(by G. Andersen)

Visa USA recently reported that eCommerce spending in the US on its credit and debit cards totaled USD 22.3 billion in Q1 2004, a 59 per cent increase over the same period in 2003, according to Business Wire. By contrast, Visa’s online credit and debit card use grew by 53.2 per cent in 2003, to more than USD 60.4 billion, while the number of transactions grew by 44.5 per cent, to more than 722 million. Over 9,000 Visa card issuers now offer Verified by Visa to more than 250 million credit and debit cardholders, and the service is available at over 17,000 Internet retailers, some of whom have cut their fraud-related chargeback volume by 100 per cent.

With Visa’s research showing that 83 per cent of consumers would feel more confident shopping online if a payment card authentication option was available, the card association is offering a five basis point discount on interchange fees for all payments through its Verified by Visa solution. The Internet currently accounts for one per cent of all sales, but UK news site, The Register, reports that 47 per cent of online payments cause problems for Visa. Of this total, 22 per cent were fraudulent and the remaining 78 per cent, late deliveries or other issues, which distorts the real picture of the use of stolen cards online.

In the UK, meantime, value-added resellers are no longer to be liable for fraud from card-not-present purchases under Barclaycard’s initiative to pilot PC-based card readers for secure Internet purchases. Card-not-present fraud accounts for 40 per cent of losses to fraud on UK-issued cards, and costs VARs millions of pounds per year, which until now has not been reimbursed by card issuers. If a PC-based card reader is used for an online transaction at a reseller or a retailer, liability for any fraud shifts to the card issuer, which is seen as a benefit for the growth of eCommerce and future development of the Internet.