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Online shopping is becoming the fastest
growing online financial application worldwide. Whilst this trend is
definitely the way forward for future financial transactions, there
are a number of perceived security risks associated with this move
toward payment convenience as many see the Internet as an insecure
form of commerce.
Addressing these concerns, MasterCard Southern Africa is introducing a
number of security initiatives to ensure that cardholders and Internet
retailers are protected against online fraud in 'card-not-present'
situations. It is believed that these initiatives will build consumer
confidence in online shopping.
Current security concerns are two-fold: the risk for the retailer and
the risk for the consumer. Traditionally, the payment liability has
been the retailer's concern, posing a number of crucial problems and
business predicaments for retailers. However, online retailers who
have implemented a new solution from MasterCard called 'SecureCode'
will be protected from unauthorised purchases.
MasterCard SecureCode is a unique authentication private code that
links a cardholder to a particular transaction, which is aimed at
giving the retailer clear evidence of an authorised purchase. A
private code protects against unauthorised use of credit cards when
cardholders shop at participating online retailers. It's just like
entering a personal identification number (PIN) at an ATM.
Online retailers need only install MasterCard SecureCode software on
their e-commerce servers in order to transfer liability for
chargebacks to the issuing banks. In addition, issuing banks can
deploy corresponding "access control servers" that respond
to retailer requests for authentication. This end-to-end security
solution will ensure all Internet purchases initiated by the
cardholder are authenticated by requesting a PIN, user password and a
digital signature.
"The liability shift will guarantee a security revolution within
the online shopping industry as it not only ensures that card holders
are free of risk when making purchases online but that retailers no
longer carry the liability associated with fraudulent purchases",
says Gary Byrne, vice president payments solutions, MasterCard
Southern Africa.
The financial case for online retailers to offer MasterCard SecureCode
protection to their customers is very strong. Research carried out by
MasterCard International showed that:
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70% of online fraud is due to
cardholders saying "I didn't do it" – i.e. someone is
using their card without their knowledge
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70% of consumers surveyed by MasterCard
say they are concerned with security and fraud on the internet
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73% say that enhanced security would
influence their decision to purchase online
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61% are concerned that their credit
card number may be intercepted by "hackers"
Byrne says that he expects the online shopping industry to
experience significant growth in the near future due to the
increased security solutions and measures alleviating consumers'
online shopping fears. It is anticipated that this in turn will
encourage a new wave of consumers willing to shop online for an
array of products. This could be the tipping point that makes 2005
the year that Internet shopping goes mainstream.
http://www.biz-community.com/Snippet/196/87/1820.html
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