A Comprehensive Guide on The Uses of Secure Electronic Transaction Protocol

The Secure Electronic Transaction (SET) Protocol is a standard for ensuring secured online credit card transactions. Developed by Visa and MasterCard in the 1990s, it aims to provide a safe method for e-commerce transactions, ensuring the confidentiality and integrity of data exchange between the parties. In this weblog, we will explain the uses of the secure electronic protocol. Moreover, the purpose of the secure electronic protocol, its key participants, and how it works is also explained here.

Explain What is Secure Electronic Transaction Protocol?

The Secure Electronic Transaction (SET) protocol is a machine that helps secure fee card transactions over open networks, including the Internet. The SET's number one target is to:

1. Ensure the confidentiality of the payment records.
2. Authenticate all the parties involved in the transaction.
3. Maintain the integrity of the transmitted statistics.
4. Ensure the non-recognition of transactions, which means events cannot deny their involvement.

Key Participants in the Secure Electronic Transaction Protocol

There are many participants in the secure electronic transaction protocol. A list of them can be found below:

1. Cardholder: The consumer making the purchase online.
2. Merchant: The business or individual selling goods or services online.
3. Issuer: The financial institution that issued the cardholder's credit card.
4. Acquirer: The financial institution that processes credit card transactions for the merchant.
5. Payment Gateway: An elite service provider that transfers payment information between the merchant and the acquirer.
6. Certificate Authority (CA): An entity that issues digital certificates to validate the parties' identities in this transaction.

Secure Electronic Transaction Protocol with a Labelled Diagram

The secure electronic transaction protocol diagram can be found below:

Explanation of Secure Electronic Transaction Protocol Diagram

The secure electronic transaction protocol diagram involves multiple steps to ensure the transaction's security. This simple yet fundamental diagram shows the flow of transactions or money from the customer to the merchant securely. In order to understand better, read a detailed explanation given below:

a. Initialisation

Before any transaction, all participants must obtain digital certification from the certificate authority. These certificates validate the participants' identities and are essential for encrypting and decrypting the information.

a. Purchase Request

The cardholder selects the goods or services they wish to purchase from the merchant's website and proceeds to the checkout. Then, they provide their payment information, typically a credit card number encrypted with the merchant's public key.

c. Order Information Encryption

1. The payment information provided by the card order is split into two parts.
2. The order information contains the details of the purchase.
3. The payment information includes the cardholder's payment details. It is encrypted separately using the payment gateways publicly.

d. Merchants Role

The account receives the encrypted PI and OI. Due to the punch's encryption, the merchant cannot review the cardholder's payment information. I message digest an encrypted summary for the PI and OI, ensuring data integrity.

e. Dual Signature

The cardholder creates a dual signature in the cryptography process that links the PI and OI while keeping them confidential. This ensures that the payment information cannot be altered without detection.

f. Payment Authorisation

The merchant sends the encrypted PI, OI, and dual signature to the payment gateway. The payment gateway decrypts the PI using its private key and forwards the payment information to the acquirer.

g. Transaction Processing

Dark wire processes the payment information, with the issuer confirming the bunch's availability. The issuer then authorised or declined the transaction and responded to the acquirer.

h. Response to the Merchant

The acquirer communicates the transaction results to the payment gateway, informing the merchant.

i. Confirmation to the Cardholder

The merchant sends a transaction confirmation to the cardholder, completing the purchase process.

Future of Secure Electronic Transaction Protocol

The secure electronic transaction protocol is evolving with technological advancements. As online transactions continue to grow, vulnerabilities are evolving. These are increasing the threat among customers, making the digitisation of payment difficult. Therefore, to secure the payment process and assure the security of payments customers make, new protocols and enhancements to existing ones are being developed to address emerging threats and improve efficiency.

a. Blockchain Technology

Blockchain technology offers a decentralised and transparent approach to secure transactions. While everything blockchain transactions can be recorded in an immutable Ledger, reducing the risk of fraud and enhancing trust among the participants.

b. Quantum Cryptography

Quantum cryptography promises to revolutionise data security by using the principles of quantum mechanics. This technology can provide unreachable encryption, ensuring electronic transactions remain secure even against quantum computing threats.

Alternatives to Secure Electronic Transaction Protocol

While the secure electronic transaction protocol laid the groundwork for secure online transactions, several alternatives offer different security approaches.

a. 3D Secure

3D Secure is an authentication protocol designed to increase the security of online card transactions. It adds a layer of verification by requiring cardholders to enter a password or unique code sent to their mobile device.

b. Tokenization

Tokenisation replaces sensitive payment information with unique tokens that cannot be used outside the specific transaction context. This reduces the risk of data breaches and unauthorised access.

Integration with Mobile Payment Systems

The integration of the secure electronic transaction (SET) protocol with mobile payment systems has become increasingly important as smartphone use for online purchases grows.

a. Mobile Wallets

Mobile wallets like Apple Pay, Google Wallet, and Samsung Pay leverage secure elements and tokenisation to ensure transaction security. Incorporating SET principles into these systems enhances their security frameworks, providing additional protection for users.

b. Contactless Payments

Contactless payment methods, including Near Field Communication (NFC) and QR code-based transactions, benefit from SET's encryption and authentication mechanisms, ensuring secure and efficient mobile transactions.

Advantages of the Secure Electronic Transaction Protocol

The several advantages of secure electronic transaction protocol are mentioned below:

a. Enhanced Security

The secure electronic transaction protocol ensures that sensitive data is protected from unauthorised access by encrypting payment information and using digital certificates.

b. Data integrity

Using digital signatures and message digest ensures that the data cannot be altered without detecting or maintaining the integrity of the transaction.

c. Authentication

Digital certificate authenticates the identities of all the participants, reducing the risk of fraud.

d. Non-repudiation

The dual signature ensures that all parties involved cannot deny their participation, providing a transparent audit trial.

Limitation of Secure Electronic Transaction Protocol

Despite its robot security features, the secure electronic transaction protocol has some limitations.

a. Complexity

Implementing secure electronic transaction protocolrequires significant technological infrastructure and expertise.

b. Cost

Obtaining digital certificates and setting up encryption can be expensive for merchants and consumers.

c. Adoption

Due to complexity and cost, people do not widely adopt secure electronic transaction protocols. Many merchants and financial institutions opted for simpler, albeit less secure, methods.

FAQs

a. Who is taking participants in the SET protocol?

The key participants are the cardholder, merchant, issuer, acquirer, payment gateway, and certification authority.

b. How does the SET protocol ensure transaction security?

It uses encryption, digital certificates, device signatures, and message digest to 2 protect transaction data and organic participants.

c. What are the benefits of using a set protocol?

SET protocol provides enhanced security, data integrity, organisation and non-repudiation for online transactions.