Payments service provider PayPal has partnered with MasterCard to release Secure Card, a new service that enables its customers to make payments on websites that do not normally accept PayPal.
Secure Card, which uses technology from Orbiscom, comes in the form of software that users can download onto their computers. Each time the PayPal user enters an ecommerce sales page that doesn’t otherwise take PayPal payments, they click a PayPal button on their browsers. This generates a unique MasterCard number and fills out the user’s stored financial details on the form.
PayPal stores all the details of Secure Card activity in a central account rather than on the user’s local drive, making it more secure for the user than giving their credit card details to an ecommerce site.
“From the merchant’s point of view, it should be pretty transparent,” said Alistair Newton, a research vide-president at analyst Gartner. “It looks like a card number, it feels like a card number and they process it like a card number. The problem merchants may have is that a retailer like Amazon will ship your goods in separate batches, and won’t charge you till they ship it. If they charge you against this number and it’s a one-time use number, there could be difficulties.” Newton added, however, that PayPal could set the parameters on the software so the unique number would expire after a fixed period of time (such as two weeks) rather than after a single use.
Graham Cluley, senior technology consultant at security firm Sophos, said that virtual credit card systems like PayPal Secure Card were not a new phenomenon: “There have been a number of banks who have been providing systems that produce single-use credit card numbers for their customers to use online, in an attempt to reduce fraud when shopping on the net.”
Cluley added that, although the Secure Card should improve the security of ecommerce transactions, its success was not guaranteed: “Some credit card companies have discontinued their services because they have not proven particularly popular with consumers. PayPal's system will only succeed in widespread adoption by Internet users if it is not perceived as a hassle to use.”
