servers for .SA domains as well as the registration and maintenance of all third-level .SA domain names.
Based on the Council of Ministers' decree No. 229 dated 13/8/1427h the task of operating and administering the Saudi Network Information Center
(SaudiNIC) was moved from King Abdulaziz City for Science and Technology (KACST) to the Communications and Information Technology Commission (CITC). The
SaudiNIC
was established in 1995 by KACST.
Mission StatementThe mission of SaudiNIC
is to provide an equitable, just and competent technical and administrative management of domain name registrations and IP address allocations for Internet community in Saudi Arabia.
CERT-SA’s
Mission
To increase the information security awareness level in the Kingdom of Saudi Arabia
To coordinate national effort towards promoting IT Security best practices and creating trust among cyber community
To help managing information security attacks and incidents in the Kingdom of Saudi Arabia
To be the reference point in information security for the Cyber Community in the Kingdom of Saudi Arabia
To build Saudi talent and human capacity in the field of information security in the Kingdom of Saudi Arabia
To provide a trusted environment for e-transactions
to foster trust, cooperation and collaboration among our constituents and the general cyber community in the Kingdom
Saudi e-Statistics
Saudi e-Statistics
Important ‘Saudi Arabian’ Links
Saudi Network Information Center (SaudiNIC): www.nic.net.saCERT-SA: www.cert.gov.saInternet Services Unit www.isu.net.saCommunications and Information Technology Commission: www.citc.gov.saSaudi E-Government: www.yesser.gov.saSaudi Internet Portal: www.internet.gov.sa