Littlewoods Europe’s addition of Optimal Payments PLC’s Neteller’s e-wallet as an accepted payment method will help protect customers against card-not-present fraud because they will not have to enter their financial or personal information when making an online purchase, according to the United Kingdom-based online retailer, which announced the service March 15.
Littlewoods Europe, which is a part of the UK’s Shop Direct Home Shopping Ltd. group, also accepts credit and debit cards and PayPal payments.
Neteller e-wallet, which is a service brand of UK-based Optimal Payments, an online payment service provider, is a free virtual payment account that enables consumers to shop online without entering personal or financial information during the checkout process.
The e-wallet is an online-payment account similar to a bank account but is specifically designed for online spending, Dan Starr, Optimal Payments executive vice president and chief marketing officer, tells PaymentsSource. Consumers also may use the wallet to transfer funds to other individuals, Starr says.
Consumers sign up and register for a free account on the Neteller website, and they may put funds into the wallet account using a credit or debit card or by linking it directly to a bank account, Starr explains. They then click the Neteller option when asked for their payment method, he adds.
Consumers complete the purchase by entering their Neteller account number, Starr says.
The e-wallet also includes a physical MasterCard-branded prepaid card that links to the e-wallet account as well as a virtual MasterCard, Starr says.
The virtual MasterCard generates a single-use card number each time a consumer makes a purchase online, and shoppers may use it when an online merchant does not accept Neteller account payments. Consumers may use the prepaid card at physical retail stores wherever MasterCard is accepted.
The e-wallet also is not UK-specific, so consumers in other countries may sign up for an account. Because the wallet is available in other countries, many consumers who are shopping on international sites do not have to worry whether the merchant will accept their local payment card, Starr says.
The e-wallet is free for consumers, but merchants pay “a couple of cents plus 3.9% of the sale to Optimal Payments,” Starr says. If consumers use the virtual or prepaid MasterCard, merchants pay the same fees they normally do card payments, he notes.
“Virtual wallets can certainly help prevent data breaches, but if a consumer’s concern is more a malware type of attack, then the wallet is not very safe,” Julie Conroy McNelley, an analyst with Boston-based Aite Group LLC, tells PaymentsSource.
The most interesting aspect of the Neteller eWallet is the virtual MasterCard component, which is very secure, McNelley says. “If a consumer is concerned about security, then the virtual MasterCard will protect them and is an attractive benefit,” she adds.
But while virtual wallets may help protect consumers against fraud, companies such as Optimal Payments may find it challenging to gain consumer adoption, McNelley says.
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