The end of the workaround
To counter CNP fraud, there has been increasing use of fraud screening detection tools by merchants & banks. Notably, there has been continuing investment in cardholder authentication processes such as MasterCard SecureCode and Verified by Visa by both online retailers & card issuers.
Workarounds such as these are extremely unpopular with consumers. In a world already full of passwords that need to be remembered, they usually consist of yet more lengthy alphanumeric phrases. As a result, the number of abandoned online transactions using these solutions has rocketed.
Recent consumer comments on Twitter about unpopular card verification systems
As well as being inconvenient, these authentication procedures are inherently insecure. If a person forgets their password, they simply apply for a new one. For a thief armed with a stolen card and information such as the genuine cardholder’s date of birth – often carried together – acquiring a new password is rarely a problem. Other online payments systems, such as PayPal, require the consumer to either deposit funds into an account before shopping commences, or lodge their banking details in their system. As with credit cards, they also require the seller to pay a substantial premium – typically 3% – to use the service.
Online fraud is a multi-billion dollar problem. With fraud rising as the number of internet transactions soars, the steep increase in transactions using mobile devices and the disadvantages of current authentication systems, it is clear that current methods of tackling these challenges are failing.
