Skip to content

Credit Card Buying Online...Risky or Not?



Posted December 27, 2001
Even in today’s technologically advanced world, a startling number of people remain fearful of using a credit card on the Internet. However, most people don’t know that if someone steals your credit card number and runs up your bill, you are out $50 at most. That is a federal law. Most credit cards protect cardholders even further with most of them allowing $0 maximums in credit card fraud purchases (Debit cards are subject to different rules and are much riskier).

Even with these laws above, 94.5% of consumers express some concern about credit card security online, up from 91.2% of users in 2000. Even though consumers are nervous, it is actually merchants who should worry. When fraudulent credit card charges occur in cyberspace, merchants eat the losses.

Yet the fact that ordinary shoppers remain scared is still worth noting. It shows how mistrustful people tend to be about technology where security and privacy are at stake. This proves that merchants, banks and software companies need to do a better job of making the Internet feel less scary.

Visa, a leading credit card company, just announced a new program called Verified by Visa to boost consumer confidence. "Create a password that protects you when you buy online," Visa’s Web site tells cardholders. "You get added safety, and the reassurance that only you can use your Visa card online." This technology is similar to PIN numbers with ATM cards and prompts online buyers for a password when attempting a purchase online. The site will not see this password. Instead, it will be beamed to the credit card bank, which will then give the retailer an all clear on the transaction.

If this catches on it could prove valuable in cutting down online fraud, which helps online merchants. A typical online sale is considered a "card-not-present" transaction (as opposed to card-present-sales at brick and mortar stores). When a consumer challenges a card-not-present charge, the merchant is liable for the loss. The password is intended to serve as a receipt and cut down merchant liability.

Reducing fraud helps all in the online purchase chain. Even though consumers don’t have to pay for unauthorized charges, they wind up paying indirectly when retailers raise prices to cover fraud related costs.

Also, the reliability factor with computers crashing and virus-infected emails help attribute to the fear of consumers. If retailers and banks really want to ease consumers’ online doubts, they need to begin holding technology companies to higher standards.

Meanwhile, consumers can practice a few strategies to minimize the credit card problems online. One is to shop at trusted merchants, which doesn’t only mean the well-known stores, however it does suggest checking a merchant out before buying. Also, make sure those Web pages where you’re asked to enter personal information use encryption (signified by a gold padlock icon in the lower right corner of an Internet Explorer window). Avoid using debit cards instead of credit cards and most of all challenge any irregularities.

More Stories

  • **Updated Event Cancellations

    Saddle Horse Report will provide daily updates to the list of canceled and postponed horse events. Read More
  • A Blast From The Past

    Saddle Horse Report is pleased to bring you a series of past feature stories on some of the greats of our sport. Please enjoy this walk down memory lane. Read More
  • Ten Years Ago - Citrus Cup Regional

    While we miss being at Citrus Cup this week, we wanted to add some Florida sunshine with a look at some highlights from the 2010 Citrus Cup Regional. Read More
  • Join SHR on Facebook tonight at 7:30

    Saddle Horse Report is set to premiere with its REPORT LIVE tonight (Wednesday) at 7:30 EST on its Facebook page. Our first guest is AMHA President Tony Lee who is representing the Joint Leadership Council and their work for the horsemen during this crisis... Read More
  • ASR Futurity 2020 Mare and Stallion Nomination Deadline Extended To April 30

    Due to the circumstances related to the COVID-19 pandemic, the ASR Futurity 2020 Mare and Stallion Nomination deadline has been extended to April 30, 2020... Read More
  • Foals N Focus – Week 3

    Once again you responded with great shots of our spring time ritual of foaling future champions. This week the competition was so close we had a tie for Top 3. Read More
  • Ten Years Ago – Kentucky Spring Premier

    We miss being in Lexington this week at Kentucky Spring Premier. Let’s take a look back at some of the highlights from 2010... Read More
  • A message from Saddle Horse Report

    It’s been a while since I’ve had the time to write an editorial, although there have been instances I’ve wanted to offer my two cents on issues facing our industry/sport/hobby. However, now is not the time for discussing “issues.” Read More
  • A note from Jimmy Robertson

    Even though none of us can control what’s happening in our world today, we at Robertson Equine Sales LLC can help with this: our consignors have these nice horses listed at http://RobertsonEquineSales.com... Read More
  • Silicon Valley Horse Show Update

    We are reaching out to you with an update about the Silicon Valley Horse Show, which is scheduled for May 15-17, 2020. We continue to monitor the unprecedented situation that we face with regard to Covid-19 and the effect it will have on the scheduling of our show... Read More