B2Cs growth and a new look at e-security

A reason why B2C e-commerce has not taken off as opposed to its potential is the lack of trust consumers have on the security aspect of online payment mechanisms. A consumer feels information can be misused. Also, merchants and banks are hesitating to take a plunge because remittances owing to refusal of orders by consumers are uncertain.

Two other reasons for stunted growth of e-commerce are: meager PC penetration and the lack of internet-literacy.

A possible solution is to use intermediaries, who can overcome these limitations by providing their own infrastructure to facilitate booking orders over other access media like the telephone and doing intelligent comparisons/searches, thus placing orders on the e-merchants. But the payment information has to pass through these intermediaries, which is again an intimidating prospect of misusing information.

Let’s analyze statistics to pinpoint the deficiencies in the e-commerce set-up and propose a workable alternative.

• 63% of web surfers will not purchase over the internet until they are assured of more human interaction (lack of personal touch) (Source: Forrester Group)

If the order is placed through "familiar" intermediaries who can act as proxy buyer (help desk) or through a "personal" interaction (by telephone) and the buyer has the last say in approving the order, it will bring in a great deal of reassurance for the buyer.

• 2/3 of all online shopping carts are abandoned before checkout (waste of time due to a poorly designed site, leap of faith!). (Source: Forrester group). This is because when it comes to finally disclosing the card details, most people balk.

If there is a system wherein the buyer just tells what he needs to buy and let a proxy buyer do the searching/analysis/comparisons, the buyer will save a lot of time.

Then, if the buyer is assured that he is, at no point of time, exposing his credit card details to the proxy buyer, he feels safe.

• There were approximately 3.8 million credit cards in India till last year, according to a report. If my son does not have a credit card, he cannot do Internet-based shopping or benefit from Net-based services (e.g. booking a room in the hotel, which requires verification of creditworthiness). If he could use my credit card number, he would be able to do e-commerce and provide the much-needed impetus to e-commerce. But I need to be assured that he is not misusing my card.

If the new system ensures that the card is being used for the right purpose, by alerting me every time some payment is requested from the card, and authorizing me to say yes or no to the transaction, I will have no problem giving my credit card to my son.

• 85% of online households have only one phone line, hence can’t call and be on the site at the same time (lack of infrastructure).

Can we bring-down /remove the time spent on the site and therefore cut down the total transaction time?

• Most items sold on the Net are books, software, music, stationary, which have discreet identification attributes and make no difference if someone else buys the item on behalf of the customer.

The sales in these categories can be subjected to easy surrogate buying!

• Credit card is also required as an age proof (entry into spam sites!). Since spam sites store this information in their servers, and allocate you a username and password (for entry and for billing you for the use of content); there are common instances of the username and password getting hacked. Someone would be using your username and password to surf the site and you get billed!

Even if the site gets hacked, whenever a request for payment is made, the owner of the credit card must be intimated and requested to own the responsibility for the transaction.

We can see presence of proxy buying can help e-commerce take off. Also, the credit card owner needs assurance that his card is not getting misused.

But proxy buying in today’s context is fraught with dangers. Proxy buying today would mean parting with credit/debit card details, a major point of contention of consumers. This arises due to fear and risk involved in the misuse of credit card.

Adding a business level security layer in the mechanism and executing this security through a simple process of authentication, this can be avoided.

Concept

The first part is the virtual credit card number made available to the restricted entities (Order Help Desk and/or family members and friends) as identified by the credit card owner.

The other part is the d-PIN (Device PIN) known to and used only by the card owner for authorizing a transaction.

Setup

With the above setup, a credit/debit card owner will have two codes with his Bank -- a virtual credit card number and the d-PIN. Both can be changed/configured by the user at the bank site any time, without having to intimate all the participants in the payment system.

Process

The virtual credit card number is a mapping of the credit card number that will be shared by the user with Order HelpDesk/Family Members/Friends, referred to as proxy buyer.

Once the user shares this number with the proxy buyer, the latter can place an order on behalf of mPayee (Real Buyer) using his own resources. The proxy buyer searches the Net and finds the best merchandise meeting the mPayee’s needs.

For payment, he would enter the virtual credit card number to get the first level authorization from the bank. The bank compares the virtual card code supplied by the proxy buyer with the valid card code maintained by the user. Once the authorization is successful, the bank sends the details of the order to the user’s handheld device (the number of the handheld device is also maintained on the bank's database). The user ratifies it and confirms the order by keying in the d-PIN into his handheld device.