International card provider, Visa, has warned that criminal rings will continue to target Australian consumers online unless uptake of improved payment card authentication methods increases.
Speaking at CA Expo 2012 in Sydney, Visa Asia-Pacific director of eCommerce, Justin Roche, told delegates that, according to Visa’s research, reported online fraud levels in Australia currently stand at $25 million per year.
However, adoption of authentication methods such as Visa’s 3D Secure, which asks the consumer for proof that they are the card holder before buying goods online, was low amongst merchants in Australia and New Zealand. According to Roche, 3D Secure protection has only been adopted by 10 per cent of A/NZ merchants.
“User identification and passwords are considered by many experts in the [security] industry as being inadequate so there needs to be further innovation to identify and authenticate a user,” he said.
According to Roche, even when fraud is not prevented 3D secure reduces a merchant’s financial losses and operational costs through chargeback protection.
Chargeback protection means the credit card company must take responsibility if things go wrong in a purchase. For example, the consumer discovers their card has been compromised when buying goods from a merchant.
“3D secure branding also strengthens the security credentials of the merchant, providing additional assurance to genuine customers,” he said.
“It’s important for us to recognise that card holders signing up for 3D Secure, as well as merchants, will enable the whole [payments] industry to be protected as we move forward,” he said.