I spoke with our Paymentech rep in the fall of 2001, when the first few noises about VbV started. Here is a summary of what I took away from our discussion.
- VbV is optional for the card holder to enroll in
- VbV is optional for the Banks to enroll in
- VbV is optional for the merchant to support
Visa may create incentives for each party to participate, but all non-VbV transactions are unaffected by the creation of the VbV system. Thus re-bills
will be unaffected. VbV rides on top of a normal auth + settlement. (like another fraud scrub)
I think Visa has created this program in response to merchants screaming that they get the dirty end of the stick on chargebacks for non present transactions, so Visa made a system where there is another level of authenication of the card holder, and for those transactions, the banks eat the chargebacks. But in reality Visa is not fully behind it, they just want it to shut merchants up.
I think the calculation to decide if you are going to support VbV transactions is:
If surfers start expecting VbV, then what throughput will you lose from those surfers
versus
How much will it cost you to support VbV
I think the whole VbV thing is an example of the network effect. If lots of banks support it, AND lots of surfers enroll and expect it on-line AND lots of merchants support it, it can work. But without all three, it looks like it is not ready for primetime.
Last thought, I think only the most careful and paranoid surfers would enroll in VbV, and they are unlikely to be valuable customers for a membership site anyway
My 2 cents,
mike
Last edited by Penthouse_mike at Feb 26 2003, 05:24 PM
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