Japan and China Do Not Yet Support SET

Secure Electronic Transaction (SET) was supposed to be the standard protocol that would jump-start electronic commerce over the Internet. However, the two major players in Asia -- Japan and China -- have set up noncompatible systems, although Japan is working to make its system, JSET, compatible with SET.

JSET evolved because credit-card commerce in Japan is regulated by the Ministry of International Trade and In dustry (MITI) rather than by the Ministry of Finance. In addition, a different security algorithm is used in Japan for credit-card commerce than for interbanking commerce.

The current situation in China also points out the need for an open, international standard. At present there is no interbanking standard in China at all. As a result, a Bank of China customer in Beijing cannot use his or her ATM card at a Bank of China branch in Shanghai, much less at another bank's ATM.

As far as electronic commerce is concerned, the so-called Golden Card project in Shanghai has been going on for five years. This is a joint venture between the Pu Dong Development Bank and Bull of France, with currently about 350,000 CP8 transaction cards in circulation.

The system uses proprietary Pu Dong interbank settlement software, which is incompatible with SET. According to Bob Hepple at Visa International, "We are currently negotiating with several banks in China to introduce an S ET/EMV system in China. Our and MasterCard's plan is that this system should be internationally universal, not proprietary."