Term Paper: Wireless Web Is Truly

Pages: 20 (5074 words)  ·  Bibliography Sources: 1+  ·  Level: College Senior  ·  Topic: Business  ·  Buy This Paper

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[. . .] Customers, while they are willing to gain instant access to online information and commerce, are not willing to trade their safety, or security of their financial data for the convenience. While the m-commerce system is evolving in hardware technology, shaping customer culture and expectations, and moving toward truly global delivery systems, the security of individual transactions are perhaps the most important aspect of the evolution.

Security Elements and Protocols

Smart Cards.

E-commerce and emerging technologies of m-commerce are motivating the financial services industry to explore smart cards as a portable means of authenticating online identities. At the same time, smart cards are being used to provide value-added services to cardholders, says Carl Stefannelli, vice-president, global e-business, MasterCard International.

Recent studies indicate growing consumer interest in using smart cards for e-commerce. By using a card with confidential data encoded in the on board chip, soon consumers perceive a higher level of security in their transactions. But, countering this to some extent, the major reason given by consumers for not shopping online is their concern about using payment cards and entering their information online. While a recent study of consumers said that a majority of consumers believe that a cashless society is coming at some point in the future, more relevant to the smart card payment industry is "the fact that 86% thought the tool that most improved their financial performance was the debit/check card. Another significant feature is that 350m units of the 1790m smart cards sold by Schlumberger went to the banking and retail sector. Given these figures and the fact that fraud in internet credit card transactions is higher than in traditional commerce, it is no surprise that the smart card industry is burgeoning." (Bansal, 2001)

The acceptance of smart cards has been dependent on the development of global standards for reader applications, security and operating system compatibility. With a consistent set of specifications for payment cards now being adhered to and multi-application operating systems becoming available, the smart card is open to a much larger market. Industry leaders predict that payment cards with standard-compliant chips will be an important differentiator for financial institutions to win over and retain clients. The deployment of international industry standards has ensured that cards, readers and software can work together securely.

Resistance to smart cards has come mainly from retailers, who cite such issues as infrastructural upgrade costs, implementation costs and fears that the smart card will increase the transaction processing time, as authentication and data transfer would require the card to be connected to the server for longer. Many of the nation's larger retailers invested a high amount in developing their own proprietary POS and authentication systems. Although points of sale (POS) terminals with a high functionality that connect to a central database are being developed, most retailers have their own custom POS systems. This means upgrading costs are high and incentive to change is low.

Today's intelligent smart cards have a larger storage capacity and are capable of handling multiple applications simultaneously. Unlike the simple smart card, commonly used as pre-paid, disposable telephone cards, the new "smarter" cards can store and secure information. They offer read/write capability and more advanced versions may also incorporate a special processing circuit for cryptographic digital signature to validate information. Intelligent smart cards are capable of making independent computations needed to increase security and perform application functions. The microprocessor chip card has proven to be more secure than the simple magnetic strip, as the intelligence is now embedded within the integrated circuit chip rather than in a central database. The IC chip protects the information being stored from theft and damage. This improved capability makes it an ideal choice for mobile and online payments.

Another driver for the smart trend is that chip technology makes it possible for banks to integrate their products across traditional POS and ATM channels, as well as emerging e-business channels such as the internet and m-commerce. The smart card greatly decreases the capital costs currently incurred for maintaining loyalty records and sending out vouchers. (Bansal, 2001)

Wireless Application Protocol (WAP)

At the heart of successful wireless delivery is a set of unified application codes which all subscribers, service providers, banking institutions and merchants can use in order to create a universal and seamless experience. Users must be able to use their wireless devices universally in order to continue to drive the high demand toward m-commerce. WAP, making its appearance in 2000, was highly touted as the universal savior as devices sought an unfettered and universal device communication channel.

The idea behind WAP was to develop wireless Internet solutions that were open, non-proprietary to devices or delivery systems, and fully interoperable.

True WAP technologies did not depend on a single mobile device or network operator. They worked seamlessly across independent wireless networks and allowed applications to scale easily across multiple transport options and mobile devices. The multiple steps which are included in the m-commerce communication channel are the very issue which created the difficulty of developing a universal WAP standard. The WAP 1.0 standard integrated terminal-resident and network services to telephony, communications applications, information services and operator services. The initial WAP architecture was able to constitute the standard software to hardware dock with the World Wide Web.

In order to be effective and universal, WAP dealt with two levels of interoperability: device-to-device compatibility and application-level issues. At the device to device, or gateway level, manufacturers now focused their attention toward working to ensure interoperability among their handsets and network terminals. Work also was done at the application level to ensure that various devices, which may render content in dramatically differing ways, all operated smoothly and seamlessly.

By creating a single, open standard, WAP also decreased the barriers and risk to market entry for new equipment manufacturers. Open interoperability encouraged the development of WAP-enabled wireless content, including news, entertainment, financial updates and other time sensitive applications which will likely drive the m-commerce evolution. Therefore WAP interoperability had to allow carriers to offer customized services to narrow market segments, to build brand loyalty and to reduce subscriber churn. (Hamed, 2000)

In 1999, Forrester Research predicted that wireless application protocol (WAP), the standard at the time for reformatting web content for display on mobile devices, would be in use on seven million mobile phones by the end of 2000. Enthusiastic projections concluded that more than 20 million customers would be using WAP enabled devices by 2003. These projections suggested that roughly half the adult population should be shopping, banking, chatting, and surfing on its mobile phones by the end of next year. (Darling, 2001)

However, these fell hopelessly short of actual users. WAP compatible phones which entered the marketplace in 2000 were not well received by consumers. Reports from Nokia, T-Mobile, and the mobile arm of Deutsche Telekom reported that less than one per cent of its subscribers used WAP enabled services and devices with the average user accessing the service just once or twice per-month. (Darling, 2001) The initial setback centered on the consumers desire to continue to purchase inexpensive phones which are simple to operate. However, even though the initial WAP setback hit the market hard, WAP 2.0 has recreated the enthusiasm for manufacturers and service providers.

The entry of Wireless Application Protocol version 2 (WAP 2.0) plays an important role in enabling the mobile operators to continue to advance toward fully integrated m-commerce. The WAP 2.0 standard includes support for mobile multimedia messaging services (MMS), expansion of the capabilities of wireless devices, and support for features and functions to improve the user experience. WAP 2.0 is an evolutionary step and allows application developers to create compelling mobile content using the same tools and techniques they're already familiar with for other Internet applications.

The functions and features in WAP 2.0, which are enhanced, have moved the industry toward better navigation, configuration and adaptation, and security. Navigation Is Enhanced with WAP 2.0 by allowing for rich and interactive content which can be sent to subscribers in a messaging context. Configuration and adaptation is also enhanced with WAP 2.0 by using the MMS standard to sets out interfaces for servers transcoding content, and companies are already preparing products to ease multi-device support. Most importantly, security is enhanced with WAP 2.0 By addressing specific security lapses which were present in WAP 1.0; WAP 2.0 creates a straightforward end-to-end security for content providers. This is made possible without requiring customized infrastructure at the enterprise because WAP 2.0 built into the protocol the concept of secure proxy tunnels which are identical to Internet proxy tunneling.

Thus the advances in WAP establish transaction integrity at its core. The WAP 2.0 builds the network's value, and attracts new services. Secure payments place the mobile operator in the center of every mobile transaction and can result in increased revenue opportunity. The end-to-end security supported in WAP 2.0 together with enhancements made to the Wireless Identity Module (WIM) specifications make it possible for secure transaction services such as brokerage,… [END OF PREVIEW]

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