Low SET activity raises doubts on standard

Australia's first commercial Website open for Secure Electronic Transaction (SET) business failed to attract more than five orders in its first two months.

The tiny transaction count may reinforce prevailing views that the SET payment protocol is the tortoise in the electronic commerce race.

But lack of activity at the site, operated by Taronga Park Zoo to sell souvenir items and animal sponsorships, is not really surprising.

In Australia, the only cards able to use the SET portion of the Website are in the hands of a small group of employees of ANZ Bank, the Big Four bank most involved with SET.

Championed by Visa International and MasterCard as the most secure technology for online credit card purchases, SET has been criticised for its cost and complexity. Merchants worldwide have been slow to sign up for it and a planned expansion of trial SET sites in Australia may be postponed.

A program that would have added several tens of new commercial SET-enabled Websites to Taronga Zoo's lonely presence is supposed to be launched in the last quarter this year.

However, concerns about the proximity of the Y2K changeover may delay the launch of the expanded pilot, according to Visa International manager for secure electronic commerce Michael Kearney.

"We are in the final stages of working out if it is worthwhile doing it before or after the millennium changeover," Kearney said.

At issue is whether participants in the project, especially the ANZ Bank, will have their attention and resources diverted by the approaching Y2K deadline.

Aside from ANZ, the other major Australian banks are locked into a holding pattern on SET.

"Westpac, National Australia Bank and Commonwealth Bank of Australia have the SET infrastructure established to a degree and have performed proof of concept trails," Kearney said. "Now they are all in a wait-and-see pattern."

When the new pilot does get off the ground, participating merchants will have their payments processed by Visa International's SET gateway in San Mateo, California.

However, Australian payments gateway provider Cam Tech is in the process of establishing a domestically located SET gateway, according to Kearney.

He questioned whether pundits were correct in proclaiming the cost of SET as a real barrier to its uptake.

"There is an upfront cost for any new technology but, in terms of costs to merchants in the long run, SET will come down to just another payment fee per transaction."

One important SET advantage is its ability to remove merchants from the liability loop for online fraud, according to e-commerce developer Creative Digital Technology (CDT).

A specialist in SET merchant software, CDT helped establish the Taronga Zoo Website and is working with Visa and the ANZ bank on the expanded pilot. Fraudulent credit card information sent using standard SSL Web security normally leaves merchants holding the bag, said CDT chief operating officer Philip Burton.

But with SET's digital certificate technology, "the cardholder becomes responsible for any repudiation", Burton said.

Figures have been floated which suggest that credit card activity on the internet generates 50 per cent of all credit card fraud even though it makes up only 2 per cent of total credit card transactions.

However, Kearney said he could not vouch for the authenticity of such figures although he has heard them being cited.

Taronga Zoo is running CDT's suite of SET-certified applications on a Data General Aviion server and Microsoft Windows NT software. By developing a SET infrastructure, the zoo is positioning itself to benefit from the tourist influx expected to accompany next year's Sydney Olympics, said IS manager Jenny Vasseleu.

Online sales of prepaid entry tickets, group booking and tours will be offered for both the Taronga Zoo and its sister site, the Western Plains Zoo in Dubbo.

The zoo has been an electronic commerce innovator among government agencies.

Besides being the first to offer SET applications last July, in 1998 it became the first NSW agency to accept electronic payments.

This year it has transacted about $10,000 worth of animal sponsorships and souvenir shop orders via its electronic site.

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