Ongoing security and privacy concerns surrounding B2C electronic commerce have led American Express to issue 'disposable' credit card numbers for its members next month. By ensuring the anonymity and privacy of customers, American Express aims to build consumers' confidence when doing business over the Internet and so support online B2C business.
Cardholders making purchases over the Internet using the 'disposable' credit card option will be able to log on to a secure Web site and receive a one-time-use credit card number. An American Express server randomly generates this, and the number expires after the transaction is completed.
Lack of trust and suspicion of Internet security mechanisms are major barriers to B2C eCommerce. Many transactions, especially in Europe and the US, require the submission of credit or debit card details. With fears of fraudulent use of these details through security breaches, or the lack of an adequate security infrastructure, many current users have been reluctant to use the Internet. Datamonitor's IMPACT study suggests that perception of poor security is an ongoing inhibitor to B2C eCommerce.
By 2005, online consumer spend will grow to a combined $479 billion in Europe and the US, compared to a combined spend of just $21.5 billion in 1999. This growth potential could be accelerated even further if payment security can be guaranteed. American Express' 'disposable' credit card will support online B2C business, as a secure but anonymous payment system is crucial to the growth of eCommerce.
American Express' 'disposable' credit cards will be of obvious benefit to the online consumer, as online fraud and hacking are problems in today's world of eCommerce. For example, Western Union recently reported that hackers targeting its Internet-based financial network may have copied the credit and debit card information of 15,700 customers. Credit and indeed debit cards are the primary means by which payments are made online and as a result customers are concerned about their safety. The idea should prove popular as privacy advocates are also pushing for technology to protect their purchases. The introduction of 'disposable' credit card numbers, which ensure the anonymity and privacy of customers, if accepted by consumers, would definitely help build confidence and trust when doing business over the Internet.