Abstract

Online payments in business-to-consumer electronic commerce are mainly made with credit cards. Fraud and chargebacks are a significant issue for merchants and payment card brands, due to widespread use of unsecured or partially secured credit card transactions. The Secure Electronic Transaction (SET) protocol may not only provide a high security level. It also enables productivity improvements and therefore the reduction of transaction costs in payment processes. In the paper, the costs and benefits of SET are evaluated. The results show that security and efficiency are not sufficient to guarantee the market penetration of SET. Additional incentives for merchants and even more important for cardholders are necessary in order to gain market share.

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