Making the internet a safer place to shop
NEW security measures are expected to help grow the number of South Africans shopping online, as well as the number of merchants turning to the internet to sell their goods.
While the number of South Africans with access to the internet grew 5% last year to about 3,6-million, or one in every 12 people, Mark Schech, CEO of SA Encode Corporation, says many South Africans are still reluctant to shop on the net. This is a global phenomenon, he says, brought on by perceptions that shopping online is not as secure as shopping in the real world.
SA Encode Corporation is one of the companies instrumental in introducing the new security measures to SA.
Investec, First National Bank and Standard Bank have already adopted the new protocols, while Nedbank and Absa will go live over the next couple of months. They include an additional layer of security in transactions by requiring pin codes and passwords from those using their credit cards online. Card issuers Visa and MasterCard have included this in their Visa 3D Secure and MasterCard SecureCode security measures.
Schech says some of the benefits of the new measures include fewer fraudulent transactions and chargebacks to merchants; increased cardholder confidence; improved payment guarantees; and more profit for retailers due to higher sales and reduced costs.
Merchants authenticating transactions using 3D Secure and SecureCode will be free of liability if the transaction is fraudulent, with liability passing to the issuing bank.
Research by technology research company World Wide Worx shows the value of internet transactions made by South Africans at South African retailers grew 25%-30% last year to R540m, excluding air tickets, accommodation and car rentals booked over the internet.
Similar growth is expected this year, MD Arthur Goldstuck says. Including purchases made at global sites such as Amazon.com would add a couple of percentage points to that growth, Goldstuck says.
South African retailers leading the way in internet sales include Pick ’n Pay Online, Kalahari.net, Woolworths and NetFlorist, while Digital Planet, Edgars, Exclusive Books and Musica are not far behind.
While the new measures will give consumers more peace of mind about shopping online, Goldstuck says the propensity to shop online is directly related to people’s experience on the internet. He says there is a direct correlation between the length of time people have been using the internet and when they start using online banking.
“Once they are comfortable with online banking, they would move on to online retail,” he says. “For the leap from online banking to online shopping, there have to be certain elements in place to give people peace of mind and one of those is the perception of the security of transactions.”
It will also encourage the growth of e-tailers (retailers doing business online), he says.
Anton Gaylard, chairman of the South African Forum of e-Tailers, says online shopping in its current state is still safer than physical shopping as each step of a transaction is tracked and recorded. However, the new measures will encourage growth in the number of online retailers, as they will no longer be responsible for repudiated transactions if they follow the new security authentication measures.
Loading ...