Transaction Authorisation and its uses

Written by Bella Aviva

Transaction Authorisation is one of the core concerns today. As many of the transactions and dealings have started to take place online, the need to have an authorization system for transactions has risen drastically. Many websites and software have been developed to address this issue. Websites like have developed various interesting features in this regard.

So how are transactions authorized? This is especially a concern when the transaction takes place over the internet where you can’t see the party involved in the transaction? How can you make sure that all is well?

When having physical contact with the dealer, it is easy to verify transactions as everything is direct. However, this is not possible over the net. That is why alternative methods of verification have come into practice.

Secure Electronic Transaction (SET)

Secure Electronic Transactions (SET) have been developed by companies in order to ensure the security of financial transactions over the web. This system unanimously supports Mastercard, Visa, Microsoft, Netscape, and other major transaction dealers.

SET works by issuing digital certificates to the parties involved in any deal to ensure security and authority. A certificate and key is issued to each party which then verifies the other certificate without revealing any confidential information. Once verification is done, the transaction takes place securely.


The key features of SET’s are

1- Authentication of cardholder

2- Authentication of merchant or dealer

3- Security of information

4- Confidentiality of information

These features are what make SET a great security system for online transactions.

How it began

The story of Secure Electronic Transactions began with the emergence of online dealings and banking transactions. Since there was an urgent need for creating a secure transaction system, the SET was backed by all the major electronic providers like MasterCard, Visa, Microsoft amongst others.

SET’s allowed verification of credentials without actually viewing them. This secured the customer by transferring the details to the banking company instead. The banking company provided the necessary verification while keeping all information secure.

How it works

In order to create a secure transfer of funds, digital certificates are issued which give electronic access to funds. On the occasion of a purchase,  encrypted versions of these certificates enable the completion of a transaction. Digital certificates are allocated to the participants of a transaction along with digital keys. As a result, the certificates are confirmed and the transaction progress smoothly.

Since the verification is performed without the revelation of the buyer’s details, SET’s prove to be a great way to conduct transactions securely.

The need for SET

SET’s were developed due to rise in online business and banking along with an increase in online shopping. This increase called for secure transactions by everyone, whether it was business, bank, individual or online retailers.

Today, SET is not the only digital security for transactions. Many others were developed too like S-D Secure. Websites like also offer secure and verified transactions. However, SET was the pioneer in making transactions secure.