'Digital signature' to fight Internet fraud

BRUSSELS, Belgium (CNN) -- As the Internet fast becomes the place to shop, more people than ever are reluctant to send their credit card details via the Net fearing that the information could fall into the wrong hands.

A study carried out recently found that Internet shoppers have problems with more than a third of online purchases.

The UK's Trading Standards Institute found that 38 percent of orders did not arrive at the specified time and 17 percent did not arrive at all.

Problems included a firm, which took credit card details then vanished and a national flower delivery chain which failed to pass on the bouquet but took the cash anyway.

With the advent of Internet banking and e-commerce, consumers now have a need for secure on-line payment solutions they can trust.

Although most trials at present use software solutions, the industry agrees that smartcards are the way forward in establishing consumer confidence.

One such card has been developed in Belgium, where 70 percent of people say they do not trust cyber space with confidential data such as credit card numbers, and 40 percent refuse to shop online at all.

Keeping confidential data secret

Banksys, the company managing all electronic payments made with debit and credit cards in Belgium, believes it has come up with a cure for this consumer reluctance.

The company has developed its Banxsafe system to overcome distrust of Internet shopping and stamp out fraud.

The system involves all bank cards having a chip incorporated in them which works like a digital signature.

By connecting a card reader to their PCs, consumers will no longer have to transmit confidential credit card information over the net.

To complete a transaction the card, with the smart chip, goes into the card reader and the consumer taps in a secret code.

The bank automatically checks the customer's credit and identifies the credit or debit card they want to use. The Internet vendor is then automatically credited.

Banksys, which says that the whole transaction takes less than 20 seconds, claims its system makes selling over the Internet safe for retailers as well as consumers.

Consumer privacy is protected, says the company, because personal financial data cannot be accessed by anyone on the Internet, while the banks do not know what the consumer has bought -- only how much it costs.

A spokesman for the company said: "When users are about to make a transaction, they are automatically identified by the chip on their bank card and the secret code they enter via a smart card reader connected to their PC.

"This ensures maximum protection for the card holder's privacy, since the personal financial data contained on their card cannot be seen by the e-tailer and the bank cannot see order details. The e-tailer only receives data relating to the customer's order."

Chris Lebeer, chief executive officer of Banksys, said: "Basically, Banxsafe is a concept which is completely in line with moving the intelligence towards the card and that is the way we basically handle security."

CNN Brussels bureau chief Patricia Kelly contributed to this report

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Banksys

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