After reading articles like this, which basically state what everyone already knows... signature debit is much less secure than PIN debit, I wrestle with the idea that there must be forces in play who want to keep online debit (PIN debit) offline... It makes absolutely no sense.
Think about it...offline debit for online shopping is oxymoronic. "Online debit for Online shopping" is about as pragmatic as it gets.
Again, PIN debit is preferred by merchants and consumers alike, and, because it's more secure, interchange fees are 50% lower. Combine those facts with the global movement against Visa/MC to lower interchange and "online debit" for "online shopping" appears to be a no-brainer. Obviously, Avivah Litan is correct in her analysis that it all comes down to the fact that the forces that be, want the fees they derive from pushing (and rewarding the use of) a less secure "signature" product. It's nuts to me. Why fight high interchange when you can switch to PIN Debit and cut interchange in half? Are retailers, thus their online counterparts fighting the wrong fight?
Think about it...offline debit for online shopping is oxymoronic. "Online debit for Online shopping" is about as pragmatic as it gets.
Again, PIN debit is preferred by merchants and consumers alike, and, because it's more secure, interchange fees are 50% lower. Combine those facts with the global movement against Visa/MC to lower interchange and "online debit" for "online shopping" appears to be a no-brainer. Obviously, Avivah Litan is correct in her analysis that it all comes down to the fact that the forces that be, want the fees they derive from pushing (and rewarding the use of) a less secure "signature" product. It's nuts to me. Why fight high interchange when you can switch to PIN Debit and cut interchange in half? Are retailers, thus their online counterparts fighting the wrong fight?
Visa bids farewell to signatures | Australian IT
VISA Australia plans to replace signatures with electronic identification for credit card transactions in an attempt to combat fraud.
The use of personal identification numbers (PINs) is part of a seven-pronged initiative to tighten the security of payment systems within the next five years, the company said.
In mid-year some merchants began accepting PINs as an alternative authorization method.
According to Chris Clark, Visa Australia general manager, the introduction of PIN as the cardholder verification method will add another layer of security for card present transactions. In addition, all online merchants in Australia will be required to check the three-digit security code on the back of the card, Visa said.
Data security protection for merchants processing less than 20,000 Visa e-commerce transactions annually will also be strengthened. Visa will also ensure all automated teller machines are chip-enabled and activated by 2013.
"The initiatives planned for the next five years will help to combat further all types of fraud and make the system quicker and easier to use," Mr Clark said. "While these initiatives are being implemented, consumers can continue to use the system, as they have done for years, with confidence."
He said the introduction of PIN as the cardholder verification method will add another layer of security for card present transactions.
Editor's Note: Thus, also introducing it for "card not present" transactions, (for which there's exponentially more fraud) also seems to be nothing short of simply a pragmatic move.
Visa plans to have discussions with the financial and merchant communities to set deadlines for the implementation of its security initiatives. According to the Australian Payments Clearing Association, fraud on locally issued credit cards jumped to $111.5 million last year, up from $85 million in 2006. Fraud involving credit cards used on the internet or in phone or mail transactions, known as card not present, hit $53.5 million, up from $32 million during the same period.
In mid-year some merchants began accepting PINs as an alternative authorization method.
According to Chris Clark, Visa Australia general manager, the introduction of PIN as the cardholder verification method will add another layer of security for card present transactions. In addition, all online merchants in Australia will be required to check the three-digit security code on the back of the card, Visa said.
Data security protection for merchants processing less than 20,000 Visa e-commerce transactions annually will also be strengthened. Visa will also ensure all automated teller machines are chip-enabled and activated by 2013.
"The initiatives planned for the next five years will help to combat further all types of fraud and make the system quicker and easier to use," Mr Clark said. "While these initiatives are being implemented, consumers can continue to use the system, as they have done for years, with confidence."
He said the introduction of PIN as the cardholder verification method will add another layer of security for card present transactions.
Editor's Note: Thus, also introducing it for "card not present" transactions, (for which there's exponentially more fraud) also seems to be nothing short of simply a pragmatic move.
Visa plans to have discussions with the financial and merchant communities to set deadlines for the implementation of its security initiatives. According to the Australian Payments Clearing Association, fraud on locally issued credit cards jumped to $111.5 million last year, up from $85 million in 2006. Fraud involving credit cards used on the internet or in phone or mail transactions, known as card not present, hit $53.5 million, up from $32 million during the same period.
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