Sellers promised fraud protection

By PETER GRIFFIN

Internet payment gateway provider Kerry Gordon is putting his money where his mouth is in a bid to win the confidence of merchants heading online.

He is promising to insure members to the tune of $10,000 for each online transaction.

Mr Gordon, the creator of secure payment system Net-Fusion, says his company Arion Holdings can completely protect merchants from falling victim to online fraud in the "card-not-present" space, because Net-Fusion removes the need to enter credit card numbers in online transactions.

Registered members buying from Net-Fusion merchants simply enter a password and user name which are compared with their credit card details stored off-line on secure servers and settled with the appropriate bank overnight.

Net-Fusion merchants have to prove only that they dispatched the goods via courier to receive the blanket protection.

The workings of Net-Fusion are based on Unicard, a secure system developed by New Zealand firm GFG.

Mr Gordon said the extent of Net-Fusion's protection had never been offered by the big banks and credit card companies.

"We've been waiting for the banks to lead the way in protecting their customers on the internet but they have really been doing nothing," he said.

"They charge merchants a higher fee because it's a 'card-not-present' transaction but they don't give them a better level of protection."

Mr Gordon said the banks had been unenthusiastic about endorsing Net-Fusion as they prepared to launch their own secure payment service in conjunction with electronic transaction company ETSL.

It, like Net-Fusion, will keep a user's credit card details out of the payment process.

"They're preparing a system where they don't hand the merchants the credit card details," said Mr Gordon. "That's good but it's about a year late. It's older technology than what we're offering."

Uptake of Net-Fusion is largely being driven by Mr Gordon's other venture, shopping portal www.go-shopping.co.nz, which has a buying group of around 6500, largely boosted by the site's access to the user-base of Clear's low-cost internet provider Zfree.

The site hosts around 120 merchants, who feature products on special and use the site as a clearing house for stock.

Mr Gordon said the site allowed merchants a cheap route into e-tailing as his company took care of the payment process and designed their section of the Go Shopping portal for them.

"It's a painless way to dip a toe in the water," he said. "Rather than pay $5000 to design a site and negotiate a separate contract for a payment gateway and then have to promote yourself."

At present www.go-shopping.co.nz turns over $60,000 to $100,000 a month, with the company making money out of merchant membership fees and transaction charges.

Go-Shopping

GFG Group