Exercise 12.1: Designing for a secure framework

Question 1.
Find out about SET and the use of RSA 128-bit encryption for e-commerce.

SET stands for Secure Electronic Transaction. It is a secure system used for sending credit card transactions over the Internet. It uses an electronic wallet on the client computer with a private and public key being created. When a credit card purchase is made the credit card details are encrytped using the private key and sent to the merchant who then attaches a digital certificate to the details and then sends the transaction to the bank whereby the transaction is finalised. This means that the merchant doesn't have the credit card details of the purchaser and the bank doesn't know what the customer purchased thus making the transaction more secure and private than in other technologies. The standard was originally supported by Visa and Mastercard, however it didn't take off for the following reasons:

• The need to install client software (eg the e-wallet).

• The cost and complexity for merchants to offer support and the comparatively low cost and simplicity of the existing SSL based alternative.
  
  
• Client-side certificate distribution logistics.

RSA is an algorithm used for public key encryption. The algorithm was invented in 1978 by Ron Rivest, Adi Shamir, and Leonard Adleman with the letters RSA being the initials of their surnames. It is the first algorithm known to be suitable for digital signatures as well as encryption. Current versions of RSA use a 128-bit encryption algorithm, which is computationally infeasible to decode without the key.

References
RSA (n.d.). Retrieved on July 7, 2009, from http://en.wikipedia.org/wiki/RSA
Secure Electronic Transaction (n.d.). Retrieved on July 7, 2009, from http://searchfinancialsecurity.techtarget.com/sDefinition/0,,sid185_gci214194,00.html
Secure Electronic Transaction (n.d.). Retrieved on July 7, 2009, from http://en.wikipedia.org/wiki/Secure_electronic_transfer