Visa and BBBOnline in Net Security Pact

Visa USA and the Better Business Bureau said Tuesday they have signed a two-year agreement aimed at boosting consumer confidence in e-commerce.

The deal links Visa, the number-one credit-card company in the U.S., with the corporate-backed BBBOnline. The partnership begins immediately with the launch of a program designed to promote safe online shopping for the holiday shopping season.

“We want to change the way some people think about online shopping,” Visa chief executive officer Carl Pascarella said. “There’s a misconception in the marketplace that fraud is rampant online. It’s not.”

Two-Pronged Approach

The partnership will educate consumers on “smart shopping” practices and establish mechanisms to resolve online disputes. Additionally, BBOOnline and Visa will work with online merchants to put in place risk-management practices that keep credit card information secure.

“Working together, we can reach a wider merchant base and a larger number of online shoppers than we could individually,” said Ken Hunter, president and CEO of the Council of Better Business Bureaus.

The partnership will begin by launching a marketing effort designed to raise awareness of the existing programs that the two organizations offer, including secure e-commerce offerings from Visa and the BBB’s Code of Online Business Practices, which enables online merchants to obtain a seal of approval for its practices.

Through the partnership, Visa gains a marketing partner for its family of secure online payment options. In September, Visa rolled out a new “smart card” that stores customer identification information on a tiny chip that can only be deciphered by a smart card reader.

Fraud Concerns

Recognizing that fear of information theft is a barrier to more widespread use of the Internet for shopping, a separate coalition known as the Worldwide E-Commerce Fraud Prevention Network formed in September. The network includes American Express and Buy.com, among others.

Analysts say online fraud costs merchants and shoppers as much as US$9 billion per year. However, Visa’s Pascarella noted that the transition to mail-order and catalog buying in the 1980s was also accompanied by increased fears of credit card theft and a temporary spike in actual card-number theft.

“We are confident that any slight elevation in fraud rates on the Internet will quickly fall in line with other, more established sales channels,” he said.

The BBB’s online Reliability Seal Program, which certifies to consumers that a Web merchant has taken steps to protect credit card information and provide reliable customer service, has provided its seal of approval to about 8,800 Web sites. Corporate backers of BBBOnline include America Online, Hewlett-Packard and Microsoft.