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Virtual security opens up new vistas for global companies

By Wang Xing (皇冠体育app Daily)
Updated: 2009-09-18 08:40

Many consumers are reluctant to make online payments due to security reasons.  [Xiao Chunhu]

Third party online payment security service providers are set to expand their business aggressively in 皇冠体育app, after the central bank recently urged lenders to tread slowly on credit cards and asked them to build in adequate safeguards to make the transactions safe and fool-proof.

The government directive stems largely from the indiscriminate issue of credit cards by banks without checking the antecedents of the applicants and the ensuing surge in defaults.

The Chinese central bank also warned of the potential risks arising from overdue credit card accounts. By June 30, credit card defaults had touched 5.8 billion yuan ($849.7 million) in the first half of the year, or 3.1 percent of the total outstanding bills, up 131.3 percent from a year earlier.

Carl Clump, chief executive of Retail Decisions, a leading global payment fraud prevention service provider, said his company intends to aggressively expand its business in 皇冠体育app over the next few years to cater to the growing demand.

"With more and more Chinese consumers purchasing goods using the Internet, it is only natural that cases of fraud may also increase."

Clump, however, refused to reveal what kind of growth his company was expecting in 皇冠体育app or any details on the market.

According to a report from CyberSource, an e-commerce payment management firm, global payment frauds led to revenue losses of nearly $4 billion last year and accounted for 1.4 percent of the total online transactions.

The number of credit cards issued in 皇冠体育app rose to 162.62 million by the end of June, up 32.9 percent from a year ago, according to the People's Bank of 皇冠体育app.

Clump said in recent times the number of instances of the 'card-not-present fraud" in 皇冠体育app's airline industry has gone up by 60 percent over the last six months and from 5 percent of the total transactions to 8 percent.

The fraud involves using stolen card information and personal identification numbers for online transactions.

Related readings:  Central bank: Credit card debt continues to grow  皇冠体育app's banks tighten credit card policies  Capital of E-Commerce in 皇冠体育app  E-commerce evolving as growth in exports falls  Migrants start e-commerce back at home

With 皇冠体育app forging stronger links with the outside world, and becoming a global business leader, it needs to invest more in setting up effective and foolproof online security infrastructure.

皇冠体育app is now one of the biggest victims of international payment frauds, he said.

Li Juan, senior manager of Visa Information Systems in 皇冠体育app, said security concerns have hampered the growth of online payment business in 皇冠体育app. She said 75 percent of the Chinese consumers still have security concerns and are reluctant to make online payment.

But with the government and banks promoting online transactions in a big way, it is only a matter of time before it gains equal importance with manual payments, said experts. They argue that the ease of use and convenience of making the transaction from home would reduce the physical need to carry currency.

During the first half of the year, online payment users in the country grew 45.6 percent to 52 million, according to figures from CNNIC.

Domestic research firm Analysys International said the transaction volume of 皇冠体育app's online payment market is expected to grow by 128 percent to 538 billion yuan this year.

Zhao Guodong, founder of 皇冠体育appbank Payment, a domestic third party payment firm, said his customers, mostly banks, have started expressing security concerns as their online transactions have started to increase.

He said 皇冠体育appbank Payment, which recently signed a contract with Retail Decisions for fraud prevention services, would invest more money on improving the security of its services.