The recent theft of data from some 40 million credit-card accounts in the United States is another reminder of the insecurities of the digital world. Electronic commerce continues to rise in volume but consumers, retailers, financial institutions and other parts of the business chain have not yet adjusted to the demands of this new environment. Foolproof security is impossible -- just as in the bricks-and-mortar world. Maximizing protection requires efforts by all parties involved in a transaction -- customers, businesses and every participant in between.

Rising numbers of Japanese are online: Japan's Information and Communications White Paper reported that there were about 79 million Internet users at the end of 2004, an increase of nearly 100 percent in five years. They like to shop. According to a government survey, Japan's business-to-business e-commerce grew 33 percent in 2004 from the previous year to reach 102.7 trillion yen. Business-to-consumer e-commerce expanded 28 percent to 5.6 trillion, yen and the consumer-to-consumer e-commerce market for Internet auctions last year reached 784 billion yen. Nearly two-thirds of Internet users use credit cards to settle transactions. But the exploding use of credit cards is not restricted to the online world: According to the Japan Consumer Credit Industry Association, by the end of fiscal 2003, 263.6 million credits cards had been issued in Japan, more than two for every citizen.

Vulnerabilities are growing. In mid-June, it was reported that hackers had breached the security of CardSystems Solutions, Inc., a U.S. company that processes credit-card transactions, and gained access to more than 40 million credit-card numbers. This revelation followed the admission in February by ChoicePoint Inc., a data broker, that identity thieves posing as legitimate customers had cracked its defenses and made off with consumer data. Since the beginning of the year, more than 15 large-scale data breaches have been reported in the U.S.: Nearly 50 million accounts in total have been compromised.