There is the usual fraud opportunities at both client and server side (fake customer or fake store) and these are already present in non Internet version
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Security can reduce level of fraud and make this a viable business model
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There is the possibility that merchant is attracting customers to site so that it can download applets and other Internet chicanery which can do bad things -- at least invade privacy
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There is the possibility that credit card number is snooped and this is directly countered using encrypted transmission
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Note we do not need a perfect system and commerce today builds in a certain fraction of loss due to fraud, bankruptcy etc.
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