As the online retail industry continues to grow from strength to strength, more and more consumers are starting to purchase a wider range of goods and services online. Nevertheless, the risk of card fraud when paying for goods and services online is still a worry for both consumers and retailers alike. In fact, APACS, the UK payments association, released figures in March 2007 which showed that online banking fraud has increased from £23.2 million in 2005 to £33.5 million in 2006 – even though total card fraud losses across the UK had dropped by three per cent.
There are significant measures being taken, however, to ensure that card fraud losses online are being minimised and those payments made over the internet are more secure. Visa, for example, have just launched ‘Verified by Visa’, a unique service that, once activated, disallows any Visa card number from being used for online purchases without entering a personal password that the cardholder will have set up at activation. This simple identity checking service holds a number of benefits.
To begin with, it will effectively improve the security of online transactions, while at the same time increase the confidence of both the consumer and the merchant in online purchases. More specifically, Verified by Visa will also reduce the number of disputes and card fraud activity relating directly to Visa customers.
For online retailers or sites with e-commerce functionality, Verified by Visa is important as it now takes the risk out of internet purchases for both the merchant and the consumer. Retailers will be protected from the cost of fraudulent transactions and any related costs as the password-protected technology implemented by Verified by Visa helps to establish whether a claim is being made fraudulently or not. As a result, retailers will no longer be liable for chargebacks of this kind.
What’s more, research conducted by Visa Europe in the UK, Germany and Spain shows that 84 per cent of people who currently do not make online purchases would be more likely to do so with Verified by Visa. The research also showed that 71 per cent of consumers who already shopped online claimed that they would do so more often as a result of the security offered by Verified by Visa. Therefore, the system is sure to help merchants achieve bigger online sales. In fact, research undertaken by European analysts Gartner Group show that the average Verified by Visa transaction is worth over €138, while the average e-commerce transaction is only worth €73.
From a consumer usability perspective, merchants will also find Verified by Visa an easy addition to implement into their site and consumers will not be hindered by the extra step to their normal online checkout process. So no matter what sort of e-commerce site you run – from short breaks specialists to men’s clothing or even flowers – you’ll definitely be able to integrate the ‘Verified by Visa’ system into your site’s online payment procedure with as little hassle as possible.