Online gambling is the number one Internet card fraud problem in Europe, according to Europay, with the UK the worst hit country.
Europay, MasterCard’s European partner, is rolling out a package of anti-fraud solutions to its 11,000 member banks across Europe, as online card fraud rises.
According to Europay, five per cent of all UK credit card fraud losses occur when purchasing goods and services over the Internet. Twenty per cent of online fraud involves cash being obtained via Internet gambling sites without the cardholder's knowledge.
The UK now has a successful betting business, boosted by tax changes last year, with an estimated £75 million a day being spent on gambling.
Peter Warner, director of corporate security at Europay International, says: “While we do not want to be alarmist about the degree of online fraud, which is still small in real terms, the anticipated boom from online and interactive gambling sites means we are acting now to nip this problem in the bud."
Europay's anti-fraud solutions includes:
* new Internet security solutions based on SPA (Secure Payment Application) and Europay/MasterCard’s UCAF (Universal Cardholder Authentication Field) infrastructure, to link the cardholder's identity to the transaction as well as validating the account;
* an address and card verification code that raises an alert if the user incorrectly enters their address and security code;
* card spending monitoring tools that alert the bank if unusual spending occurs on a card; and
* text message verification informing the cardholder via their mobile phone when a transaction takes place to that the customer may confirm or refuse payment.
In the UK, banks and retailers have already agreed to a new payment card infrastructure based upon smart cards used with PINs by 2005.
Europay will also implement significant penalties and fines for rogue merchants abusing the payment card systems, and take a more proactive approach to fighting fraud with national governments, the EU Commission, Interpol, regional police forces, says the association.
For consumers, Internet gambling and casino sites which display a padlock symbol at the bottom of the page have been certified as safe by MasterCard.