A recent Boston Consulting Group study provided some confirmation about what makes North American credit card customers different in their attitudes toward Internet security.

They are simply not as concerned as -- or have built up higher levels of confidence than -- consumers in regions where security and privacy have long been matters of utmost public-policy interest.

The study was sponsored by Visa International and focused on Latin America, where it projected a relatively meager $77 million of consumer on-line spending this year but as much as $3.8 billion by 2003.

The conclusion on security tends to reinforce Visa, MasterCard, and various technology companies in their continued attempt to sell the Secure Electronic Transaction protocol for Internet transactions.

In line with Internet activity as a whole, "progress in developing completely secure methods of payment varies across the region," Boston Consulting Group said in its assessment of Latin American electronic commerce, published last month.

It said the SET protocol has shown it can assuage security fears in various tests, though market coverage remains spotty and retailers want systems accessible to all shoppers.

At least SET is progressing in Latin America. Visa's president for Latin America and the Caribbean, Jonathan Sanchez-Jaimes, underscored the company's commitment to it and reeled off examples of trials and program launchings throughout the region.

"The BCG-Visa International study of on-line retailing in Latin America confirms our own research," Mr. Sanchez-Jaimes said at a press conference. "Latin American consumers are more concerned about security than their North American counterparts."

"Our consumers want a good shopping experience," he added, "and confidence is an integral part of that experience."

SET is virtually invisible in the card associations' home country, where neither consumers, merchants, nor bankers saw a crying need for it.

Critics also complained that the process of instituting the standard did not adjust quickly enough to the way electronic commerce was evolving.

Observers have attributed the greater receptivity to SET in Europe and Asia to cultural attitudes toward privacy and to those markets' familiarity with smart cards and their security characteristics. Smart cards have similarly fallen flatter in the United States, where market demand and business cases have been elusive.

Mr. Sanchez-Jaimes said the Latin American effort to help merchants "establish lasting consumer relationships by offering the best security available" begins by encrypting all personal and credit card information on the Internet to prevent theft of the data.

"Over time, however, encryption alone will not be enough," and that is where SET and its method of authenticating cardholder and merchant identities comes in.

The Visa executive said the promise of SET is in assuring even new shoppers on the World Wide Web -- people who have been reluctant to pay on-line -- that their credit card accounts are safe.

He acknowledged that "each country will develop at its own pace" and "the adoption of SET, like any standard, will take time."

Boston Consulting Group described Brazil as "out front" on SET, as it is in other aspects of e-commerce, "due to the strong leadership of the banking sector in establishing local pilot projects." It said the Brazilian bank Bradesco has incorporated SET into an electronic wallet system for consumers and is one of three banks participating in a Visa-sponsored virtual mall.

Mr. Sanchez-Jaimes said that in Mexico, Banorte, Banco Bilbao- Vizcaya, and Citibank have all begun SET programs; others are getting under way in Argentina, Peru, and Venezuela, he said.

In its report, Boston Consulting Group pointed to "strategic limitations" such as market coverage, costs, and customer confusion.

"Until SET is fully implemented across the region," the report said, "merchants run the risk that their secure servers, which contain information on customers' credit card numbers, can be broken into."

It added: "Merchants are eager for the ongoing support of credit card agencies and banks in the development of secure solutions and broader communication of best practices to build consumer confidence and encourage on-line spending."

"Visa is working to enable merchants in some countries to accept all encrypted transactions as well as to ensure the eventual migration of all key on-line players to SET," Mr. Sanchez-Jaimes said. "Visa will also continue to foster the development of new technologies, such as chip cards, which will ensure a safe and secure future for e-commerce, even when the consumer is traveling."

Boston Consulting Group said on-line retailing in Latin America is likely to grow rapidly in the near term but, except in the more technologically developed markets of Mexico and Brazil, "the real explosion is probably still a number of years away . . . . If access barriers do not fall quickly and payments barriers persist, e-commerce could evolve much more slowly."

Latin Americans have been highly receptive to buying from U.S. companies' Web sites with strong brands and guarantees.

The consultants warned that, unless the commercial and technological barriers fall quickly in Latin America, merchants in that region will find themselves at a competitive disadvantage versus North America.

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