The Visa Canada Association and banks that issue Visa cards hope Canadian consumers will feel more secure about shopping online this holiday season thanks to Verified by Visa.
The service is a global Visa security initiative that
was introduced to the Canadian market last week. Visa Canada first announced the service in January with an original rollout date of April.
Verified by Visa — which many cardholders will find they must sign up for in order to buy online from participating merchants — assigns passwords that cardholders enter to complete online transactions. Being asked for the password online is “”basically like being asked to sign for your credit card being used at a regular merchant,”” said Sean Amato-Gauci, senior manager of business and product development for credit cards at RBC Royal Bank in Toronto.
“”It almost acts like a face-to-face transaction,”” said Zack Fuerstenberg, director of emerging channels at Visa Canada.
Visa Canada and the banks are promoting the program to consumers as a way they can feel more secure about using their cards online.
Fuerstenberg acknowledged that in fact, merchants selling goods online have more to fear from credit card fraud than consumers, since the merchant does not obtain the cardholder’s signature in an online transaction and therefore has no proof the transaction was legitimate if the consumer denies it. “”Because it’s a card-not-present transaction,”” Fuerstenberg said, “”traditionally the merchant bears the responsibility.”” However, he said, “”a lot of the research we’ve done indicates that there’s a perception issue that’s a barrier to online shopping.””
Jack Nolan, director of operations at Motorola Canada, which was among the first Canadian merchants to sign on with Verified by Visa, said he hopes the program will help alleviate the fears many consumers still have about online shopping.
“”It is more the merchant who is at risk for sure,”” Nolan said, but he added that Motorola has had very few instances of online credit card fraud and has software filters that pick up most attempts at fraud. Concern about consumer confidence in online shopping was Motorola’s main motivation for signing on with the program, he said.
Nolan said his only concern is that some major banks are forcing their Visa cardholders to sign up for Verified by Visa before they can complete online transactions with participating merchants. Some consumers may find the extra steps too much of a nuisance and abandon their purchases, he said, especially if they do not yet understand the program’s purpose.
Amato-Gauci said Royal Bank is among those requiring cardholders to sign on with Verified by Visa before they can buy online from participating merchants. While he acknowledged the risk of lost sales, he said the percentage of abandoned transactions has been in the single digits. “”From our perspective I guess the overall benefits outweighed that,”” he said.
Fuerstenberg said “”tens of thousands”” of consumers have already signed up for Verified by Visa. About 2,000 Canadian merchants are already participating, he said. They include Via Rail Canada, Birks and Movieposter.com.
Canadian financial institutions offering Verified by Visa include CIBC, Citizen’s Bank of Canada, Laurentian Bank, Royal Bank, Scotiabank, TD Canada Trust and Vancouver City Savings Credit Union.