One of the biggest risks associated with credit cards usage for online purchases was the possibility of misuse of the credit card by fraudsters. This was such a big demerit working against both credit card fraternity and net commerce that a solution to this threat was imminent. Till now , for anyone to make online payment, all one needed was the credit card number, the expiry month and year and the CVV number. All the 3 information required to transact on internet was the one which were mentioned on the credit card. So in case a person lays his hand on your credit card , he/she could have easily misused your card on the internet since all the information he needed was readily available on the credit card itself.
This was a huge shortcoming and as such needed to be fixed. Come August 1st, Reserve Bank Of India, has mandated that the credit cards will have to have one more layer of security check before the payment transaction is approved. Now, all the credit card users will have to register their card with the card issuer and get another password which will be unique and will be known only to them. They will have to use this password every time they want to make payment on internet through their credit cards. So, in essence, now one will have to enter the following info while transacting on net
1. Card Number and issuer (Visa/Mastercard)
2. Card expiry month and year
3. CVV number
4. New password or PIN
This extra layer of protection will make the whole process of transacting on Internet more safe and secure for credit card users. This will help the user in a big way. It will also help the credit card companies by increasing the spend per card since more and more people are likely to use their credit cards for online purchases after this security feature thrown in. It will also protect credit companies from booking looses due to misuse of cards.
In short , this is a good step taken in the right direction. So if you have a credit card and would like to use it for making purchases online, then do get that registered immediately.
Be wise and wealthy...