ITWire

Justin Roche, director of e-commerce at Visa Asia Pacific, said that the early user experience of the programme which sought to encourage use of the 3-D Secure protocol had been poor, largely because of the way the banks tried to introduce the system. That he said led to merchants steering away from the scheme.

As a consequence; “Australia uniquely did suffer being targeted by quite a few international fraud rings,” according to Mr Roche.

Speaking at the CA Expo being held in Sydney today, Mr Roche said that the 3D Secure protocol which underpins Verified by Visa, had been adopted by between 25 and 50 per cent of merchants in China, and 10-25 per cent of merchants in India where the incidence of fraud had dropped.

Fewer than one in ten Australian merchants meanwhile had adopted the system. It was that slow adoption which had led to Australia becoming a target for international fraudsters he said.

Mr Roche said that in 2006 37 per cent of all card related fraud was associated with counterfeit cards, while just 21 per cent was card not present fraud. By last year however card not present fraud had rocketed to 71 per cent of all card related fraud.

He said that in the past banks had required merchants wishing to use the 3D Secure system to collect information from their online customers just before a transaction was completed. In many cases this led to online sales being abandoned, and Australian merchants became reluctant to embrace the security programme.

“Now we are advocating that banks automatically enrol their customers,” said Mr Roche who added that the current version of the system was far more user friendly than the early versions. He said that Commonwealth Bank had already adopted dynamic authentication – where a code is sent to a user to verify a transaction – and that the ANZ Bank was poised to follow suit.