Visa, VeriSign to Unveil Codes To Protect On-Line Purchases
April 03, 2011
NEW YORK -- Visa International and Internet-security company VeriSign Inc. are expected to unveil Monday a digital coding system that promises to allow safer purchases over the Internet. The giant credit-card association, which has 22,000 member banks and 410 million card holders, and VeriSign have devised specially scrambled codes that card holders could use to make purchases, and that would let merchants validate card holders' identities. Visa and its partner are counting on the new system to close a gaping hole in card security, particularly as it pertains to purchases via the Internet. Many card numbers get stolen at the point when merchants handle the transaction. Such fraud at the merchant level costs U.S. banks several hundred million dollars a year in lost revenue, and Visa wants to use the new system to keep the same problem from hitting Internet purchases. Under the new system merchants never actually get a credit-card holder's full card number. VeriSign, Visa's partner, handles most of that information along with the member banks. Also, under the new system, a card thief would have to not only gain access to a holder's credit-card number, but would also have to break the digital keys to make a purchase. A customer making an on-line purchase simply transmits at the push of a button a three-tiered computer message containing a special decoder key; a message with the goods that are being purchased and their pricing; and a ``digital certificate,'' which contains the user's identity, partial credit-card number and the bank that issued the customer's credit card. The merchant uses the key to unlock the message, and uses the certificate to verify the identity of the buyer and the buyer's credit. Once the buyer is deemed legitimate, the purchase is put through and a bill is sent. ``This is probably 100 times safer than what's done off-line in the mail-order and the telephone-order businesses,'' said Choi Koon, VeriSign's president. Allene Schuler, analyst at the Gartner Group Inc.'s Dataquest research firm, said: ``It makes the purchases safer because it allows each party of the transaction to do what they're supposed to and nothing more.'' Various Internet payment schemes are under way. The Visa-VeriSign system seems to have the most backing. The system is based on technical standards developed by Mastercard International, International Business Machines Corp., Cybercash Inc. and the software firms Navigator Communications Corp. and Vastsoft Corp.. Navigator and Vastsoft plan to incorporate the Visa-VeriSign payment system of codes in their Internet software.
