Good morning Dave, interesting idea from American Express.
American Express Credit Cards to Offer
Disposable Numbers for Web Shopping
By JATHON SAPSFORD
Staff Reporter of THE WALL STREET JOURNAL
American Express Co., amid continued consumer concerns over online
security, is proposing an answer: disposable credit-card numbers.
The New York travel and financial-services company announced a new
technology allowing registered holders of any American Express card the
ability to shop online with a random number, rather than their credit-card
number.
The card number would be good for one transaction only, and shoppers
would no longer have to give their credit-card number to merchants over
the Web. The service, to be called Private Payments, will be free for
cardholders, and will cost nothing extra for merchants who accept
American Express. The service will be available to holders of any
American Express card within a month.
"Consumers have a real fear of having their credit card [number] stolen,"
said Alfred F. Kelly, Jr., group president of U.S. consumer and
small-business services at American Express. "This fear is the biggest
obstacle for a real boom in e-commerce."
To the extent the fraud is eased, merchants might lower their costs from
fraudulent transactions. But American Express and other card companies
also charge merchants more for online transactions than those at store
counters because they fall into a category called "card not present,"
supposedly because of a higher risk of fraud. The New York company has
no plans to lower card-not-present rates charged to merchants -- even
though it says this technology will lower fraud risk.
American Express is one of the first big card issuers to actually market this
type of service, free, to consumers, and others are expected to follow with
similar products. Consumers will be able to register for Private Payments
within minutes. Once registered, a window pops up when a shopper clicks
the American Express icon at the check-out page of any retailer's Web
site. The window will automatically fill in a card number and expiration date
with random numbers. The consumer need only type in a password and
the payment is sent.
The merchant receiving the number will process it like any credit-card
transaction, and verify it with American Express. That will complete the
transaction, and the credit-card number, randomly generated for that one
transaction, won't be used again. The purchase is billed to the shopper's
account, but the account's actual credit-card number is kept off the Web.
The primary goal, American Express said, is to convert an untold number
of potential shoppers who troll through Web sites, but don't shop because
they are reluctant to send their private credit-card data. American Express
hopes to tap into the mounting pressure on online ventures to turn Web
traffic into actual sales and profits. |
