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MasterCard Modifies SET Policy for Online Transactions

MasterCard International announced today a modification to its presentment process for merchants aimed at promoting the use of the Secure Electronic Transaction (SET) protocol.

Taking effect April 1, 1998, the policy change provides an extra level of security during the verification process. The change aims to reduce the number of claims in which customers report they did not order the goods or services being charged to their accounts.

For example, during a SET-enabled transaction, a customer's credit card information will be transmitted to the merchant accompanied by an assigned digital certificate that authenticates the account information is valid prior to the vendor charging the customer's account for goods or services purchased.

The digital certificate provides the online vendor with proof that the customer has presented accurate credit card data and that the transaction is valid, thus arming the vendor with additional proof if a customer refutes the charge.

"This rule change offers the best balance of protection against credit card abuse for consumers, merchants, and member financial institutions in the Internet marketplace," said Steve Mott, MasterCard International's senior vice president of Electronic Commerce/New Ventures.

"We fully anticipate that chargebacks for merchants in the emerging electronic commerce market will decrease as a result of the rule change and the broader adoption of SET," said Mott. "MasterCard members that have adopted SET have requested this rule change to ensure that their electronic commerce businesses can be developed in a robust, end-to-end acceptance environment."