Paypal considering Verified by Visa
What happens when you introduce one of the most widely targeted brand names, i.e. Paypal, with yet another highly targeted brand name, i.e. Visa? Can anyone say Chernobyl?
Seems in an effort to combat fraud, Paypal is in the early stages of considering the use of Verified by Visa and MasterCard (NYSE MA) Secure Code to combat its continued friendly fraud issues. Seems that with all its money and reach, Paypal is at a loss with what to do when it comes to the problem of friendly fraud, an ever growing problem for online merchants.
As consumers become savvier with the ease of charging back legitimate transactions, merchants continue to be faced with the need for a viable solution. While I have my doubts that Paypal will ultimately reach out to Visa for help on this one, it’s an interesting thing to see that even Paypal is having problems tackling fraud.
While Paypal has some of the lowest fraud rates in the eCommerce world, hovering between 20 and 30 basis points (0.20% and 0.30%), that’s a lot when you consider that by 2010, Paypal could be processing upwards of $100 Billions dollars or more a year in transactions.

Comment by Steve on 13 February 2008:
I am a big fan of Verified by Visa and if paypal does ineed consider additing it, it will make paypal more secure and more loved and used payment processor and it will make Paypal the unbeatable king in this category!! Keep it up Paypal!
Comment by George Ehrhorn on 14 February 2008:
I prefer the mastercard’s way of double security for the online transactions rather than verified visa, which I personally feel has some loopholes which can be easily tapped by hackers. Paypal should try Mastercard instead.
Comment by Larry Johnston on 15 February 2008:
This is really a great move by Paypal considering the number of online frauds and phishing attacks that we have been hearing about paypal almost every day at different forums and blogs. This is one of the best move by Paypal in the recent past. I hope others too follow suite paypal soon.
Comment by Jim Chou on 16 February 2008:
What?? I can hardly remember any of my current passwords, and I don’t like to store them electronically, because who the heck knows who can see my info? Now Paypal wants me to remember another password for Verified By Visa oir Mastercard Securecode and then have it ready for every transaction? Hell to the no.
This is a terrible idea, paypal.
Comment by DayDreamer on 24 February 2008:
Recently i got scammed in paypal. I think phishers & other scammers will hate this system and other users should love it. Visa is a good name. Also Mastercard but somehow i prefer visa!
Comment by ManilaGurL on 24 February 2008:
I do think it is worth considering since my Paypal account was just got verified by using a Visa credit card and to think this will prevent fraud. I don’t see any reason why they should not add Visa as an option, anyway.
Comment by swap on 24 February 2008:
According to me any move that make our transactions more secure must be welcomed. I myself was very afraid of doing online transactions when I began. Moves like this will not only lower the Fraud rates it will also attract more people to the world of eCommerce.
Comment by Jamie on 24 February 2008:
I think this is great for paypal users as this is a positive outcome to handle online scammers. However in my part of country VISA is not a common CC. Hope Mastercard will also take the same step as Paypal is currently used all over the world.Its better to be safe than to be sorry!!
Comment by Rootkit on 25 February 2008:
Its a good idea. There will be less cases of hacked accounts and thefts . It will make paypal more secure and attract more customers also once the word spreads out that paypal has a foolproof security system :)
Comment by zhar on 29 February 2008:
The reason paypal is still surviving and the leader in the payment processing system is because their anti-fraud systems are pretty good then others. There is some problem with users charge backing after a legitimate purchase but there has been more good done by chargeback than bad.
Comment by Only Espadrilles on 5 April 2009:
Verified by Visa and MasterCard SecureCode authentication are a must for any merchant wishing to avoid costly chargebacks. Hope PayPal integrate this asap.
Comment by Tim on 17 April 2009:
I do not see why additional security is needed. The industry is always improving and with PCI in place its making it harder for people to steel Credit Card Numbers and ETC. You also now have encrypted card readers and the simple AVS (Address Verification System) that stops a tremendous amount of fraud. CVV is also a great tool and if your company is a target for international fraud some companies even offer additional security like velocity control and etc.
I also agree that Verified by Visa is now forcing merchants to remember another password. If you have online banking its another login and password. Your gateway and even your merchant bank accounts you have login and passwords. Email same thing. So what is a person to do? use the same information for each one in hopes of remembering them all. There is a liability in that as well. Its just to much.
Comment by Mark on 2 May 2009:
This is no more security than CVV. But when it fails the terms and condition place the liability firmly on the card holder rather than the merchant or the card issuer. Any protections under the Consumer Credit Act (in the UK) are also bypassed.
Good for chargebacks but not good for the consumer, so it looks like its here to stay.
Security would be a device that issues one time passwords for transactions, these are in wide spread use in europe for banking transactions.
I’ll be using the phone rather sign up to either of the visa verified or securecode.
Comment by C e c i l W a r d on 10 June 2009:
Is it the case that some of the earlier posters are declaring that they actually think that Verified by Visa makes a _purchaser_ more secure? If so, what unbelievable ignorance and naivety. What happens when phishing sites start putting up fake but visually perfect user interface capture in front of the user and then capture the user’s VfbyV account details? It’s just the most ridiculous piece of nonsense I’ve heard in a long, long time.
Of course VfbyV is all about protecting traders while inconveniencing customers and bullying them into increasing their risks. It increases customers’ risks firstly by creating one more set of credentials information to leak into cyberspace, and secondly by educating customers into dangerous behaviour, that of throughtlessly giving up their credentials because a site has gained believeability because of the fake VfV nonsense embedded in it and demands that you comply.