MoSET (for merchant-only SET) lets consumers use Secure Sockets Layer (SSL) security, widely deployed in most Web browsers today, to pay with a credit card while merchants and banks use the slow-starting Secure Electronic Transactions protocol to interact with each other.
That approach--and IBM is not alone in pursuing it--gets around the so-far-difficult problem of distributing special SET "wallets" to credit card users, while moving merchants and payment processors to SET. SET was created by Visa, MasterCard, and their technology partners as a bank-led effort for a secure method to handle online card payments.
"We are still committed to SET, but this is a transitional approach," said Mark Greene, IBM vice president for Internet payments. In that same spirit, IBM recently agreed to use SSL payment technology from the ICVerify unit of CyberCash.
Separately, IBM's consumer division is expected to announce next week that its Web hosting service will soon allow individuals and small businesses to get quickly into e-commerce transactions.
Greene calls Big Blue's payment strategy a "multipayment framework," which like a real-world wallet can contain different ways to pay. That strategy started with SET merchant software and the ability to accept "cartridges" for other payment types.
Cartridges are being created for electronic checks and smart cards, with e-cash stored on them. But IBM remains cautious on electronic cash--it's testing e-cash in Europe and talking to players like DigiCash, but isn't convinced yet that there's a market for digital cash. If there is, it could be added as a payment cartridge.
Greene, who spoke at a Smart Card Forum in San Francisco this week, thinks smart cards hold promise in several areas, including storing digital certificates, data for frequent-user loyalty programs, and physical security for laptop PCs.
"Laptop manufacturers in the next six months will introduce machines that require a smart card to boot up," the IBM executive predicted, protecting both the machine itself and the sensitive data stored on it.
Greene said IBM is porting is electronic check software so that it can work on a handheld personal digital appliance, part of a new IBM division's push to integrate software for devices such as smart cards, Internet TVs, and consumer digital appliances such as Internet phones. But IBM has not committed yet to market those hardware devices itself.