What is Secure Electronic Transaction (SET)
An open-source encryption and security protocol called Secure Electronic Transaction was created to safeguard online credit card transactions. Always keep in mind that a secure electronic transaction is not a payment system, but rather a collection of security protocols and formats that guarantees the safety of utilizing online payment systems.
SET stands for Secure Electronic Transaction. All parties engaged in the e-commerce transaction have access to a secure environment thanks to SET. Additionally, it ensures discretion. Through digital certificates, it offers authenticity. The fundamental idea of a secure electronic transaction and how it functions will be covered in this article.
How Do Secure Electronic Transactions Operate?
Following is how a secure electronic transaction operates:
Step 1: Customer opens an account
The consumer creates a credit card account with a bank, or issuer, that accepts electronic payments and the secure electronic transaction protocol, such as a master card or visa.
Step 2: Customer receives a certificate
A digital certificate is provided by CA once the customer's identity has been confirmed (this can be done using a passport, company documents, or other documents) (Certificate Authority). This certificate includes information about the consumer, including name, public key, expiration date, and certificate number.
Step 3: A certificate is given to the merchant.
The merchant must process a digital certificate for reliability in order to accept certain credit card brands.
Step 4: Customer places an order
Customers borrow an item from the available list, use a shopping cart to choose the right item based on their needs, and then place their order. When a consumer places an order, the merchant responds by sending the order's specifics, including a list of the things they chose, their number and price, the total cost, etc., so the customer may keep a record of the transaction at their location.
Step 5: Verifying the Merchant
To confirm that clients are doing business with a legitimate or approved merchant, the retailer will also provide them a digital certificate.
Step 6: The Order and Payment Information Are Sent
The customer provides the business their digital certificate along with information about their order and payment. The order portion is used to verify the transaction using the items listed on the order form as references.
The payment section includes information on the credit card (MasterCard or Visa). Even the merchant cannot decrypt the encrypted version of this payment information. The client certificate guarantees to the merchant the identification of a customer.
Step 7: The Merchant Requests Authorization for Payment
After receiving the customer's payment information, the merchant sends it to the payment gateway via the acquirer and asks the payment gateway to authorize the payment information. This procedure makes sure that the customer's credit card is legitimate and that the credit limit is not exceeded.
Step 8: The Payment Gateway Approves the Transaction
The payment gateway uses the customer's credit card information it has obtained from the merchant to cross-verify it with the issuer. It either approves or denies the payment based on the verification outcome.
Step 9: The merchant confirms the order
Merchants give the consumer an order confirmation once the payment gateway has approved the transaction.
Step 10: The merchant offers goods and services
Now, the retailer fulfils the customer's order for products and services.
Step 11: The business asks for payment
The payment gateway receives a request from the business. The payment gateway then communicates with a number of financial institutions, including the issuer, acquirer, and clearinghouse, to complete the transfer of funds from the customer's account to the merchant's account.
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