I work for a company called CyberSource that has been kicking arse in the fraud detection space since it spun out of software.net (beyond.com) a number of years ago. VeriSign's fraud detection is nothing particularly new or interesting. Reactive detection works reasonably well and is continuing to get smarter along with the crooks.
Digital ID and Card Association schemes like Verified by Visa - upfront, trusted, identification of the user prior to authentication at point of sale is where the game will change most dramatically.
Bottom line, there is no digital cash equivalent. There is no such thing as an anonymous Internet transaction and there never has been. If you're handing over your credit card details at point of sale in the real world or online people know who you are. Online, the merchant carries all the risk in the transaction, they have to know or they go out of business. Why do you think they're talking revolt?
That's my two cents, it isn't my employer's. Had to throw that one in Dave ;)
Because merchant's carry all the risk during an Internet transaction customers have no compelling reason to use a digital id at point of sale. Remember that we gave up anonymity and a couple of percent on price for convenience when we chose credit cards. An important tradeoff, right? Make credit cards any less convenient and customers will move down the road to the next web merchant that can manage risk using detection techniques like CyberSource and, now, VeriSign provide.
What is the killer application that will encourage us, the customers, to buy into digital id? Clearly it wasn't MSN Messenger - does anyone have a Passport account with real detail in it? I've seen e-wallets come and go with initiatives like SET - they're all been poor and frustrating.
The card associations go through this split-personality process of telling us their cards protect us from online fraud and then that we should sign up for a password for the card so that no one else uses it. If I'm not at risk then what is my incentive to get a password? Well how about this: merchants should provide a financial incentive - how about 5%? - for using those schemes.
So I'm a UK citizen with a UK address and bank account, who spends a lot of the year in Brazil.
Now when I try to use my "international" Visa card to buy stuff from Amazon (or even the local shops?) this system is gonna kick and stop me?
So instead, I have to fill in a dozen forms just to get the right to open a bank account here. Open an account, bring my money from my UK bank to my Brazilian bank in order to spend it at Amazon in the US? Thanks Verisign!
No protection system can ever outsmart the fraudsters. They are as clever as anyone at CyberSource or whatever. But people will continue using credit cards because it is convinient and it allows to have special bonus so people can save or at list think that they save money.
Comments
I work for a company called CyberSource that has been kicking arse in the fraud detection space since it spun out of software.net (beyond.com) a number of years ago. VeriSign's fraud detection is nothing particularly new or interesting. Reactive detection works reasonably well and is continuing to get smarter along with the crooks.
Digital ID and Card Association schemes like Verified by Visa - upfront, trusted, identification of the user prior to authentication at point of sale is where the game will change most dramatically.
Bottom line, there is no digital cash equivalent. There is no such thing as an anonymous Internet transaction and there never has been. If you're handing over your credit card details at point of sale in the real world or online people know who you are. Online, the merchant carries all the risk in the transaction, they have to know or they go out of business. Why do you think they're talking revolt?
That's my two cents, it isn't my employer's. Had to throw that one in Dave ;)
Posted by: Tim Harding | June 19, 2003 09:31 PM
One more quick follow up.
Because merchant's carry all the risk during an Internet transaction customers have no compelling reason to use a digital id at point of sale. Remember that we gave up anonymity and a couple of percent on price for convenience when we chose credit cards. An important tradeoff, right? Make credit cards any less convenient and customers will move down the road to the next web merchant that can manage risk using detection techniques like CyberSource and, now, VeriSign provide.
What is the killer application that will encourage us, the customers, to buy into digital id? Clearly it wasn't MSN Messenger - does anyone have a Passport account with real detail in it? I've seen e-wallets come and go with initiatives like SET - they're all been poor and frustrating.
The card associations go through this split-personality process of telling us their cards protect us from online fraud and then that we should sign up for a password for the card so that no one else uses it. If I'm not at risk then what is my incentive to get a password? Well how about this: merchants should provide a financial incentive - how about 5%? - for using those schemes.
Posted by: Tim Harding | June 19, 2003 09:57 PM
Great!
So I'm a UK citizen with a UK address and bank account, who spends a lot of the year in Brazil.
Now when I try to use my "international" Visa card to buy stuff from Amazon (or even the local shops?) this system is gonna kick and stop me?
So instead, I have to fill in a dozen forms just to get the right to open a bank account here. Open an account, bring my money from my UK bank to my Brazilian bank in order to spend it at Amazon in the US? Thanks Verisign!
Posted by: phil jones | June 21, 2003 01:51 PM
No protection system can ever outsmart the fraudsters. They are as clever as anyone at CyberSource or whatever. But people will continue using credit cards because it is convinient and it allows to have special bonus so people can save or at list think that they save money.
Posted by: credit card user | March 20, 2007 06:59 AM