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CHAPTER 7/NEWLY DEVELOPED TELECOMMUNICATION SERVICES 77
merchant. When the customer is verified as a customer in good standing with the
credit card companies and can pay for the purchase, the company sends the mer-
chant a message that the purchase is allowable. If the customer is found not to be
a customer in good standing, the company sends the merchant a message that the
purchase is not authorized. This procedure enables the company to see only the
payment information but not the purchase order.

7.9.3 Encryption

Encryption is highly important for protecting information from all kinds of attacks
while information is being transmitted over the network, such as illegal access by
hackers, wiretaps, or dishonest users. Encryption is the only practical way to trans-
mit information securely. Encryption scrambles the information so it cannot be
read by anyone who lacks the key. Encryption and decryption are done by means
of a key and a key algorithm. By means of the key and the key algorithm, a source
scrambles information before transmitting the scrambled data over the network. At
the destination, the data is unscrambled with a key to produce the original data.
There are two types of encryption and decryption methods: symmetric key
encryption and asymmetric (public) key encryption. Typical encryption and de-cry-
ption are described next.

7.9.3.1 Symmetric Key Encryption Algorithm
With symmetric key encryption, the source text is encrypted by means of a sym-
metric key and the scrambled text sent to its destination over the Internet. The
scrambled text is decrypted into the original text by means of the same key. To
accomplish this, the key and the encryption and decryption algorithms have to be
shared between the source and its destination. Until recently, this was the widely
used method of encryption. With symmetric key encryption, the source and the des-
tination share a common key. The common key is secret, but the algorithm that en-
crypts and decrypts is not.

• Data Encryption Standard (DBS): Data Encryption Standard (DES), one of
the usual symmetric key encryption methods, is a modification of the best of the
symmetric key methods proposed by the National Institute of Standards and
Technology (NIST). Its symmetric key is 56 bits long. When text is encrypted, it
is broken into components, each 64 bits long. Every component is scrambled by
means of the symmetric key, after which all of the scrambled text is sent to its des-
tination over the Internet. At the destination, the scrambled text is decrypted by
means of the same key to produce the original text.
• Improved Data Encryption Algorithm (IDEA): The improved data encryp-
tion algorithm (IDEA) was invented by James Massey and Xuejia Lai of
Switzerland in the 1990s. It is said to be faster and more resistant to hacker attack
than DES. However, it has not yet been proved better than DES.