Credit card giant American Express announced Friday plans to combat online fraud by issuing customers with disposable credit card numbers.
The new scheme, Private Payments, allows customers to buy online without ever handing over their card number to a third party. Instead American Express will generate a one-time number that can be used to buy online. The customer simply connects to American Express and enters a username and password to generate the unique number.
American Express says because each unique number is sent over the Internet and expires after a short time, this is a more secure method of purchasing online than by traditional means.
"While the Internet has dramatically eased the way consumers research and purchase products, it also has increased concern for protecting privacy and security," says Alfred F. Kelly, group president of consumer and small business services at American Express.
The announcement is timely given the number of online security worries there have been at financial institutions recently. Recent research indicates that consumers concerns about online fraud is putting a serious dent in the progress of e-commerce with Britain suffering monthly e-security blunders.
Last month, utility firm Powergen accidentally exposed many of its customer's credit card numbers and Barclays Bank was similarly troubled when a number of its online accounts were accessed without authorisation.
"Private Payments is a win-win for our customers," said Mr. Kelly. "It gives consumers peace of mind, knowing their actual Card number is not transmitted over the Internet. Merchants benefit from the increased confidence consumers have."
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