Reducing online credit card fraud
Apr 08 2002
New schemes designed to reduce online credit card fraud could boost consumer confidence in the internet and thus benefit small businesses operating in the e-tailing and new media sectors.
The two leading credit card companies, Visa and MasterCard, have developed guaranteed secure services to cut down on internet credit card fraud. These are designed to assist online retailers and encourage consumers to shop online. MasterCard has launched its Universal Cardholder Authentication Field and Visa’s Verified by Visa scheme is set to be implemented in Europe. Both services are already established in the US.
They operate on a password or PIN basis, making the transaction more secure. In addition, the card-issuing banks have agreed to pay the cost of fraud, as opposed to the retailers picking up the tab.
This follows the credit card companies’ own research into online fraud showing that web credit card fraud is a growing problem. MasterCard’s investigations revealed that 2% of credit card transactions happen on the internet, but internet credit card fraud represents 9% of all fraud.
Understandably, this kind of statistic shakes the confidence of prospective internet shoppers and discourages them from buying online. Roger Horam, an adviser for UK for business online, the Government e-commerce advisory service, stresses the importance of "perceived security" as an incentive for internet consumers. He believes the more the customer trusts the payment systems the more likely he or she is to buy and these new systems could go some way to increasing consumer confidence in the internet.
With thanks to Lloyds TSB Success4Business. For more news and information visit www.success4business.com.
(4/4/02)
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