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September 8, 1997

SECE Study Group Formulates Protocol For Banking Transactions

- Safe, secure payments environment supports banking practices in Japan -

A common platform for electronic commerce (EC) is being jointly developed by Fujitsu Limited, Hitachi, Ltd., and NEC Corporation, who in 1996 set up working groups to receive input from financial institutions as part of studies conducted with the aim of implementing and standardizing protocols for banking transactions and credit card payments.

The Banking Transaction Protocol is the result of studies conducted since the start of this year by a banking working group,which includes representatives from the 11 major banks, and encompasses secure environments for immediate (debit) payments from bank accounts to settle shopping purchases, confirmation of balance of funds in a bank account, and transfer of funds by consumers over the Internet, while taking into account Japanese banking practices and using SET (Secure Electronic Transaction) technologies.

With respect to the SECE credit card payment protocol, in the course of SET standardization activities, the study group has been working to ensure that the results of its studies are reflected in the SET V1 specification and the support for Japanese requirements.

"The harmonization of international standards such as SET and local requirements has been realized under the joint efforts of leading financial institutions and vendors in Japan." said Naoyuki Akikusa, Executive Vice President of Fujitsu. "It is widely acknowledged that there is great potential for commerce with the qualified secure payment systems on the Internet. I am therefore pleased with the remarkable results of SECE Study Group for banking, credit card and other industries. This contribution to more advanced online services will also bring greater success to these global businesses."

"The protocol will be the cornerstone of an upcoming social infrastructure, the secure global electronic commerce system in Japan. We are excited to be involved in the activity of formulating the protocol that takes Japanese banking and credit card payment practices into account, and are keen to contribute further to the settling of the protocol and make it a global standard," said Shigemichi Matsuka, senior executive managing director of Hitachi, adding "Hitachi will offer various EC products and services based on SECE."

Mr. Eiichi Yoshikawa, the Senior Vice President of NEC Corporation said, "I am very pleased that the SECE project has developed its payment protocol specification including requirements of Japanese customers and financial institutions. I believe that the achievements will foster accelerating electronic commerce in Japan. NEC intends to contribute to promoting electronic commerce globally by providing products and services for payment solutions based on the achievements of the SECE project."

Founded in 1935, Fujitsu Limited is an international leader in information technology, telecommunications, semiconductors and other electronic devices. The Fujitsu Group of over 400 technology, software and service companies posted global revenues of more than US$ 36 billion in the fiscal year ended March 31, 1997.

Hitachi, Ltd., headquartered in Tokyo, Japan, is one of the world's leading global electronics companies, with fiscal 1996 (ending March 31, 1997) consolidated sales of 8,5 billion yen. The company manufactures and markets a wide range of products, including computers, semiconductors, consumer products and power and industrial equipment.

NEC Corp., founded in 1899, is headquartered in Tokyo, Japan, and had net sales of 4.9 trillion yen (US 39.9 billion dollars) in the 1996-97 fiscal year. NEC manufactures and markets a broad range of products, including computer systems, communications systems, which extends from switching systems to cellular phones, and electronic devices, which extends from microprocessors to memory chips.

Main features and functions of the Banking Transaction Protocol Version 1.0

1. Features

• Uses SET based encryption and protocol
• Provides security of information related to payments and settlements
• Ensures integrity of transmitted data
• Transactions using electronic certificates
• Provides electronic authentication of customers, merchants and banks
• Introduction of Internet PIN (Personal Identification Number)
• Incorporation of Japanese banking transaction practices

2. SECE Banking Transaction Protocol Functions
The SECE Banking Transaction Protocol comprises the following two functions.

1. ATM transaction functions
The ATM transaction covers the following functions.

• Balance inquiry
• Transaction inquiry
• Funds transfer

2. Payment transaction by deposit account
Protocols will cover procedures between customer clients, merchant servers and bank servers for transferring money from accounts to pay for purchases.
A customer requests that a merchant be paid for a purchase by transfer of the requisite amount from the customer's account to the merchant's account. The retailer then confirms with the bank that the transfer of money can take place, and the transfer is implemented.

Background:

1. SECE Overview

SECE Protocol

• Payment protocols
  Credit card payments
  ATM transactions
  Payment transaction by deposit account
  
• Certificate management protocol:

• Payments/settlement library
• Certificate Library
• Security Library

Aims
To study problems and the technology needed to make EC a reality, conduct activities to increase understanding of SECE and develop individual systems as part of an overall effort to help establish a safe, secure environment for EC.

Details of activities
1. Studying SECE credit card payment functions
2. Studying SECE bank transaction functions

Credit Card Working Group (Launched November 1996)
American Express International, Inc.
Credit Saison Co., Ltd.
DC Card Co., Ltd.
The Diners Club of Japan, Inc.
JCB Co., Ltd.
Million Card Service Co., Ltd.
Nippon Shinpan Co., Ltd.
Orient Corp.
The Sumitomo Credit Service Co., Ltd.
UC Card Co., Ltd.
VISA INTERNATIONAL (Observer)
MasterCard International (Observer)

Banking Working Group (Launched January 1997)
The Asahi Bank, Ltd.
The Dai-Ichi Kangyo Bank, Ltd.
The Daiwa Bank, Ltd.
The Fuji Bank, Ltd.
The Hokkaido Takushoku Bank, Ltd.
The Sakura Bank, Ltd.
The Sanwa Bank, Ltd.
The Sumitomo Bank, Ltd.
The Tokai Bank Ltd.
The Bank of Tokyo-Mitsubishi, Ltd.
The Bank of Yokohama, Ltd.

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