Electronic money challenges and solutions Essay

Electronic money challenges and solutions - Essay Example As Bill Gate, the founder of Microsoft puts it: E-payment or electronic payment is a technique of making transactions over the internet or some other electronic system. The transaction takes place in the form of secure data transfer from one end to the other. The greatest advantage of an e-payment based transaction is the speed with which the transaction gets completed. Other benefits include the ease with which the transaction can be completed; the users do not have to be physically present to make these transactions and in fact, both buyers and sellers can meet in the electronic market to make electronic transactions using electronic money. There are various forms of e-payment systems that are in use nowadays. These include credit cards, debit cards, online transfers, wire transfers, e-money like Pay Pal, and other modes through which people make payments over the web. Most of these systems are based on a ID and password system to protect against unauthorized usage. With an increase in the magnitude of online applications and systems, there is a growing threat of security issues, vulnerabilities and exposure on the use of electronic transmission, and internet based systems. This has been a concern for companies, individuals, government and law enforcement agencies. Doing transactions online means making payments for the goods and services that are purchased; this leads to a need for developing a mechanism to make these 'e-payments'. This further translates into developing and implementing a security process to ensure that these transactions are carried out keeping the confidentiality, integrity and availability of the systems intact. An e-transaction is as susceptible to fraud as any other transaction, if not more. The fraudsters are many in the electronic world, are dispersed all round the globe, have update knowledge and expertise about the systems and computers, and are attacking to gain access to, and in many cases, to use the identity, fun ds and communication of a person in illegal, unethical and undesired way. 2.1 Security Issues for E-Money and E-Payment Systems Security of electronic money refers to establishing the confidentiality, integrity and availability of information when it is passed through the electronic system. Some security requirements for an electronic money transfer system are outlined below (British Standards, 2006, p.3): Confidentiality - ensuring that information is accessible only to those authorized to have access to it. Integrity - safeguarding the accuracy and completeness of information and processing methods Availability - ensuring that authorized users have access to information and associates assets when required Authenticity - information should be available to sender and recipient, who must prove their identities to each other Non-repudiation - assurance/ proof that the transmitted message was indeed received (ECD, 2007). 3. Key Challenges and Recommendations for Electronic Payment Systems A description of specific risks and challenges of online transactions is provided below. 3.1 Privacy and