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In addition to the Verified by Visa program, many of these retailers are also promoting the Visa Rewards program so that customers who shop at specific online retailers can get additional rewards points. In some cases, consumers can get extra rewards if they use Verified by Visa to make a purchase, Sweeney says.
But not all bank advertising comes from the card associations. Citibank, for one, has its own security program and its own promotions. But like the associations, it puts security near the top of its list of messages that it wants to be communicated in its advertising. "We intend to really pick up on our promotional efforts in the fourth quarter of this year," says Radin. "We want to focus on promoting our virtual account number program and the security benefits that entails."
Citibank`s virtual account numbers take a different approach from what either Visa or MasterCard is doing. A Citibank cardholder who wants to make a purchase receives from the bank a temporary virtual account number. This account number is different for each purchase, but is recognized by Citibank as the correct number during a transaction. Unlike Verified by Visa or SecureCode, merchants do not have to sign up for the service. In fact, retailers don`t even know that the number the customer is entering is different from the customer`s actual card number.
Citibank is also working with select retailers to promote the program, including an effort with Dell Inc. and Sears, Roebuck and Co. where customers get a discount when they shop at those online stores with a Citibank card.
In the case of Dell, the computer company`s catalog features coupons that customers can redeem online when they use a Citibank card to purchase a computer. With Sears, the promotion also applies to consumers who research their shopping online but make the actual purchase using a Citibank card at a Sears store.
When working with retailers on such promotions, the cost to the retailer may vary, Radin says. In some cases, the cost of the discount is shared by the retailer and Citibank. Other times, the retailer pays the entire freight. "It varies, especially when considering whether it is a marketing test or a rollout, but more often, the retailer funds the actual cost of the promotion. What we bring to the table is the value of the marketing as we then pay to advertise the promotion," Radin says.
Citibank is also using its own card web site to promote online shopping with select retailers. Radin says about 30% of the Citibank cardholders are registered to view their account information and pay their credit card bills online. Citibank has recently developed the ability to conduct targeted promotions based on the cardholder`s demographics to its customers when they sign on. The number of personal offerings made on those web sites is up 300% in 2004 from what was offered in 2003, Radin says.
Like Visa and MasterCard, Citibank is working hard to make sure the message it sends out regarding online shopping is consistent with what it is communicating about its card in the offline world. "We`re trying to do a better job when we talk to customers of integrating our messages. We want a mention of online shopping to be integrated into all the card communications we send out," Radin says.
But despite the advertising campaigns that have recently started, with even more planned for the holiday shopping season this year, many observers believe it isn`t enough. "If the card associations are doing much to promote their online shopping programs, it`s stealthware," says John Gould, director of consumer credit for TowerGroup, a Needham, Mass.-based consulting firm. "I do 90% of my shopping online and I haven`t seen evidence that the associations are putting much money into promoting the use of their cards online."
Indeed, one retailer mentioned by MasterCard as a partner in promoting SecureCode—etronics.com—says it is still waiting for those promotions to begin. "We signed up for the service and we put a notice on our site, but that was about it," says Mayer Balser, etronics vice president. As for promoting the service, Balser says, "I thought they (MasterCard) were supposed to do that. We`re still pretty much waiting to see what is going to be done." A MasterCard spokeswoman explains that the association is currently handling all the SecureCode promotions itself and plans an aggressive consumer marketing campaign for late this year in anticipation of the holidays. "We have plans to work one-on-one with specific merchants, but there is nothing we can reveal at this time. We haven`t finalized those plans yet. It might be early next year before you`ll see anything with regards to specific merchants," the spokeswoman says.
Even those who have noticed an increase in the amount of promotions relating to the use of credit card for Internet shopping aren`t impressed with what they`ve seen. "I`ve seen a steady increase in the amount of advertising the associations have done related to Internet shopping, but I have not seen much that is new or interesting when they do promotions," says Jim Accomando president of Accomando Consulting Inc., a firm that specializes in payments systems.
Accomondo is a little more impressed with Citibank`s advertising campaign promoting the security of its card in regards to identify theft—including the online shopping ramifications.
In terms of working with retailers, some of the associations have also tired to align retailers as partners to get the retailers to put their card first on the retailer`s checkout pages. This "default card" often shows up automatically at check out and customers have to then scroll down to click on another card.
TowerGroup`s Gould, however, says the associations shouldn`t waste their time on this issue. "Most consumers who shop online are smart enough to be able to figure out how to click on the card they want to use," he says. "Plus, it`s just like in the offline world, most people know what card they want to use—a decision usually made based on rewards programs or other factors—before they get to checkout. Just because a card shows up first doesn`t mean they`ll use it."