Seeking to turn an obscure payment protocol into a real business, Visa and MasterCard today kicked off a campaign to convince consumers that they can soon make credit card purchases safely over the Internet.
Today's event was intended to boost interest in the Secure Electronic Transactions (SET) protocol, which the two card companies have been developing jointly since January 1996.
Visa and MasterCard also unveiled a simple SET logo, which it will trademark globally and allow Internet merchants and software vendors to display after they receive SET certification. The consumer-oriented mark is designed to boost buyer confidence in making Internet purchases.
"Two-thirds of consumers are still waiting for a trusted brand solution to come into the marketplace," said Steve Mott, senior vice president of Internet commerce at MasterCard. "They are mostly waiting for trusted financial institutions to do that."
Analysts said the announcement helps to bolster SET as a security standard. "This is not a baby step and it's not a giant leap," said Clay Rider, analyst with Zona Research. "It's somewhere in between. It shows the beginnings of a SET foundation."
The biggest news of the day came from Atalla, which said it has won U.S. government approval to export its SET processor, a chip designed specifically to handle SET's heavy cryptographic processing requirements. The chip from Atalla, a unit of Tandem Computers, is called PayMaster Internet Security Processor.
A Visa official predicted that SET transactions would begin by the end of this year, but said widespread use is not expected until 1998.
Small SET pilots have been announced in 25 nations around the world. At least ten have conducted real transactions to date.
In the first SET trial by a brand other than Visa or MasterCard, Air Travel Card announced it will complete a SET pilot in early 1998. Air Travel Card is a business travel payment system involving more than 200 air carriers worldwide. Four airlines will participate: American, Lufthansa, Swissair, and United.
The real boost will come if Visa and MasterCard charge less for handling SET transactions. Theoretically SET should reduce card fraud. Both Visa and MasterCard declined to say today how soon that might happen. MasterCard's Mott even suggested that in some nations banks might charge more for SET transactions because they're safer.
In other vendor news from the event:
--Payment firm VeriFone and certificate authorityVeriSign demonstrated U.S. consumers using SET transactions to buy goods from merchants in Singapore and Spain. Bank of America handled the U.S. end of transactions with Sistema 4B in Spain and Network for Electronic Transfers (NETS) in Singapore.
--E-commerce software vendor Maithean announced that version 2.0 of its NetPay Payment System would support the first version of SET. Maithean, which also announced a Japanese version of its payment software, is working to integrate its SET payment system with Litronic's smart card systems.