Policies needed to protect online shoppers

Customers are now more willing to transact online but while online payment processing services are secure, these technology providers can do more to boost consumer trust as news of identity and credit card fraud continue to surface, say online merchants.

ZDNet Asia spoke to two Singapore-based online shopping sites which use PayPal as their payment processing gateway and described the service as "secure".

A spokesperson from Momominerals, a shopping site selling cosmetics, said in an e-mail interview that the company started accepting local bank transfer as a payment alternative because there were potential customers who were wary of giving out their credit card information online, despite the option to use PayPal.

Since providing bank transfer as a payment option, the site has seen "a good number" of customers who started out using bank transfer and later progressed to using their credit cards or PayPal accounts to make payment due to convenience, said the Momominerals spokesperson.

Daily deal site, Deal.com.sg, told ZDNet Asia that the site has not received queries related to online payment. Co-founder and COO Jan Croeni attributed this to having a clientele that is "highly tech-savvy and...comfortable making online payments".

Croeni said in an e-mail interview that while online payments can transact in a safe and secure manner, news reports about identity theft or credit card fraud still surface today.

"To help boost consumer's confidence, it would be good if more payment service providers can provide a guarantee or recourse to the consumer should things go awry," he said.

The Momominerals spokesperson added that these payment providers can also demonstrate policies they have established with consumer protection in mind, as well as the various measures to guarantee funds and payments in the event of fraud.

Consumer protection policies in place
Payment service providers PayPal and MasterCard said they have already put in place consumer protection policies for their customers.

In an e-mail interview with ZDNet Asia, Nimish Dwivedi, regional marketing head at PayPal Asia-Pacific, said the company has a Buyer Protection policy that covers the Asia-Pacific region. The policy gives buyers who paid using PayPal a full refund in the event they do not receive the purchased item from the seller.

According to Dwivedi, once buyer has filed a claim with PayPal, both buyer and seller will then have 21 days to address the dispute using an online resolution process. Usually, disputes are related to delivery issues and can be quickly resolved, he noted.

However, if the complaint cannot be resolved within 21 days, PayPal will then review the case and make a decision. If the decision is made in the buyer's favor, a full refund will be credited to the buyer's PayPal account after seven days.

Dwivedi believes the one-month resolution process is relatively quick and structured for consumers across the region. He also noted that the policy covers payments for tangible, physical goods because the delivery of such goods can be established by standard methods such as postal confirmation.

MasterCard since 2005 has adopted a cardholder liability limit of zero dollars for unauthorized use of any Asia-Pacific issued MasterCard-branded cards. However, a spokesperson from the credit card company told ZDNet Asia that cardholders must meet certain conditions to qualify for the zero liability protection.

"[Cardholders must have] exercised vigilant care in safeguarding their cards and immediately notifying their issuing bank of the loss, theft or unauthorized use of their cards," Georgette Tan, vice president, communications, Asia-Pacific, Middle East and Africa, MasterCard Worldwide, explained in an e-mail interview. "The accounts of such cardholders must also in be good standing and cardholders must be in compliance with the terms and conditions of their cardholder agreements with their issuing banks."

Shoppers look out for good security
A study by Visa last year found that 61 percent of online shoppers in the Asia-Pacific region were satisfied with the existing level of online payment security. The study also noted that 76 percent of shoppers relied on the detection of good security implementation on a Web site, to gain sufficient confidence in the online merchant before going ahead with their transactions.

One way e-commerce sites can demonstrate good security well-being is by displaying identity verification seals. In an e-mail interview, Andrew Horbury, product marketing manager at VeriSign Authentication Services, now part of Symantec, said trustmarks on Web sites help increase consumer confidence by identifying sites that are authentic and committed to protecting sensitive personal information entered in the Web site.

Companies that display the VeriSign seal can increase online sales by 10 to 36 percent, Horbury noted, adding that Singapore online ticket booking site, Sistic, saw a 14 percent increase in online sales after deploying VeriSign's EV SSL certificates.

Building customer trust is not just about ensuring secure transactions. Momominerals said it uses a .sg domain name to provide reassurance to its customers that it is a real and legitimate company based in Singapore.

For Deal.com.sg, the site leverages social media marketing via customers who recommend the company and its featured deals to their friends, said Croeni. "Being referred by a happy customer is one of the best ways of building up trust with a new potential customer," he added.