Online credit-card fraud will
be more difficult to do if new authentication
software developed by Arcot Systems for a Visa
USA service is as good as its developers claim.
Arcot and Visa USA officially announced on May
14 that Arcot's TransFort product is being deployed
by banks and merchants to provide real-time authentication
of credit cards over the Internet.
TransFort supports passwords, smart-card chips,
and Arcot's own identification technology. It
can handle PCs, mobile phones, personal digital
assistants or set-top boxes, and complies with
Visa's 3D-Secure program for providing secure
transactions over the Internet.
Arcot has been deployed in major U.S. banks
and by merchants since June, said Mike Houlahan,
Arcot's vice president of marketing.
Visa USA is using Arcot's technology to provide
authentication services, said Jim McCarthy, senior
vice president at e-Visa USA, a division of Visa
USA. Banks could also use an access controller
from Arcot and do the authentication in-house,
or they could contract with a third party for
the service, he added.
Arcot helped develop the specifications for
3D-Secure and is the first vendor to come out
with a product that meets the specification of
3D-Secure, which Visa announced last year as
the successor to Secure Electronic Transaction
technology, McCarthy said. Visa owns the code,
which is open and can be used by other hardware
and software suppliers of security and transaction
processing systems, he said.
"I don't want to limit banks or merchants to
one choice," he said.
Visa has commitments from banks that issue more
than 50 percent of its cards that they will support
3D-Secure, and it will announce in June additional
rules for implementing the service, including
steps to protect merchants against repudiation
of purchases, McCarthy said. Banks are expected
to market the program to their customers.
The system requires merchants to download a
simple software plug-in that will recognize the
authentication scheme. Cardholders sign up for
the new service in the same manner as if they
were activating a typical credit card, by calling
an 800 number and entering a personal identification
number. When making an online purchase, the cardholder
sees a button on a screen and enters his PIN
to have the transaction authenticated.
Houlahan said that the whole system uses methods
familiar to cardholders, requires no changes
in merchant infrastructure, is inexpensive to
implement and plugs into the existing Visa payment
McCarthy said that 3D-Secure will also be used
on Visa smart cards issued by First USA, FleetBoston
Financial and Providian Financial.
In another announcement, Visa said that it is
working with leading suppliers of point of sale
terminals and card processors to make it easier
to use smart cards. That includes availability
of point-of-sale terminals that comply with Europay
International, MasterCard International, Visa
(EMV) interoperability standards for accepting
smart cards. Also processors who support 80 percent
of Visa USA's cards can recognize smart card
as well as magnetic stripe cards certified to
Liz Farnsworth, Visa USA's department head for
smart-card applications, said that the terminal
software applications for smart cards would be
available by the end of the year.