Secure electronic Transactions (SET) Protocol

Secure Electronic Transaction or SET is a system which ensures security and integrity of electronic transactions done using credit cards in a scenario. SET is not some system that enables payment but it is a security protocol applied on those payments. It uses different encryption and hashing techniques to secure payments over internet done through credit cards. SET protocol was supported in development by major organizations like Visa, Mastercard, Microsoft which provided its Secure Transaction Technology (STT) and NetScape which provided technology of Secure Socket Layer (SSL).

SET protocol restricts revealing of credit card details to merchants thus keeping hackers and thieves at bay. SET protocol includes Certification Authorities for making use of standard Digital Certificates like X.509 Certificate.

Before discussing SET further, let’s see a general scenario of electronic transaction, which includes client, payment gateway, client financial institution, merchant and merchant financial institution.

Requirements in SET:

SET protocol has some requirements to meet, some of the important requirements are:

• It has to provide mutual authentication i.e., customer (or cardholder) authentication by confirming if the customer is intended user or not and merchant authentication.
• It has to keep the PI (Payment Information) and OI (Order Information) confidential by appropriate encryptions.
• It has to be resistive against message modifications i.e., no changes should be allowed in the content being transmitted.
• SET also needs to provide interoperability and make use of best security mechanisms.

Participants in SET:

In the general scenario of online transaction, SET includes similar participants:

1. Cardholder: customer
2. Issuer: customer financial institution
3. Merchant
4. Acquirer: Merchant financial
5. Certificate authority: Authority which follows certain standards and issues certificates (like X.509V3) to all other participants.

SET functionalities:

• Provide Authentication
  • Merchant Authentication: To prevent theft, SET allows customers to check previous relationships between merchant and financial institution. Standard X.509V3 certificates are used for this verification.
  • Customer / Cardholder Authentication: SET checks if use of credit card is done by an authorized user or not using X.509V3 certificates.
• Provide Message Confidentiality: Confidentiality refers to preventing unintended people from reading the message being transferred. SET implements confidentiality by using encryption techniques. Traditionally DES is used for encryption purpose.
• Provide Message Integrity: SET doesn’t allow message modification with the help of signatures. Messages are protected against unauthorized modification using RSA digital signatures with SHA-1 and some using HMAC with SHA-1,