Visa U.S.A. announced a joint effort Wednesday with the Internet payment processor Cybersource Corp. to step up efforts to prevent fraud in electronic commerce.
The companies said they will develop and market an enhanced version of Cybersource's Internet Fraud Screen, a predictive modeling system that lets a merchant assess the risk of a given transaction and decide if they wish to accept it.
Cybersource chairman and chief executive officer William McKiernan said Visa, in previous collaborations, deemed the fraud screen "highly predictive" and "gave us tips to fine-tune" it further.
The next phase will involve "more of the same," he said. As part of the deal, Visa-accepting merchants will get discounted access to the fraud screen, one of several components in Cybersource's international transaction processing portfolio.
Jim Degracia, Visa U.S.A. senior vice president for e-commerce, characterized on-line fraud rates as low but said the industry still has to be vigilant.
At 0.08% of sales, the on-line rate is 7 basis points higher than physical-world fraud, he said.