What are SET and how it works

Related Topics:| E-biz Advice | E-commerce |

What are secure electronic transaction (SET)?

Secure Electronic Transaction (SET) is the technical standard for secure commerce across the Internet. Visa and MasterCard developed SET, in cooperation with such high-tech companies as Microsoft, IBM, Netscape, Verisign, GTE and others. Using advanced cryptographic technology, SET can:

· provide confidential transmissions,

· authenticate all the parties involved in a transaction (e.g., cardholder, financial institution and merchant),

· ensure the integrity of payment information.

The advantage of SET over former Internet security protocols is primarily in the integrated use of digital certificates, issued by a trusted certification authority. These digital certificates are used to electronically authenticate each of the parties involved in a transaction through cyberspace.

It is also important to note that the credit card number of the customer is only seen in an unencrypted form by the financial institution authorizing the transaction.

The SET specification provides consumers and businesses with the security and encouragement to increase the amount of electronic commerce on the Internet.

SET works by using a unique public key and private key combination to create what is known as a digital signature, which can be used to verify that the sender and receiver are each who they claim to be.

At the sending stage, data is encrypted by a randomly generated symmetric (private) encryption key. The key itself is then encrypted by the recipient's public key. This encrypted key is also known as the digital envelope.

When the digital envelope is received, it is decrypted with the recipient's private key. The recipient may now proceed to use the sender's randomly generated key to unlock the original message.

I want help FreeAdvice

Please contact Alvin For Advertising & Sponsorship Information

FINMART FreeAdvice® is the leading business advisory site for business people doing business in Malaysia. It provides advice relating to most common business problems and to help business people to understand the way how business should be properly conducted, but is not a substitute for personal business advice from the respective professional and experts. You are welcome to view FINMART FreeAdvice® for your own personal, non-commercial purposes, and subject to our legal disclaimer and conditions of use.