Visa courts banks for e-commerce ‘rehearsal’

Visa expects to have a Secure Electronic Transfer (SET) electronic commerce trial running in New Zealand by the end of this year. The availability of version 1.0 of the SET standard was announced worldwide this month.

Visa expects to have a Secure Electronic Transfer (SET) electronic commerce trial running in New Zealand by the end of this year.

The availability of version 1.0 of the SET standard was announced worldwide this month. SET is a technical specification for securing payment-card transactions over open networks such as the Internet. It was developed by Visa and MasterCard, with participation from several technology companies.

Visa’s director of electronic banking in the Asia-Pacific region, Mark Culli-more, says the aim locally is to put the infrastructure in place to allow secure payment on the Internet in New Zealand.

He says there are two banks in New Zealand who are particularly interested in SET, but he cannot name them yet. The banks have been waiting for the technology to “settle down” before making any moves.

“What we’ve done elsewhere in Asia is really test the standard itself, to get a good understanding of what’s required to implement it from a support perspective, for getting merchants and customers enabled.

“We’ve learned a lot already. What we’re looking at with New Zealand banks, rather than doing a test of the standard or pilot again, is a pre-launch, getting ready to launch it rather than a test.”

That would involve working the banks to put in a certification authority service and the payment gateway, and helping them to get their merchants and customers up and running.

Cullimore says the first approach will be likely to involve a limited number of people — probably about 50 cardholders and two or three merchants.

SET could start in New Zealand with one bank, or with many banks.

“It depends on the banks themselves, who wants to do it. If banks don’t do it in New Zealand, what will happen is you’ll get banks from other countries coming in and taking their customers, both merchants and consumers.”

Two things had to be put in place to support SET — a certification authority to issue digital certificates and a payment gateway to process the transactions between the merchants and the banks.

He says Citibank in Singapore is running a SET trial. The payment gateway solution, which connects Citibank to the Internet and is located in Singapore, was developed by IBM.

Cullimore says Citibank is able to use the payment gateway anywhere in the world to acquire merchants.

“If Citibank had a licence in New Zealand to acquire merchants they could do it without any further technology building.

“It’s the same with anyone else in the world. They would have to follow the banking laws of New Zealand, but essentially, once they’ve built the Internet technology it allows them to work anywhere in New Zealand.”

The same would apply to New Zealand banks wanting to acquire merchants overseas.

He says that in Asia there has been pressure on banks from merchants.

“The message coming from Asia to the banks is ‘hurry up, I want to sell my goods securely on the Internet’. Maybe that’s not happening in New Zealand.”

He says cardholders are also putting pressure on the banks.

“They’re saying ‘I want to start buying on the Internet’ or ‘I’m already buying and I’m putting you at risk, what are you going to do about it?’ ”

He says that with people using their cards on the Internet already, if banks didn’t do anything, then there would continue to be risk associated with it.

Visa is also planning a trial in Australia later this year.

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