Secure Payments Online

Demand for Payment

This post is part of a series of posts entitled A Legal Guide to the Internet. For a comprehensive list of articles contained in this series, click here.

In addition to the issue of enforceability of the license agreement, the vendor should also consider how payments will be made for the software product. As businesses continue to jump on the Internet bandwagon, there has been more concern in developing a secure and reliable method of payment. A fundamental issue with making on-line transactions secure is that information transmitted over the Internet can be intercepted and copied. Fraudulent use of such numbers or passwords continues to be a concern. Some of the current approaches to secure payment include the use of

  1. third party confirmation such as credit cards
  2. electronic money or smart cards
  3. digital cash

A more direct method of secure payments online is through the use of encryption and a secure server with Secure Socket Layer protection. This allows for authentication of customers, confidentiality of price information, and delivery of trade secret software. Unfortunately, U.S. export controls remain somewhat restrictive with respect to file encryption features and even the use of encryption has not been immune from hackers. Netscape has already seen its encryption key discovered by graduate students at the University of California at Berkeley. For more discussion of electronic payment or encryption see the Commercial Transactions post, Electronic Payment Systems And Security Online And Digital Signatures.

This and the following posts have been copied or adopted from A Legal Guide To The INTERNET – Sixth Edition, published through a collaborative effort by the Minnesota Department of Employment & Economic Development and Merchant & Gould.