IMGCAP(1)]
New rules governing security for online card purchases in India are set to begin 1 Aug., and some businesses are anticipating difficulties. Earlier this year, the Reserve Bank of India, the country's central bank, told financial institutions to offer consumers more protection for payment card transactions initiated online (CardLine Global, 24 Feb). Those protections could include transaction-identification numbers and online alerts issuers send to cardholders to confirm purchases of at least 5,000 rupees (US$100 or 74 euros), the bank says. The additional authentications also could include online-verification schemes from card companies that require consumers to enter passwords at online checkouts, according to businesses and local press reports. That worries some business owners. For instance, Noel Swain, vice president of marketing for Mumbai-based online travel site Cleartrip.com, says the increased authentication required by the Reserve Bank will raise the chances consumers' payment attempts will fail. "We will now have to redirect consumers to bank sites where they will have to key in an additional password for verification of payment," Swain tells CardLine Global. "For such redirections, [the] number of payment failures goes up 10 times." Cleartrip has created a page to help users register at various bank sites for Verified by Visa and MasterCard SecureCode, two online-verification schemes some banks in India are adopting to comply with the central bank directive. "We [agree with] the common goal for enhanced security for the customer," Swain says, noting only a minority of cardholders are registered for such services. "We may lose on international customers who do not necessarily have to go through this abroad and hence may not be registered for the service," he adds. Banks must work to convince their customers to register for such programs, Swain says. "Currently, it's the online businesses who are exhorting customers to register for the Visa and MasterCard programs," he says. "In the end, unless the banks push for this with their customers, it is difficult to see widespread adoption."
