E-Payments & Saudi Arabian e-infrastructure

Transcription

1 MIS Fundamentals of E-Commerce 072 E-Payments & Saudi Arabian e-infrastructure Mr. Mustafa Faisal Ahmed mfahmed@kfupm.edu.sa

2 Chapter Outline E-Payments Chapter 11 (selected coverage) Online payments basic The use of payment cards in electronic commerce Electronic Cash Saudi 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

3 E-Payments

4 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.

5 Payment Cards Describe 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 Express Carries no spending limit Amount charged is due at the end of the billing period

6 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

7 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

8 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

9 Processing a Payment Card Transaction

10 Electronic Cash Term that describes any value storage and exchange system created by a private entity that Does not use paper documents or coins Can serve as a substitute for governmentissued physical currency Attractive in two arenas Sale of goods and services of less than $10 Sale of higher-priced goods and services to those without credit cards

11 Advantages and Disadvantages of Electronic Cash Advantages of electronic cash Transactions are more efficient Transfer on the Internet costs less than processing credit card transactions Disadvantages of electronic cash Use provides no audit trail E-Cash has not been successful up to now Problem of money laundering arises Susceptible to forgery

12 Electronic Cash Electronic cash is a commercial flop

13 PayPal PayPal Provides payment processing services to businesses and to individuals Peer-to-peer (P2P) payment system Free payment clearing service for individuals NOW AVAILABLE IN SAUDI ARABIA

14 Phishing A very serious threat to E- Commerce Basic structure Attacker sends messages to a large number of recipients Message states that an account has been compromised and the matter should be corrected Message includes a link User enters a login name and password, which the perpetrator captures Once inside a victim s account, the perpetrator can access personal information

15 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 work Anti-phishing technique Monitor online chat rooms used by criminals

16 Saudi Arabian E-Commerce Scenario

17 Saudi Arabian E-Payment Solutions

18 Saudi Arabian E-Payment Solutions Saudi American Bank (SAMBA) SambaConnect is the name of the product. Samba E-Wallet Samba E-Banking Visa, Mastercard Saudi ATM card Al Rajhi Bank National Commercial Bank (NCB)

19 SWOT Analysis of Saudi Arabian E-Commerce Market Strengths Center for Islamic World The largest Arab economy Free market with minimum taxes High per capita income High youth population The largest IT market in the region Opportunities E-commerce enables access to regional and global marketplaces Internet is an important engine for economic growth Internet helps reduce cost of doing business (e.g., B2B procurement cost) With trade barriers coming down, environment for E-Business is becoming more conducive egovernment systems enable convenient and responsive services for citizens Weaknesses Lack of local IT professionals Lack of sufficient and affordable facilities for education and training of locals Very high cost of Internet access Telecom operator monopoly Non-existent legal environment for E- Commerce transactions Lack of basic infrastructure for secured transactions Threats 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 competition Cultural backlash towards the internet

20 Saudi Arabian Internet Access (cont) First Level: ISPs These are commercial companies that provide internet access to the general public, government and private sector through dialup and 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 Backbone The 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 Link This 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.

21 Saudi Arabian Internet Users

22 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%.

23 Saudi Arabian Internet Connectivity All IP traffic from the Eastern Province and Riyadh exits and enters KSA from Riyadh - the Western region s IP traffic from Jeddah.

24 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 Statement The 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.

25 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

26 Saudi e-statistics

27 Saudi e-statistics

28 Important Saudi Arabian Links Saudi Network Information Center (SaudiNIC): CERT-SA: Internet Services Unit Communications and Information Technology Commission: Saudi E-Government: Saudi Internet Portal: