Transcript for 5. Banking and buying - the rise and rise of e-commerce and related security issues

I can’t imagine not being able to buy things over the Internet or check my bank account online, so I was keen to find out about how this became so popular.

As the Internet grew, businesses realised that they could attract more customers by making themselves available online and in 1991 the Internet opened for commercial use.

Because the Internet was still pretty new, lots of people were nervous about using it for anything involving money. Special technology was developed to make it safer for people to use the Internet for what we now call ‘e-commerce’.

Systems involving ‘cryptography’ (often referred to as ‘encryption’) were developed which meant money could be transferred between buyers and sellers without any credit card details being revealed.

The idea of computer encryption was proposed many years before the Internet and e-commerce became widespread. Back in 1964, Paul Baran – one of the Internet’s pioneers – said it was important for encryption to be built into large communication systems, to make sure that messages remained private.

Put very simply, encryption meant that messages could be sent from one person’s computer to another’s without being read by anyone else. Using encryption keys, a message could be ‘encoded’ or ‘locked’ by the sender, before being ‘decoded’ or ‘unlocked’ by the recipient.

As well as ensuring private communication over the Internet, encryption became a vital tool in safeguarding against online fraud. In 1994, the Secure Sockets Layer protocol (SSL) was introduced that made transactions using this kind of encryption even more secure. As would-be shoppers grew more confident that their credit card details wouldn’t get into the wrong hands, the amount of stuff bought and sold over the Internet increased massively.

Amazon was one of the first major companies to sell things over the Internet and was founded in 1995. It started life as an online bookshop, but went on to sell all kinds of stuff.

During the 1990s, banks began to realise that they could reduce their costs by offering services to their customers over the Internet. The ‘Security First Network Bank’ in the United States was launched on 18 October 1995 and claimed to be the world’s first, fully functional, virtual bank.

Since then, lots of ‘online banking’ services have been set up all over the world with tight security measures to keep their customers’ money safe.

Banks now actively warn customers about the ways Internet criminals might try to get access to their money. One of these techniques is called ‘phishing’ (that’s phishing with a ‘ph’ rather than ‘f’) and involves a ‘phisher’ sending bogus messages to people – often pretending to be from a bank or online shop.

Phishing is usually done through email or instant messaging. It’s used to gather important personal information, like bank account details or credit card numbers, which the phisher can then use to steal from their victims’ accounts.

A phishing message will usually tell the reader to click on a link, which takes them to a fake version of a real bank or company’s website. Once on the fake website, the victim is asked to enter their details. Then, when the person’s details have been given – BINGO! – the phisher has got just what they need...

Widespread publicity in newspapers, on the TV news and on the Internet has made people very aware of the problem of ‘identity theft’, phishing and credit card fraud. Technology to fight Internet crime is being developed all the time, so as long as people are sensible about the kind of websites they use and don’t fall into the traps laid by would-be Internet criminals, shopping and banking online should be just as safe as handling money in the real world.