Despite increased efforts by merchants to manage online fraud in 2002, total fraud losses continued to escalate, according to this fourth annual survey of US credit card fraud trends and merchant reponses conducted by Mindwave Research on behalf of Cybersource.
The survey shows that current fraud management practices place a significant emphasis on manual intervention, with implications for rising costs as online sales continue to grow.
A significant number of the merchants surveyed plan to adopt new Visa and MasterCard cardholder authentication systems in 2003. These systems ask online shoppers to provide a password during the checkout process and reduce the merchant’s liability for fraudulent charges.
In addition, more merchants plan to ask consumers to locate and provide the card verification numbers on their credit cards in 2003 (these are known as CVV for Visa, CVC for MasterCard and CID for American Express and Discover).
The report says merchants will need to closely monitor the impact of asking customers to provide additional payer authentication information and carefully architect the implementation and integration of these new tools in order to minimise disruption to the online shopping experience for consumers.
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