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Programs from both associations appear to have gained from widespread promotions sponsored by the two in recent months. Visa began in June a seven-month campaign in which it is utilizing major Internal portal, news and shopping sites to promote its service-including AOL, Yahoo, CNN, Disney, USAToday.com, NYTimes.com and Shopping.com.
Meanwhile, MasterCard has underway a major advertisement campaign targeted to both consumers and retailers that it is running in print advertisements such as People magazine, Sports Illustrated, Good Housekeeping and some trade magazines.
For retailers, benefits in participating in these programs include being able to protect themselves from fraud liability and lower their costs. Verified by Visa, for example, protects merchants from fraud-related chargebacks on transactions that occur through the program. Also, merchants get a five-basis-point discount on interchange fees for all Verified by Visa transactions.
Consumers appear to like the feeling of security they get from the added layer of protection. A survey conducted for Visa showed that 83% of respondents said they felt more secure while shopping online when presented with a payment card authentication option.
Some outside observers then are impressed with the early results. “Implementing programs like Verified by Visa greatly improves consumers’ perceptions of online merchants an increases the likelihood of repeat customers,” says James Van Dyke, analyst for Javelin Strategy & Research.
But some believe both programs have a way to go before widespread acceptance by both consumers and merchants.
“They’re not doing badly with this,” says Avivah Litan, analyst for Stamford, Conn.-based Gartner Inc. “But there is still some resistance on the merchant side. One of the biggest problems they still have is that the merchants who need them the most can’t always qualify. Verified by Visa won’t let in merchants with the highest fraud rates.”
Both Visa and MasterCard executives have said that the programs are only part of a good security system and that merchants need to implement security systems to get their fraud rates down first.
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