Safer Plastic

To ease consumer fears of shady e-tailers and bright hackers – and save themselves and member banks a bundle by avoiding unauthorized sales – plastic peddlers are trying to make the Internet a safer place to shop.

American Express has a new set of security and privacy offerings, the flashiest of which are disposable credit card numbers. With the free Private Payments system, customers can get unique credit card numbers linked to their standing account each time they make a purchase on-line. They thus avoid transmitting their “real” numbers and leaving them in the hands of on-line merchants. The single-use numbers don’t work for recurring charges, of course, but they also don’t work for thieves who try to make multiple purchases. Recently, Discover Card announced a similar program called Deskshop, which allows customers to obtain unique credit card numbers for use at a single store.

Visa is taking a different tack by developing the Internet equivalent to the codes stored on credit cards’ magnetic stripes. Since on-line transactions don’t allow a cashier to physically swipe the card for extra verification, consumers will instead use a password issued from and verified by the card-holding bank. Visa also unveiled a new set of security regulations that member banks, merchants and third-party service providers will eventually have to adhere to – straightforward requirements such as implementing firewalls and encrypting stored data.

Susan Grant, director of Internet Fraud Watch, a program of the National Consumers League, is encouraged by these efforts and says they’re good for business. “Consumers have very strong concerns that affect their willingness to take advantage of the electronic marketplace.”