Making the Internet a Little Safer

An Australian firm is trying to make the Internet a safer place to conduct financial transactions for the consumer as well as for the merchant, and a recent partnership focuses on doing so specifically within the I-gaming sector.

SafeTrade, which was launched back in 1999, offers two types of e-commerce insurance. One product protects merchants from fraudulent transactions; the other is a form of customer-directed Internet transaction insurance.

Through a recently formed relationship with ClearTech, the two products will be promoted to the gaming industry. (ClearTech is a joint venture between eSuccess and ClearPay that links eSuccess's Citadel risk management software, hardware and business resources with ClearPay's payment product lineup to create a secure payment processing gateway service specifically intended for online gambling services.)

The merchant-directed insurance, in a nutshell, protects gaming site operators from consumer fraud.

"Combining forces with ClearTech and the use of the Citadel screening software, SafeTrade is able to provide the Internet gaming market a compelling offer in the fight against credit card and electronic check fraud and the generation of chargebacks," eSuccess spokesman Tony Greening explained.

Given the high rate of disputed Internet transactions, particularly with online gaming sites, such services are in high demand.

While it doesn't actually prevent chargebacks, the insurance lowers chargeback rates by making it less likely that SafeTrade-insured sites will get used by customers intent upon defrauding the operator. It's like waving a flag to show that this is a site committed to preventing fraud and misuse of credit cards.

Greening couldn't provide the cost of this optional product, but he did say that most sites should see a drop in their costs since the fee for the insurance is much less expensive than their current chargeback costs. (Chargeback fees start at $15 each, plus a percentage of a gaming site's monthly business. This can quickly escalate to thousands of dollars each month for sites that regularly exceed the minimum chargeback levels set by MasterCard and Visa.)

The two companies will roll out the chargeback insurance program with the next few weeks.

On the other side of the Internet transaction is the consumer, who is frequently worried about supplying credit card details to merchants based halfway around the world. SafeTrade's Internet transaction insurance protects the customer from theft of identity and misuse of payment details.

"It's a feel-good product," said SafeTrade CEO Ross Brierty. Studies show that up to 85 percent of Internet consumers are afraid to use their credit cards for online purchases, he added. But that should change, he says, for sites offering the transaction security insurance.

"Its basic overall concept is to convert lookers into buyers," Brierty said. For a small charge per transaction, customers are gaining greater confidence that their online purchases will be safe. Some Internet companies are reporting huge increases in transactions after signing on with SafeTrade, with sales up as much as 138 percent for some sites.

The insurance protects credit card information during the transaction and assures players that their money is being transferred from their credit card to the site. It doesn't, however, ensure that the player will get his money back through refunds or winnings.

So far, Australian gaming site gamble.com.au and a host of prominent Australian e-commerce sites have signed on for the product.

Information on SafeTrade can be found online at www.safetrade.com.au, while ClearTech information is listed at www.esuccess.ca.