Visa makes consumer e-commerce more appealing

Visa expects its new ‘Verified by Visa’ technology to dramatically increase consumers' and merchants' confidence in e-commerce, and drive a surge in online sales.

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By  David Ingham Published  July 10, 2002

Visa International believes that it has overcome one of the largest obstacles holding back consumer e-commerce — the vulnerability of consumer data. Its ‘Verified by Visa’ technology, which was unveiled to the region today, allows consumers to purchase products online without having to hand over their credit card details to the merchant.
Instead, the consumer keys in a password supplied by his bank which then verifies the consumer’s identity to the merchant. National Bank of Abu Dhabi, the first regional bank to offer Verified by Visa, expects disputes over transactions to drop dramatically with the new technology.

“Consumers are able to take measures to protect their Visa accounts from unauthorised use by selecting a personalised password that becomes their online signature for web purchases,” said Steven Haycock, head of retail banking, NBAD. “Only the issuing bank and the cardholder know the password, which means that the cardholder’s account details are secure from any other external parties.”

The technology is not only a bonus for security conscious consumers, however. Crucially for the merchant, Visa is now willing to provide insurance on online transactions. The absence of this previously is believed to be one of the major factors dissuading more companies from selling their products online.

“This is the thing that they [merchants] really want,” said Stuart Brocklehurst, Visa senior VP and head of digital commerce. “The level of complaints and disputed transactions is now likely to drop significantly.”

Both Brocklehurst and Peter Scriven, regional manager for Visa, are convinced that there will be massive demand from consumers, banks and merchants for Verified by Visa. Security concerns, not consumer apathy, they argue, are the main factors holding back consumer e-commerce.

“Although the dollar figures are not huge, the percentage growth levels show the level of interest,” says Scriven, referring to the fact that the amount spent online in the UAE on Visa cards rose from $56,700 in March 2001 to $1.6 million in February 2002.

Scriven predicted that consumers will relish the opportunity to pay for such things as utility bills and traffic fines online under the Verified by Visa system. Abu Dhabi Duty Free and Thuraya, a satellite communications provider, are amongst the companies that have already signed up for Verified by Visa.

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