1996-008                                                          May 9, 1996

KDD has developed a security system for electronic commerce (EC), or commercial transactions between individuals and businesses over the Internet and other networks. EC has gained much attention in recent years.

The security system allows businesses and individuals to sell merchandise, offer pay information service, sign contracts, and give official approvals through the WWW (World Wide Web) using information security technique. WWW has become one of the most popular tools on the Internet due to its ease of controls and the wide variety of information it can handle. To use the system, customers insert an IC card with a CPU into their PC. The IC card and the host computer on the information provider side authenticate each other, and encrypt and exchange information between the parties. In addition, the system allows the parties to form digital signatures as proof of agreement between them in contractual applications.

This is the first security system in the world that uses an IC card for authentication, digital signature, etc., for realizing EC on the Internet WWW.

Electronic commerce is an electronic account settlement system for transactions between individuals and businesses connected via a network. It presents new business opportunities such as virtual shops on the Internet.

Many problems still remain, however, such as network security. National governments and private businesses have held research seminars and the like to study how to overcome such problems.

KDD developed the system as a solution to the problem of network security. KDD anticipates that the technology will be used by various businesses and organizations.

The system's features are:
(1)It supports all systems used in WWW on the Internet and intranet.
(2)Each customer receives an IC card with a CPU that safely stores confidential personal information. As all the processes take place inside this card, the system offers a high level of security. In addition, the card can be removed and used on other PC's for enhanced mobility.
(3)The system provides following functions,

• First, mutual authentication where the WWW server and user authenticate each other,
• Second, non-repudiation that leaves evidence of agreement on the network in the form of digital signatures,
• Third, encryption key exchange for data transmission.

KDD is undertaking preparations to market this security system through a KDD group company.