NBAD leads the way with Visa International's secure E-commerce solution

Visa International has launched its Verified by Visa programme — the company's security solution for online shopping — for the first time in the CEMEA (Central and Eastern Europe, the Middle East and Africa) region. The programme will be rolled out at The National Bank of Abu Dhabi (NBAD) in the United Arab Emirates, and is expected to reduce the incidence of fraud arising from online transactions by at least 50%.

The Verified by Visa programme is an authentication system for e-commerce transactions that validates a cardholder's identity. It has been designed to increase consumer and merchant confidence in electronic commerce and to reduce transaction disputes, thereby helping to increase online sales.

Speaking at a press conference in Dubai today, Brian Huckett, Executive Vice President for Market Development, Visa CEMEA said: "Using Visa's off-the-shelf issuing and acquiring packages, NBAD has demonstrated the speed with which the service can be implemented. In fact, it took less than six weeks from the decision to go ahead until the trial programme began. NBAD was willing to take the first step, a clear sign of the bank's commitment and leadership in embracing new secure payment technologies."

According to Mr Huckett, electronic commerce is now growing rapidly in the region. "E-commerce transactions on Visa cards in Central and Eastern Europe, the Middle East and Africa increased from 68,000 in March 2001 to 111,400 transactions in March 2002 (growth of 64%). Transaction value on e-commerce transactions in CEMEA similarly showed some growth from US$ 4.45 million in March 2001 to US$ 7.4 million in March 2002 (66%) in March 2002. This growth clearly demonstrates the potential for e-commerce, but impressive as this growth is, it is still being held back. At the moment 56% of transactions are still paid for on a 'Cash on Delivery' basis, while globally an average of 64% of e-payment is carried out by payment cards online."

Research conducted in the US and Asia Pacific reveals that more than 70% of consumers cite security concerns as the primary reason for not shopping online. Concerns are expressed mainly over the security of credit card and personal information. However, more than 80% of consumers surveyed said that they are likely to apply for the Verified by Visa service when available. More than half also expressed the likelihood of making online purchases with Verified by Visa.

"Here we have a global solution for buying on the Internet. Verified by Visa is already proving a major success. As a result of regional implementations worldwide, we are seeing tens of thousands of Internet transactions already protected by Verified by Visa. In the US, 6,000 issuing banks have introduced Verified by Visa since December 2001. More than 30 of the top US e-commerce merchants are already using the service, with 49 others now following suit," noted Mr Huckett.

Visa's other regions are following suit with several programmes moving into implementation over the next year.

Speaking at the same event, Steven Haycock, Head of Retail Banking at NBAD said: "We believe that Verified by Visa is in everyone's best interests. Consumers are able to take measures to protect their Visa accounts from unauthorized use by selecting a personalised password that becomes their online 'signature' for web purchases. Only the issuing bank and the cardholder know the password, which means that the cardholder's account details are secure from any other external parties. This safeguards their transactions and provides a level of security and peace of mind that were not previously possible.

"There are also real benefits for merchants selling goods on the Internet. As an issuing bank, NBAD is able to authenticate a cardholder during an online transaction and notify the e-merchant in real time that the buyer is the actual cardholder, thereby protecting merchants from consumer disputes - a phenomenon which has been growing rapidly over the past years. E-merchants who register for Verified by Visa, are screened by NBAD and are informed that there are some minimum service quality standards that each registered e-merchant should incorporate on their websites. With close monitoring of the practices of e-merchants, the buyer is now far better protected against 'bogus' merchants than before. NBAD is extremely proud to make the first move to improve security for all its customers, whenever and wherever they use their cards."

A live trial of the Verified by Visa programme began this month and the service is expected to roll out to merchants and approximately 20,000 credit cardholders this year. In time, NBAD hopes that all its cardholders will register. The bank has already received keen interest from several merchants and service providers in the UAE.

"National Bank of Abu Dhabi is pioneering the implementation of Verified by Visa in our Central and Eastern Europe, Middle East and Africa region. Their initiative and vision in being first to market with this innovative product, serves as an example to the many other banks we believe will follow suit. This is an enormous undertaking and we would like to assure them of our continued support in providing the best e-commerce solution on the market today," Mr Huckett concluded.

To enable issuers to sign up for a managed issuer service without having to upgrade their existing host systems, Visa CEMEA has selected the Issuer On-Behalf-Of (OBO) service which is run by BT Ignite utilizing ARCOT Systems Verified by Visa certified software. This system provides all the functionality and helpdesk support required for issuing banks to participate in the Verified by Visa programme.

Visa has also negotiated a special deal with ARCOT Systems for its e-commerce acquirers. The deal includes the software, annual license fee and maintenance. The e-acquiring software is installed and integrated on site at each acquirer (or its processor) and comes with around -the-clock (24/7) support.

Commitment has also been received by Comtrust, an e-acquiring processor, for the installation and integration of the Arcot software for the National Bank of Abu Dhabi's e-merchants.

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