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American
Express is making another foray into preventing online card fraud.
The company is now offering cardholders a more secure way to
purchase online. Beginning this month, AMEX cardholders will be able
to log onto a secure site and receive a one-time-use card number for
Internet purchases. The free service, called Private Payments, still
charges the cardholders card but uses a random number that expires
after one use. The
one-time use numbers should be helpful in reducing online merchants
losses while also attracting a wide consumer field. As many GS readers know, online purchases are classified as card not
present (CNP) transactions and merchants, rather than card issuers,
are responsible for the chargebacks. Regardless
of whether or not you feel that Internet fraud is a reality or blown
out of proportion, the fact remains that some consumers are not
using their cards online for fear of fraud. The recent security
breaches at IKEA, Amazon.com, Western Union, and CD Universe only
fuel those fears. Consumers have a real fear of having their credit
card stolen, said Alfred F. Kelly Jr., group president of U.S.
consumer and small business services at American Express. This fear
is the biggest obstacle for a real boom in e-commerce.
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