MasterCard International and Visa International have formally published the first version of the Secure Electronic Transactions protocol for card payments on the Internet.
The open industry standard, known as SET, was published on schedule May 31 on both card associations' Web sites. On Monday, American Express Co. conducted the first transaction using SET 1.0, when an undisclosed card member purchased a drill press from Wal-Mart's Web site.
"The publication of the protocol is very important," said Andrew Bartels, vice president of encrypted payments at American Express. "It finally completes the blueprint the industry needs to create software and other support infrastructure needed to make SET a reality in the marketplace."
Consumers who buy goods on the Internet have had to send their credit card numbers unencrypted or through a security protocol called Secure Sockets Layer. Unlike SSL, the SET protocol assigns digital certificates to consumers as well as merchants so they can identify one another.
"The consumer will be verified to the merchant, the merchant will be verified to the consumer, and the whole transaction will be wrapped with cryptography," said Leslie Wollin, a vice president at Chase Manhattan Corp.
SET will "really position electronic commerce to take off," Ms. Wollin predicted. "It adds an element of security and confidence."
In a pilot, Chase is equipping a few cardholders with software so they can buy items on-line from Wal-Mart, the first SET-enabled merchant. Chase plans to distribute wallet software more broadly by late summer, advertising its availability in inserts to card members.
"Ultimately, every Chase consumer will have a Chase digital certificate that they use for their electronic shopping," Ms. Wollin said.
