Atalla, a subsidiary of Tandem Computers Inc., is using the SET protocol in a new hardware-based encryption system for safeguarding credit card transactions.

SET, or Secure Electronic Transactions, is an Internet payments specification adopted this year by MasterCard International and Visa International.

Atalla, a leader in security systems for electronic banking networks, joined a growing list of suppliers with products conforming to SET.

Atalla's PayMaster ISP (the letters stand for Internet security processor) handles the complex computations of data encryption keys, assuring a high level of security without burdening server computers, Atalla said. It said the system also prevents a merchant from viewing information meant only for a bank, and vice versa.

Atalla also introduced SignMaster ISP for certificate authority and digital signature applications.

Software-based cryptographic approaches are more risky than hardware and tend to degrade central processor performance, Atalla said.

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