Retailers have teased and rolled out online deals for days, even weeks, but the real Black Friday is here.
Verified by Visa and MasterCard SecureCode risk killing online transactions if the card associations do not make clear to consumers how and why to use the anti-fraud measures, says Expedia.
Verified by Visa and MasterCard SecureCode risk killing online transactions if the card associations do not make clear to consumers how and why to use the anti-fraud measures, says Tom Sullivan, director of e-commerce risk at travel services site Expedia Inc.
Sullivan, who is also a director of the Merchants Risk Council (formerly the Merchant Fraud Squad), an organization of e-retailers and technology vendors, says the Visa and MasterCard anti-fraud programs--each of which requires online shoppers to input a personal identification number along with their credit card number at online checkout--should help prevent several types of online fraud over the long term. He says the methods should work well against sophisticated criminals as well as with average consumers who commit what`s known as "friendly fraud" by denying they made an online purchase.
But the growth of Verified by Visa and SecureCode faces a dilemma, he says: Many web sites, including Expedia.com, won`t accept Verified by Visa and SecureCode transactions until there is a large number of cardholders signed up for the programs. Even though these programs shift liability for chargebacks to card issuers instead of merchants, many merchants fear that shoppers will be more likely to abandon shopping carts when they are asked to enter a PIN to complete a Verified by Visa or SecureCode transaction.
But if card issuers step up their marketing efforts to get cardholders to sign up for these programs, they run the risk of signing up consumers who won`t completely understand what`s required of them to participate, Sullivan says. He notes there is little incentive now for cardholders to participate, since many realize they are not held liable for fraudulent transactions on their cards. As a result, he adds, some card issuers have taken aggressive steps to sign up cardholders, such as by automatically enrolling them.
"What`s most worrisome is that consumers won`t realize they were supposed to create a password, and then abandon their shopping carts," he says.
Visa and MasterCard say they are working with card issuers and processors in an effort to sign up more cardholders as well as merchants for the Verified by Visa and SecureCode programs. Jim McCarthy, a Visa senior vice president in charge of the Verified by Visa program, says the program has signed up 500 retailers worldwide, including 82 in the U.S. The U.S. retailers include 1-800-Flowers.com, CompUSA, J.C. Penney Co. Inc. and Nordstrom Inc.