Online Security for Credit Cards

As we have noted in earlier issues of Spotlight, many consumers are concerned about sending their credit card number over the Internet to an online retailer. Obviously, if consumers do not "feel good" about providing their credit card numbers online, they will be less likely to use their credit cards to shop online. CardTrak points out that, over a year ago, Cyota (NY) offered SecurityClick, a card that replaced a "real" credit card number with a one-time transaction number that that expires after use.

Now, a number of issuers of credit cards are offering similar "artificial" credit cards for one-time use online. For example, Discover has issued a free service, DeskShop, which automatically substitutes a new card number each time that the cardholder makes an online purchase. MBNA offers a ShopSafe program, which enables a cardholder to set a specific dollar amount and time limit for a "virtual" credit card number. A survey of Canadian consumers by ACNielsen Corp. found that 67 percent of the respondents were concerned about using their credit cards to shop online, fearing that their card numbers would be stolen. In response, the Canadian Imperial Bank of Commerce will begin issuing one-time Visa card numbers to its cardholders seeking to shop online during the first three months of 2001. According to CardLine, cardholders must register to participate in the program. (CardLine is a new Internet publication of Thomson Financial Media/Faulkner & Gray. For more information call 800-221-1809)

Cardholders of American Express, Discover, Visa and MasterCard all have zero liability for fraudulent Web purchases with their cards. However, cardholders still fear providing their card numbers over this somewhat mysterious system. As a practical matter, their most likely cost in the event of theft would be the time and trouble of identifying the problem, notifying the card issuer and obtaining a new card. However, as shown in the Canadian survey, cardholders are concerned, and card issuers are well advised to respond with security systems.