Password protection for online shopping

Savvy Internet shoppers know that using a credit card for making online purchases is safer than using a debit card or a direct transfer from one’s bank account. Not only does it give cardholders the benefit of chargeback rights from the issuing bank in instances of merchant unreliability, credit cards also offer superior protection against fraud. Unauthorised purchases can be disputed with a credit card, whereas a debit card offers direct entry into one’s bank account.

An additional layer of protection can be provided by these two new services from Visa and MasterCard. Enacted through one’s issuing bank, Verified by Visa and MasterCard SecureCode are rapidly becoming less a voluntary system and more a requirement for online shopping, as retailers utilizing these services can require cardholders to register for the system before accepting their online purchase.

To use one of these systems, one must register for the service with one’s issuing bank. It’s simple to do and requires less than ten minutes. During the registration process, a cardholder will select a password and a personal message, which can be any phrase or sentence that one will recognize readily but that others might not think of, such as “The 1960s were wild” or “I love rugby.”

The next time this cardholder shops with an online retailer that utilizes these services, she will be asked to verify her identity prior to completing the purchase. This is a two-step process, and is no more complicated than entering a PIN number into an ATM machine.

First, during the checkout process, the Verified by Visa or MasterCard SecureCode system will display the cardholder’s personal assurance message, confirming that the site is indeed the one it purports to be, and not a phishing phony counterfeiting as the real website in order to steal credit card numbers from the unwary.

After the cardholder recognises her own personal message, she then enters her password, in turn confirming her own identity for the merchant and her issuing bank. After that point, the checkout proceeds as usual.

This is a clever system, similar to one used by certain banks to heighten security for their online banking customers. It adds considerably to credit card security for online shopping without requiring the cardholder to purchase additional software or taking up an inordinate amount of their time.

The system becomes a touch complicated, however, if there is an additional credit card on the same account. If one cardholder registers for this service, then both must do so, or share the same log-in message and password. If one cardholder has registered but his partner has not and does not know his message and password, she may be asked to provide a different source of funding in order to complete the purchase, although some retailers, during this introductory period of the programme, may accept the purchase without requiring the completion of the security code.

Article correct at its author date: March 2008. Copyright Virtual Office Space, Any unauthorised reproduction of this article will be prosecuted to the full extent of the law. Credit Cards Australia.

If you would like to display this article on your web site please email us.