The scheme adds an extra layer of authentication to credit card transactions. Every time a card-holder makes a payment at a "Verified by Visa" site, they have to directly authenticate themselves to their financial institution by entering a password into a pop-up window. If the password isn't correct the transaction isn't processed.
But the new service isn't of immediate benefit to consumers. Until all Visa merchants adopt the scheme, fraudsters still have the option of running scams on sites that aren't a part of the program.
Visa International's regional e-commerce manager, Jackie Brian, says the company will push the new scheme hard, and is aiming for uniform adoption.
"The end game is to have all e-commerce transactions going through Verified by Visa," she told ZDNet Australia.
Visa has quite cleverly given merchants a whopping incentive to use the new system. If they subscribe to the new scheme they will no longer be liable for fraudulent transactions.
"We've changed our business rules around internet transactions," she said. "The financial liability will rest on the financial institution that issued the credit card".
Security consultant Daniel Lewkovitz says the incentive will no doubt appeal to merchants who have felt the pinch of fraud in the past.
"Charge backs are a huge problem for a lot of merchants," he said.
The incentive is double-barreled. Consumers will jump on board because the Internet is perceived to be a risky place to buy things, and the merchants will jump on board to transfer liability upstream to the financial institutions. Either way, competition between credit card companies is likely to be fierce as they clamour for a bigger piece of the online pie.
"I think what you'll find is that all of them [the card issuers] are trying to get an advantage over one on other... It's like VHS and Betamax at the moment," he joked.
Pity it's only ANZ..
Wheres the rest of the banks?