The Federal government is jumping on the SET bandwagon even before many private sector companies have organized or announced plans to test the Internet transaction protocol. And while major credit card companies are all in various stages of testing the system that relies on credit cards equipped with digital certificates that encrypt information in transit, only a few banks have even signed on. Leading the way, the Treasury Department's Financial Management Services bureau, with Mellon Bank, launched a SET pilot that could eventually include the more than 175 agencies that conduct transactions on the government's Plastic Card Collection Network (PCCN). "We've had demand really for about two years now from a lot of agencies to be able to accept transactions over the Internet," says Gary Grippo, electronic money program manager at the Treasury's financial management services division.

The pilot program has enabled 50 Mellon and government employees to make purchases from the federal agencies that sell surplus military equipment and savings bonds. Grippo says it shouldn't be surprising that the federal government is getting in on this game early. "Down the road, people who transact with the government are going to have SET wallets, so we have to accommodate them."

Mellon Bank and NationsBank are presently the two acquiring banks that service federal agencies that use credit and debit cards to conduct transactions over the PCCNoeverything from paying duty at Customs inspection stations to buying coin sets from the Mint. That contract, responsible for $360 million in transactions in 1996, is currently being re-bid, Grippo said, and the most technologically savvy applicants will win the new contract. Besides SET capability, the government lists stored value, smart cards, disposable ATM cards and other emerging technologies as possible future components of the PCCN. FB

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