Credit card giant Visa set out some time ago to improve online security but, at the same time, provides the consumer with additional confidence in the security and validity of the transaction. The result was Verified by Visa, unveiled in April. Using its 3D Secure technology, online buyers enter a password as well as their card details when conducting a transaction on a site that has signed up to the Visa scheme. In addition, retailers which adopt Verified by Visa will no longer be liable for any "card not present" charge backs, regardless of whether the cardholder has used Verified by Visa or not, something that has been costing unsuspecting consumers dear for many years. Jon Prideaux, executive vice president at Virtual Visa, insisted that we have to face up to the fact that online fraud happens, and take appropriate measures to stifle it. "This is a real problem. The loss rate is 20 times more than in the real world, and that comes down to the merchants," he said.
The evidence to date supports the view that m-commerce is going somewhere and reinforces the view that it needs integrated (and simple) payment management and identity management to realise its potential. These elements of infrastructure lag behind the physical networks, but they are coming.
Celent expects 2003 to be a critical year for the US payment industry as ACH payment networks (NACHA with Project ACTION) and EFT networks (NYCE, Star Systems) race to support A2A transfers and enroll institutions. Over the next 2-3 years, Celent believes that the introduction of A2A could drive Paypal out of business while making banks‚ electronic payments offerings more like the Fedex model, in which consumers trade off between speed of delivery and cost."Drive PayPal out of business." Now that's a bold prediction! Wonder how eBay feels about that? Speaking of eBay, the company held an analysts day yesterday. The presentation slides used are available for downloading.
The shopper shortfall isn't affecting just clothing merchants, and it's not just a New York thing. Retail is tanking everywhere. September sales for the nation's largest retailers missed Wall Street estimates across the board. In fact, they barely beat figures from the same month last year, when stores were virtually empty after Sept. 11. The S&P index of retail stocks has fallen 30% from its peak in March 2002. It's no secret that luxury retailers have been struggling for some time. But now even discounters like Wal-Mart and Target are seeing sales dip.I went shopping at a local CostCo yesterday -- at what is normally a peak shopping time (late morning on Saturday). The warehouse was actually pleasant to shop in, no bumper cart games required, lots of seasonal merchandise piled high, only had one person in front of me at checkout -- but certainly not as busy as I would have expected or endured on other Saturday's a year or two ago. Meanwhile, Philip Klein reports in a Reuters story about how credit is getting much harder to find -- particularly for so-called "subprime" consumers.
The so-called subprime lending market that caters to those with poor or thin credit histories has been brought to its knees, hit by the twin blows of a weak economy and increased scrutiny by regulators. The new climate not only threatens to slow long-term growth prospects for the consumer credit industry, led by firms such as Providian Financial Corp. PVN.N , Capital One Financial Corp. COF.N and retailers such as Sears, Roebuck and Co. S.N It also makes it more difficult for low-income borrowers to get credit cards and loans for homes and cars.