Visa International, moving to combat fraud and reduce the number of disputed
e- commerce transactions, approved commercial incentives “to provide
protections and guarantees for e-merchants” that were previously only
available in the physical world.
The decision to promote the worldwide rollout of Visa Authenticated Payment
was made at the board of directors level.
A spokeswoman for Visa International told InternetNews.com that the incentives are basically a shift in the chargeback policy.
“In the event a fraudulent transaction comes through, e-merchants who are using Visa Authenticated Payment will no longer be liable for the amount — the merchant will be paid for the transaction, regardless,” the spokeswoman said.
In the U.S. market, Visa calls the program “Verified by Visa,” and it pops up a screen that lets the user enter a password while shopping online.
But the carrots also came with a stick.
The Visa International board also approved a requirement that effective Jan.
1, 2002, Web merchants that accept Visa cards must offer a secure, encrypted
environment for cardholders. Any e-merchant participating in Visa
Authenticated Payment
satisfies this requirement, the company said.
And by April 1, 2003, Visa acquirers will be required to support 3-D Secure
Interoperability Standard for their online merchants.
The company says that with Visa Authenticated Payment, cardholders will be
better protected while shopping online because card issuers will be able to
authenticate their customers (for example, by checking a password or other
means of identification entered by the cardholder) during the online payment
transaction and notify the e-merchant in real time that the buyer is indeed
the actual cardholder.
Visa said the program is expected to reduce disputed transactions — a major
headache for many online businesses — by at least 50 percent.
“Consumers will know that they can shop safely and conveniently while
preventing fraud on their card, and e-merchants will know they are dealing
with a legitimate cardholder anywhere in the world,” said Malcolm Williamson,
CEO of Visa International.
Visa said it has partnered with more than 60 Internet solution providers and
management consulting firms, including Accenture, Cap Gemini Ernst & Young,
IBM, Microsoft, and Sun Microsystems. All software solutions can be tested
for compliance to the 3-D Secure protocol at Visa’s compliance testing
facilities in California.
The company also said it will extend secure payment solutions in a range of
Internet-linked devices, including mobile telephones, hand-held computers,
set-top boxes for cable and satellite television.
Visa Authenticated Payment is a cornerstone of Visa’s Global Secure E-Commerce
Initiative. Launched in June 2000, the initiative’s other core programs
include Account Information Security, which “establishes global standards for
e-merchants,” and Best Business Practices, which includes Visa-recommended
e-merchant data security practices and consumer protection policies.
