Mellon Bank Corp. and the U.S. Treasury Department have plans for a Secure Electronic Transactions test that will let some of each organization's employees buy savings bonds or Army surplus goods over the Internet.

The pilot, which will test the MasterCard- and Visa-supported on-line security protocol, is slated to begin in a few weeks.

Initially focused on selling goods through the World Wide Web sites of the Bureau of Public Debt and the Defense Reutilization and Marketing Services agency, the program is likely to be expanded.

"The government has more than a dozen agencies that are very interested in providing their products or services over the Internet," said Tom Butler, manager of product development at Pittsburgh-based Mellon.

"Until now, the government has been stymied from offering these services," he said. "But with the security that surrounds SET, they are much more comfortable."

Treasury officials are optimistic about the pilot.

"We believe SET will be an important technology in making it easier for citizens and businesses to transact with the government," said Gary Grippo, program manager for electronic money at Treasury's Financial Management Service.

For Mellon, the pilot is part of an effort to carve a niche as a provider of corporate electronic commerce services.

Mellon executives noted the bank will use both its merchant-acquiring and card-issuing business lines in the pilot.

"This pilot is an important step in offering Mellon customers convenience and security for a rapidly expanding consumer demand for Internet purchases," said David L. Johns, manager of Mellon Network Services.

Mr. Butler added, "We very much want to support the U.S. government, which is an extremely important customer of ours."

Technology companies involved in the SET trial include GTE Cybertrust Solutions Inc. and Concentric Network Corp.

Concentric, based in Cupertino, Calif., is bundling International Business Machines Corp.'s net.payment SET-compliant wallet with its own software.

Susan Monroe, spokeswoman for Concentric, said her company "is providing a virtual private network to Mellon" over which Treasury instruments can be purchased. "Concentric is providing the backbone for the system," she said.

GTE Cybertrust, Needham, Mass., will provide digital certificates that MasterCard holders can use as identification during transactions.

"Digital certificates are one of the staples of SET," said James W. Blase, vice president of operations for GTE's digital certificate arm. "They are absolutely needed to make it work."

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