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   Anita Bora

Visa, the credit card giant, has unveiled a system that lets you attach a password to your credit card number. This ensures that if anyone gets hold of your card number he cannot use it over the Internet unless he has the password that only you know of!

Dubbed 3D Secure, the idea is so simple that it sets you thinking why it did not happen with the first wave of commerce on the Net. MasterCard, the other credit card major, is working on a similar system that will be launched next year.

Days after its release in the United States, Visa's 3D Secure is set to be available for select Indian cardholders on Saturday, December 15.

Here is how it works…

You go to the site of the bank that issued you your Visa card. Here you can type in your card number and a password of your own making. This simple process takes the password that only you know of and attaches it to your card number.

Next, when you visit an online shop and make a purchase by typing in your Visa credit card number, you will be prompted for the password you made before going through the regular transaction. This ensures that nobody else uses your card number.

In the offline world, like in a music store, you hand over your card freely to the cashier who makes you sign across a receipt to ensure that you are the person who actually holds the card. On a Web site, it is not possible to verify signatures to ensure that it is really the cardholder who is typing in her card number. Visa hopes to clear this problem with its 3D Secure passwords.

However, Visa cardholders who choose to not acquire a 3D Secure password can continue using their cards online, albeit without the advantages of 3D Secure.

How Shopping Online with
Visa's 3D Secure Payment
System Will Work

ICICI Bank is going to be the first in India to allow its Visa card customers to obtain a 3D Secure password. And several Indian e-commerce sites, including rediff.com, have already enabled their systems to support it.


Will you feel more
confident if your
credit card is linked
to a password?

"Consumers will know they can shop safely and conveniently online without worrying about unauthorised transactions and e-merchants will know they are dealing with a legitimate cardholder anywhere in the world," explains Mark Burbidge, senior vice-president and general manager, e-Visa, Visa Asia Pacific.

Shopping sites rediff.com, fabmart.com, traveljini.com and hamaracd.com will be among the first retailers to offer the 3D Secure feature in India.

An ICICI Bank official told Rediff Guide to the Net, "It is the need of the hour where retailers have lost potential customers due to a lack of comfort in the mind of cardholders about the security of their card information."

Niren Shah, CFO, baazee.com, is optimistic that this system will enhance credit card adoption over the Net.

So is K M Ram, a project manager at traveljini.com. He underlines the apparent: "Anyone who might try and use your card now will not know your personal password." Apart from the obvious, Ram shares an insider view: "Additionally, the advantage for the merchant lies in the fact that paybacks will be Visa's headache."

What Ram means to say is that earlier online merchants like him would have to bear the loss if the cardholder refused to pay. This is because in an online transaction, the merchant does not have a signed slip to prove that the cardholder himself used his number online. Now with 3D Secure password in place, the cardholder's identity is not in question and the responsibility of the loss will not be with the merchant anymore.

The ICICI Bank official confirmed with Rediff Guide to the Net: "The merchant bears the risk of potential fraud, which is eliminated in a 3D Secure transaction. Also, the cardholder is safer as he is assured by the issuing bank."

Industry sources believe that 3D Secure's adoption rate in India could only be delayed by the unfamiliar mechanism to acquire the password and use it. However, this should not be a big deterrent claims Ram as the user will only be prompted for an additional password.

A fabmart.com spokesperson told Rediff Guide to the Net that 3D Secure's adoption will be significant only if Visa is able to communicate its benefits effectively to consumers, offer a simple and convenient enrolment process and ensures smooth and robust approval for the retailers.

With only four or five participant merchants initially, the project is not expected to take off in a big way yet. However, Visa has set a deadline of April 1, 2003, for all member banks that issue Visa cards to support 3D Secure for their online retailers.

Worldwide, out of its customer base of one billion, Visa predicts that only 6 per cent will have passwords in the first year. In India, the estimate is even lower. ICICI Bank reasons that the smaller number can be blamed on poor Internet penetration and one participating bank as of now.

Visa believes this authenticated payment system can reduce consumer-retailer disputes by at least 50 per cent. ICICI Bank will initially invite 5,000 customers from their credit card base to participate in the programme.

ICICI Bank is optimistic: "Since 3D Secure directly addresses concerns of the cardholder's security, this should result in a larger population using their cards online."

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