Online fraud rises as 3-D Secure remains unpopular

Online retailers could be losing over half a billion pounds in fraud according to a new report by prepaid card provider 3V and industry body the Interactive Media in Retail Group (IMRG).

A survey of the IMRG's members conducted last month found that over a third said they had experienced a marked increase in online fraud since the introduction of chip and PIN on the high street.

But while 64 percent of respondents said they are increasing their anti-fraud measures, over half stated that they have no plans to introduce the 3-D Secure initiative – Verified by Visa or MasterCard SecureCode – because customers find it hard to sign-up to the systems.

"The increase in online fraud is directly attributable to chip and pin success on the high street," argued 3V's chief executive Kieron Guilfoyle. " Two-factor authentication is critical in reducing fraud; it's difficult enough getting customers to make a purchase in the first place without breaking their journey by making [them sign up to 3-D Secure]."