Online Credit Card Fraud On The Rise In Australia

Post by Sharat on April 2, 2009 · Under credit cards, online security · Comment

The Australian central bank, The Reserve Bank of Australia (RBA) has sounded a warning, suggesting that e-commerce could take a hit unless credit card issuers and banks dealt with the escalating threat of online fraud.

Speaking at a cards and payments conference in Sydney on Tuesday, assistant RBA Governor Dr. Phillip Lowe said “Almost half the fraud on credit cards occurs in situations where the merchant does not physically see the card. If this trend were to continue, it could undermine consumer confidence in transacting online which would have obvious costs.”

Dr. Lowe said that fraud on the internet had increased by a staggering 50 per cent in the last year alone, and suggested that the security of online payments system needed to be improved, despite the efforts of the card majors Visa and MasterCard.

Reserve Bank officials yesterday visited the Australian headquarters of Visa International to inspect progress of the card scheme’s new program to reduce credit card fraud.

For its part, Visa has embarked on an ambitious anti fraud drive after December data released by the RBA showed that online fraud using Australian credit cards had seen an explosion, and had increased by 61 per cent.

The steep rise triggered alarm bells within the card companies which are now aiming to slash fraud activity by 75 per cent over the next five years. Over the next 24 months internet shoppers will be asked to cite an online PIN number before credit card transactions can be completed.

Visa’s Andrew Woodward said his company had a cordial relationship with the RBA.”They’re very happy and very congratulatory about our security initiatives,” he said.

Credit Card companies face increasing pressure to deal with the issue of online payments security. Consumers could potentially opt instead of credit cards for online debiting of bank accounts when making payments, which has been the new trend in e-commerce.

Dr Lowe indicated that the RBA would continue to push the banks to enable consumers to pay merchants from their deposit accounts using internet banking facilities.

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