SET

From CryptoDox, The Online Encyclopedia on Cryptography and Information Security

Secure Electronic Transaction (SET) is a standard protocol for securing credit card transactions over insecure networks, specifically, the Internet. SET was developed by VISA and MasterCard (involving other companies such as GTE, IBM, Microsoft and Netscape) starting in 1996.

SET is based on X.509 certificates with several extensions. SET uses a blinding algorithm that, in effect, lets merchants substitute a certificate for a user's credit-card number. This allows traders to credit funds from clients' credit cards without the need of the credit card numbers.

SET makes use of cryptographic techniques such as digital certificates and public key cryptography to allow parties to identify themselves to each other and exchange information securely.

SET was heavily publicised in the late 1990's as the credit card approved standard, but failed to win market share. Reasons for this include:

• Network effect - need to install client software (an eWallet).
• Cost and complexity for merchants to offer support and comparatively low cost and simplicity of the existing, adequate SSL based alternative.
• Client-side certificate distribution logistics.

SET was said to become the de facto standard of payment method on the Internet between the merchants,the buyers, and the credit-card companies.When SET is used, the merchant itself never has to know the credit-card numbers being sent from the buyer, which provide a benefit for e-commerce.

Secure Electronic Transaction (SET) is an open encryption and security specification designed to protect credit card transactions on the Internet. The current version, SETv1, emerged from a call for security standards by MasterCard and Visa in February 1996. A wide range of companies were involved in developing the initial specification, including IBM, Microsoft, Netscape, RSA Security, Terisa, and Verisign. Since 1996 there have been numerous tests of the concept; by 1998, the first wave of SET-compliant products was available.

SET is not itself a payment system. Rather, it's a set of security protocols and formats enabling users to employ the existing credit card payment infrastructure on an open network, such as the Internet, in a secure fashion.