The New Dimension of the Internet - Term Paper Example

 Abstract Internet fraud has become very common in the modern age. E-commerce is mostly the focal point of fraudulent activities therefore companies invest a lot in deploying appropriate security measures. Geo-location is one of the technologies that is adapted by many companies to provide their merchants and thus the customers a secure environment to pursue business transactions. It has some advantages and disadvantages which shall also be discussed. Introduction ‘Internet’ is termed as one of the most revolutionary inventions of the 21st century [15]. It has proved to be a multi-purpose invention that serves the needs of communication for some and acts as a source for information for the others [1]. Another dimension that has been encapsulated as a part of the internet now, is the world of e-commerce. ECD [16] states that the concept of shopping online has become a norm for humans. Muir [42] explains that e-commerce basically involves the concept of online business transactions that usually involve payment by credit cards. Overview This new dimension of the internet has provided many opportunities for the customers and merchants. At the same time, created problems for the merchants as not all customers are genuine and honest. Russell [17] conducted a study and concluded that Americans have their identity stolen almost every minute and spend an average of 600 hours to recover from the effects of this crime. According to a research by US Federal Trade Commission [2] in 2001; it was concluded that around 1000 complaints were lodged for online fraudulent activities, whereas this number increased to a huge number of 25000 by the year 2000. Patton et al [3] and Connolly et al [5] state that these kinds of figures have created an environment of mistrust between the merchants and the customers. Qi et al [4] writes that the main aim of the online shopping companies is to ensure that the customer is honest about his identity and minimize the manual work in terms of the decisions for the authenticity of the identity. Olsen [18] studied that companies tend to spend a good amount to maintain a secure environment for their online business. Altendorf [19] has analyzed that much development has been done in this field to make e-commerce transactions safe from any fraudulent activities. One of the technologies that is gaining a name in this regard is ‘Geo-location’. System Background Jain et al [6] terms credit cards as having a ubiquitous nature. Credit card processing is very vulnerable as it involves many entities, there might be many places where fraudulent activities can be suspected. Montague [7] studied and concluded that merchants make lesser profit through a credit card payment than by cash but they have to enable this mode of payment to get more customers and thus more business online. Waxer [41] explains that with the advent of e-commerce, everything is virtual- from choosing the products to the mode of payment. Therefore the identity and authentication of the payment holds great deal of concern for the merchant. Montague [7] further explains that there are up to seven entities in the online transaction process. There are of course merchants and customers at each end, and then there are issuing banks, payment processors, gateway services, card associations in the intermediary steps. Fig.1 [7] When the transaction is initiated, the merchant sends the information of the consumer’s card to the acquiring bank to inquire if the customer has enough money on his card to continue with the purchase. Bucki [8] states that there are two ways of contacting the acquiring bank; the merchant can either use a gateway service or payment processor. Caswell [13] studied the process that the acquiring bank then routes the request via the card association network to the issuing bank to get information about the availability of cash on the respective card. The issuing bank does the needful actions and reserves an amount of money for the transaction. The reply is sent back to the merchant through the whole network to inform him about their findings. Metzger [39] states that along with these checks several other security mechanisms are deployed to ensure safety in credit card payments. Fig.2 [7] Problem Identification With the advancement of computer technology, cyber attackers have also become more technology savvy. Walia [9] included a report in her paper by Celent Communication [10], it stated that US alone faces a big amount of USD 3.2 billion to online credit card fraud till the year 2007. According to another study conducted by Unisys [11], an information technology company, it was concluded that Americans fear the credit card fraud even more than the fear of Fig.3: Yearly comparison of complaints received via the IC3 website: IC3 2005 Internet Crime Report. [36] terrorism and health viruses. According to another survey by Unisys, an information technology company [11]; it was found that credit card fraud is considered to be the No.1 fear for Americans, superseding the fears of terrorism and health viruses. Internet fraud (FBI) [34] direct the merchants that they need to ensure the validity of the card, if it is stolen or genuine and if it is one of the cards networks associated to them etc. Solution Laurie [12] explains that one of the technological solutions that has been preferred by many online companies is helpful in finding the physical location of the internet user to the extent that it has even been beneficial in the area of e-commerce. This technology is known as ‘Geo-location’. Richmond [40] defines ‘Geolocation’ as the process which automatically identifies the physical location of the web user without any extra effort of providing information like zip code or state etc. Yunker [14] states that this technology has become so popular that it now works for all web browsers. It is already used by numerous popular websites of the world. Nishat [21] and Cacavias et al [46] describes it in more technical terms that it is the geographical mapping of the nodes in the internet that are based on IP addresses to each node in the internet infrastructure. Daintry [35] explains that Geo-location technologies are used for different purposes by different companies and people. Svantesson [20] and Digital Communication [22] state that it is used for online fraud detection, identity authentication, to target content to a specific audience, block content from a certain audience and to impose certain taxes on a specific region etc. It is widely used for business purposes; where the customer’s location will be detected to judge if their respective transaction information is valid or not. Then it is being widely used to control the internet traffic. Advantages of Geolocation 1. Targeted Advertising on Websites: Quova [24] states that the trend of modern advertising is that online consumers may be handled differently on the basis of their locations. The companies can cater different products and thus advertise for them to consumers of different regions. An example is given by Gueye et al [23]; in a region where the statistics show there are mostly married people living there, the company can successfully run their diapers and infant milk products campaign to increase their sales. Marketing strategies can be exclusively established for that region. 2. Restricted Content Delivery Just like companies can choose places to advertise their products, they can refrain from some advertisements from some places; E-commerce Taxation [43] and Svantesson [37] add that regional rules and regulations can also be handled with this technology. Quova [25] gives an example that companies would not want to advertise alcoholic beverages in Saudi Arabia since it is against the law in that region. 3. Specific Location-based business Quova [26] states that if a business is restricted to a certain region only; then the request coming from elsewhere can be identified and thus denied. 4. Fraud Detection Quova [26] also states that during an online business transaction, the customer provides his personal and credit card information. This information can be matched with the information from geolocation to judge if there is no discrepancy or contradiction. Disadvantages of Geo-location 1. Contradicts with the global concept Jacobus [45] explains that there are many advantages of geolocation but some schools of thought do not agree with it since they are of the opinion that it contradicts with the global concept of the World Wide Web. TechBiz IT [44] states that World Wide Web offers information which should be available to all humans and not dependant on the location they currently in. 2. Not an Independent Decision Tool. Monatgue [7] concluded from his analysis that geolocation has proved to be a useful tool in the area of fraud detection, but it cannot be relied on as the only decision making element in the process of accepting an order. 3. Problem in Making Geolocation data Svantesson [20] explains that the main problem is experienced during the process of building up the geo-location relevant data for e.g.; There are no address registers containing physical addresses with respect to IP addresses. Working of Geolocation Tabibova [33] states that the technology of geolocation is based on translating IP addresses into geographical locations by the aid of information stored by the company providing the geolocation service. Ziviani et al [28] and IP [29] also termed it ‘IP geo-location’, as it looks up for the unique IP address possessed by every host connected to the internet. As stated by Leeuwen [27]; there are currently 4.25 billion possible addresses that can be reserved or given to a host and out of these possibilities only 1.3-1.6 billion approximately have been occupied as yet. Freedman et al [30] states that deducing the location of a host by an IP address was a challenging job as there exists no direct relationship between the IP address and the geographical locations. Chappell [31] explains that the web-user selects the desired products and enters his information in the browser at his end. Just when he enters this request, an access request is sent to the server where the website is being operated. EduCause [32] explains that when the server receives this request, it sends a location request (along with the IP address of the access seeker) to the provider of the geo-location service. A database is maintained about the IP addresses and their information, at the end of the provider of the geolocation service. The information corresponding to the IP address in the database is sent back to the website server as an educated guess is sent about the location of the web-user. According to the location of the web-user, appropriate content will be displayed on his screen. The figure below shows the process of the access request; Fig.4 [20] Montague [7] categorized the received information as; 1. Geographic information that might include the country, time zone of that place, city or even postal code. 2. Proxy Information 3. Network information that might include domain name, network connection type and speed that the user is using. Usage of the Results of Geolocation EduCause [32] explains that when the merchant uses this information from the geolocation, he can feel more confident about the authenticity of the customer and thus send out the desired products confidently. He can match the geolocation information with the shipping and billing information entered by the customer in the process of the transaction. Montague [7] explains that the information about the city and country can help the merchant to decide if he wants to pursue his business in that specific region. After this information, he can avoid the regions where he has had bad experiences in the past and does not want to do anymore business in that region. The information about the proxies can be helpful in the following manner; the merchant can develop a mechanism to screen those orders more for any fraudulent activities in which anonymous proxies and cache proxies are found. Further Reading The expected impacts of the geolocation technology on the web-users in general, will be analyzed in more detail and their support for the concept. Svantesson [38] states that it shall be analyzed as to how geolocation affects the law and what is the consequence of some countries not supporting this technology. The diversity of the information possible with geolocation technology shall be studied. Conclusion Geolocation has proved to benefit the merchants in their online businesses and the customers in building their trust in the online companies. The degree of geolocation can be reduced by the usage of geolocation technologies and thus loss of the respective companies. References [1] G. R. Newman, R. V. Clarke, Superhighway robbery: Preventing E-commerce Crime, Willan Publishing, USA, 2003 http://books.google.com.sa/books?id=YSL_oq2AB10C&printsec=frontcover&dq=fraud+prevention+techniques+for+credit+card+fraud+2004&source=gbs_similarbooks_s&cad=1#v=onepage&q=&f=false [2] US FTC, “Boom in E-Commerce Has Created Fertile Ground for Fraud”, US Federal Trade Commission, 2001, http://www.ftc.gov/opa/2001/05/iftestimony.htm. [3] M. A. Patton, A. Jøsang, “Technologies for Trust in Electronic Commerce”, Electronic Commerce Research, 4: 9–21, 2004. [4] Y. Qi, H. 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