E-Payments &
Saudi Arabian
e
-Infrastructure
072
MIS 300 - Fundamentals of E-Commerce
Mr. Mustafa Faisal Ahmed [email protected]
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)
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 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
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
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 coins
Can serve as a substitute for
government-issued physical currency
Attractive in two arenas
Sale of goods and services of less than $10
Sale of higher-priced goods and services to
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
Electronic Cash
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
Phishing – A very serious threat to E-
Commerce
Basic structure
Attacker sends e-mail 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
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
Saudi Arabian E-Commerce
Scenario
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
SWOT Analysis of Saudi Arabian E-Commerce
Market
Strengths Weaknesses
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
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
Opportunities Threats
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
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
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.
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 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.
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
Important ‘Saudi Arabian’ Links
Saudi Network Information Center (SaudiNIC):
www.nic.net.sa
CERT-SA:
www.cert.gov.sa
Internet Services Unit
www.isu.net.sa
Communications and Information Technology
Commission:
www.citc.gov.sa
