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SET

The SET standard has been developed to protect payment instructions in transit. A discussion of SET is outside the scope of this document, and we recommend that anyone interested in this subject download the SET business description document from (e.g.) the Visa site (http://www.visa.com).

SET is expected to become operational in 1998. However progress is slow. For SET to provide the ultimate level of security it will be necessary for each cardholder to be issued a 'digital certificate' by their credit card issuer. This presents significant logistical problems, and is unlikely to be rolled out in less than 3-4 years. There are a number of unresolved issues here which deserve a paper of their own!

Online Authorisation

Payment Gateways

You may need authorisation to be made on-line:

• Because you are delivering the product immediately over the Internet.
• Because you want to bypass the manual effort of keying the information into your bank terminal.
• Because you want to protect yourself from fraud. Much credit card fraud happens at the merchant. If the credit card information is handled by the computer, the chance of in-house fraud is reduced.

Generally speaking, connecting your computer directly to the bank is a very expensive option. You can however go through a number of payment gateway services. There is a list of services on the Textor Webmasters Ltd Web site.

These services interface with your Web application in some way to create the link to the bank.

If you are using shopping cart software then it has to be interfaced to the gateway. For example we have interfaced our primary product (Shopsite) to a leading gateway service (DataCash). This is never going to be a straightforward thing to do and it is important that when signing up to a gateway service you are sure that they can interface to the software you need.

form-based Services

If you are using a simple order form with no shopping cart then the form can possibly be handled by the gateway operation, eliminating the need for a secure server.

Commerce Service Providers

The most complex type of service is called a Commerce Service Provider (CSP). A CSP offers a complete shopping cart and back-office environment which can be used by a catalogue running on their or another server. The CSP uses complex 'industry strength' software - of which the market leader is Transact, produced by Open Market.

The unique feature of Transact is that the product details can all be held on a catalogue Web site on a non-secure server. They do not have to be held in a product file on the secure server, but can just be built into the Web site. When the customer presses the order button, all the product details are passed to the shopping cart software at that time. What is more, they are passed in a fraud-resistant way guaranteed by security keys.

This has a number of important implications, and is one reason why Transact carries a six-figure price tag. One of these implications is that a company can offer Transact as a utility that can be tapped by merchants without requiring any sort of complex product file-maintenance operation. The merchant needs only a simple piece of software to create a security key against each product offering.

A further implication is that there is no real upper limit on the size of a catalogue, and because of the strong software involved there are no real transaction volume limits.

There are about four Transact-based CSPs in the UK today. Because of the significant investment required these are all major organisations.

Shopsite, offered by Textor Webmasters Ltd, is an Open Market product and an interface between Shopsite and Transact is promised. This gives merchants who purchase Shopsite a good expected upgrade path to Transact if the volume of business warrants or if they feel that a major support organisation is required.

Planning

Planning is an important part of this type of business, as it is with any business venture. We suggest three main stages to the process:

1. Business Requirements

   Make sure you understand the market, and that you understand the business processes that you need to implement. Select a project manager and ensure that project disciplines are in place. Produce a first-cut budget.

2. Technical Requirements

   Identify the technical requirements you will need to satisfy. Draw up short lists of products and services. Refine the budget.

3. Selection / Procurement

Finally, select the products and services you need to start the project.

It may seem obvious but it is important to procure products and services only after the business and technical investigations have been complete. Businesses that start by (for example) selecting a software product or a service provider before the business requirements are clear are in danger of not meeting those requirements.