Secure Electronic Transactions Protocol

The Secure Electronic Transactions (SET) protocol mimics the current structure of the credit card processing system and replaces every phone call or transaction slip of paper with an electronic version. This can involve a surprisingly large number of data packets because the credit card system evolved to allow a wide range of transactions. Restaurants, for instance, frequently submit the bill twice. The first time processes the bas ic bill, and the second time adds on the tip. Hotels, on the other hand, often reserve a large block of extra credit to account for extra charges like room service. This is released when the client checks out.

The SET protocol offers packets of data for all these transactions, and each transaction is signed with a digital signature. This makes SET the largest consumer of certificates, and it makes banks by default one of the major distributors of certificates. IBM, GTE, and VeriSign have announced plans to help banks offer certificates to their customers; this promises to be a big market for developers of these large databases.

One of the most active debates in the SET community is about who will pay for the SET certificate-revocation list. The SET protocol forces a transaction processor to check the lists regularly to catch transactions that might be generated by a lost or stolen certificate. In order to simplify the process of keeping the lists current and sync hronized, the protocol defines a fingerprint to be a hash of the latest revocation list. The transaction processors can compare fingerprints to ensure that their copy of the list matches the latest master list.

The credit card issuers will probably become the ones that are responsible for maintaining these lists of revoked certificates. The structure of the marketplace virtually assures this. But this may mean that the SET certificates will not become easily useful for other uses of encryption, like sending private letters, because the card companies may see the certificates as their own property. Or they may decide to open up this feature as a gimmick to draw customers. Only the marketplace will tell.

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How Secure Electronic Transactions (SET) Works

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