Banks Adopt ‘Wait and See' Policy on SET

New Zealand banks are holding off on implementing the secure electronic transaction (SET) protocol for online financial transfers, despite the backing of such industry heavyweights as Microsoft Corp., Netscape Communications Corp. and the majority of hardware vendors.

Computerworld reported on an impending trial of SET by Visa with a couple of banks in June 1997, but that trial has yet to materialize.

"We've missed the deadline on that one," admited Mark Cullimore, Visa's director of electronic banking for the Asia-Pacific.

None of New Zealand's banks are trialing SET, although a number of larger institutions are watching their Australian parent companies' trials.

"We are SET-enabled. When SET is finalized and readily available, we'll be able to slot it in," said ASB Bank's CIO, Gary Fissenden. Representatives of ANZ, BNZ and WestpacTrust said their banks are in similar "wait and see" positions.

The rest of the world isn't much further on. Neither Visa or MasterCard, the protocol's two main proponents, have a single merchant listed on their Web sites currently using SET. A large number of institutions, banks and merchants, are engaged in trials but none of them appear ready to take the next step and launch SET as a full-time standard.

Merchant backing will be the key to any successful roll-out of SET -- but interest is lacking, partly due to the cost and difficulty of implementation. Ease of use for users is also high on the list of potential road blocks. Users download a "virtual wallet" that adds payment functionality to their browser. They also have to register with a third party financial institution which will issue them with a digital certificate, identifying the card holder.

Another issue which could well dog SET's development is that of interoperability. With a number of vendors producing hardware as well as software using SET, there is the potential for conflicting versions of the protocol.

But despite the problems few banks would say that SET was dead. Most believe SET will emerge as the industry standard for e-commerce in the next few years, albeit at a slower rate than Visa and MasterCard first proposed in 1996.

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