Visa Sees Low Uptake Of Password Program
Visa expects that in the first year of its Verified by Visa program, which starts today, only 6 per cent of cards will be linked to passwords, leaving 94 per cent open to fraud, as the New York Times states. If the system works as Visa hopes, passwords will be required for all online purchases, but the priority for Visa issuers is to avoid curtailing cardholders' purchases if they do not want to use the system. In Amazon.com's view, "the amount of friction Verified by Visa introduces for the customer outweighs the benefit from reducing fraud", in turning "one-click ordering into four-point, three-click ordering", instead of one-click purchases."If the market accepts [Verified by Visa] over the next year", argues James McCarthy, a SVP at eVisa, "we have levers we can pull to increase adoption". With eCommerce now representing almost 4 per cent of all Visa card purchases, the fraud rate has reached 25 cents in every USD 100 in online purchases, prompting McCarthy to say, "if we don't get to the root causes of this, the losses will continue to grow". Customer research and surveys at the largest Visa issuer, First USA, show "there is a group that would like us to provide an added level of security", confirms Hugh Bleemer, EVP of eBusiness at First USA.
MasterCard is to roll out its own online verification system, early next year, in the form of an applet that is downloaded to cardholders' PCs and functions similarly to a digital wallet. American Express claims to be "comfortable" with its fraud losses, with eBusiness EVP, David Bonalle, arguing that "as long as Visa and MasterCard don't agree [on a universal system], we're not going to make any progress. But, if the industry agreed on a standard, AmEx would consider moving to a new password, Bonalle says, since "with any new authentication program, you need to have a critical mass" of cardholders and retailers. Related Links
How Visa's Verified by Visa system works
Visa, MasterCard Differ On Authentication
ePayments 'Need Universal Authentication'
E-Tailers Blame Card Firms For Online Fraud
