Johannesburg - South African banks have until next Friday to implement a new security system that could clamp down on nearly 50 percent of credit card fraud.
The system, called 3D Secure, makes online credit card purchases more secure by using a PIN, as is already the case with physical transactions.
The SA Banking Risk Initiative (Sabric) says card-not-present fraud accounted for 48.7 percent of the total credit card losses for last year, including e-commerce, mobile, telephonic and mail-order fraud.
“3D Secure allows the cardholder to authenticate him- or herself while making an online payment, therefore minimising the risk of someone else using your card fraudulently,” said Walter Volker, the chief executive of the organisation behind the implementation of the system, the Payments Association of SA (Pasa).
When a consumer makes an online purchase, their bank will either send them a one-time password for authentication or they will be required to enter the static PIN they get from their bank when they register for the system. The additional authentication of e-commerce transactions via 3D Secure would reduce instances where card numbers had been compromised and then used by fraudsters to do online shopping, Volker said.
He said the larger six banks out of nine that offer e-commerce on their cards would use 3D Secure, accounting for 99 percent of online transactions.
Some banks have already implemented the system, but Volker added next Friday’s deadline should ensure a more “uniform approach to e-commerce security” and said consumers should not be scared to use the new technology.
PayU, a company which provides technical support for the system, agreed.
“The 3D Secure programme further aims to build consumer confidence and trust by offering a more secure online purchasing experience and thereby growing the number of online e-commerce consumers,” they said. - The Star