(EMAILWIRE.COM, September 23, 2002 ) MasterCard International has unveiled a new global e-commerce security solution for protecting confidential cardholder data over the Internet. The new service, known as MasterCard® SecureCodeTM, overcomes two of the most pressing issues in e-commerce today: cardholder concerns about the safety of online shopping, and Internet merchants' need for an enhanced payment guarantee. MasterCard SecureCode works for both MasterCard® and Maestro® credit and debit transactions and is now being introduced broadly around the world.

The trademarked name, MasterCard SecureCode, will serve as MasterCard's consumer- and merchant-facing name for all of its e-commerce authentication programs and will be prominently displayed on participating merchant and card issuer websites, and in educational materials supplied by issuers to their cardholders. The official program identifier can now be viewed at www.mastercardsecurecode.com.

For consumers, MasterCard SecureCode delivers enhanced protection against the risk of fraudsters using their credit or debit account numbers in cyberspace. Online shoppers will benefit from knowing that only they have access to their personal SecureCode, the key to using their card on the Internet.

"Our research proves that online shoppers and current non-buyers want extra assurance that their account number will be protected from unauthorized use," said Stephen W. Orfei, senior vice president, Electronic Commerce and eB2B, MasterCard International. "MasterCard SecureCode is a global service designed to enhance a cardholder's existing MasterCard or Maestro account, while at the same time giving merchants the enhanced payment guarantee they need to expand their business and serve their customers around the world."

The Cardholder Experience

To use MasterCard SecureCode, consumers will select their own private SecureCode via the Internet or phone, as directed by their card issuer. The code is managed by the card issuer and is never shared with any merchant. Much like the familiar authentication process required for use of a bank ATM, MasterCard SecureCode requires cardholders to enter their special code in a pop-up window or box on their PC before their online transaction can be completed. With this extra step, consumers can be confident that their account is protected, and card issuers and merchants gain greater assurance about the identity of the person completing the transaction.

Bringing MasterCard SecureCode to Market

MasterCard is working with leading payment processors VeriSign, WorldPay and others, to bring MasterCard SecureCode to online merchants around the world. VeriSign has begun enabling its 75,000 merchants, which process approximately 25 percent of all online transactions in the U.S., with support for MasterCard SecureCode. WorldPay has also begun automatically enabling its more than 17,000 multi-currency merchants in 115 countries. Additional processors, and the merchants they represent, are expected to be announced shortly.

These implementations will enable merchants to receive authorizations based on cardholder authentication data from MasterCard's participating financial institutions, following successful confirmation of the cardholder's identity by password. This is equivalent to a signed sales receipt in the physical world and will help reduce incidences of online fraud, while improving both consumer and merchant confidence for orders placed and accepted over the Internet.

"With increases in the number and sophistication of fraud attacks, e-commerce provides fertile ground for cardholder authentication protocols, such as MasterCard SecureCode, being implemented," said Avivah Litan, vice president and research director, Gartner Financial Services. "More than half of web merchants recently surveyed stated that fraud risk and a lack of cardholder authentication are currently the biggest problem with their online payment system. It is clearly in the interest of all parties to lower the level of online fraud."

Benefits for Online Merchants

MasterCard SecureCode uses MasterCard's proven Universal Cardholder Authentication Field (UCAFTM) to provide an enhanced payment guarantee to online merchants by presenting, collecting and passing cardholder authentication information. Using hidden fields and a merchant plug-in application that is integrated with merchant web pages, along with authentication information generated by issuing financial institutions, MasterCard SecureCode provides explicit evidence of the cardholder's involvement in a transaction.

Online merchants that support MasterCard SecureCode will benefit from a MasterCard rules change that shifts liability away from the merchant for chargebacks due to cardholder non-authorization ("I didn't do it") when SecureCode has been utilized. Chargebacks of this nature currently represent as much as 84% of all electronic commerce chargebacks. Merchants may also benefit from an increase in legitimate transactions for existing and new markets, including cross-border transactions - thereby opening up the global marketplace and increasing revenues.

UCAF-enabled merchants based in Europe are already benefiting from the liability shift for chargebacks due to cardholder non-authorization for all intra-European MasterCard transactions. Participating online merchants are positioned to benefit from a similar liability shift globally for fully authenticated UCAF transactions.

Unmatched Flexibility for Issuers

Recognizing the varying needs of card issuers, MasterCard SecureCode enables issuers to choose from a broad array of security solutions for authenticating their cardholders, while preserving a common cardholder experience across platforms. Issuer choices include: MasterCard's PC Authentication Program, MasterCard's Chip Authentication Program or the MasterCard Implementation of 3D-Secure. In all cases, MasterCard's UCAF infrastructure allows the data to be transported securely among the various parties in the transaction.

PC Authentication Program -- A download implementation of MasterCard's Secure Payment Application (SPATM), based on the detailed specifications initially released in June 2001, which fully interoperates with the UCAF hidden fields supported by participating merchants. During a PC Authentication transaction, an issuer pop-up box appears on the order confirmation page, requesting the cardholder to supply his or her MasterCard SecureCode (as defined by their issuer e.g. password). SPA has been licensed to more than 80 technology vendors and involves the use of a small downloaded applet by the cardholder that works on his or her PC.
Chip Authentication Program -- Designed to build on the ease of use and security of an EMV-compliant smart card for authentication through a user's PC. With the Chip Authentication Program, the cardholder inserts his or her smart card into a card reader and enters his or her password. The chip then generates a value that the cardholder places into the issuer pop-up window that appears on the order confirmation page. This solution is designed to interoperate with UCAF and is supported by both standalone and connected smart card readers.
MasterCard 3-D Secure Implementation -- MasterCard is providing further issuer choice by supporting a MasterCard implementation of the 3-D Secure specification. The MasterCard implementation of 3-D Secure includes support for the SPA algorithm and UCAF without any changes to the core 3-D Secure specification or protocol. This implementation of 3-D Secure becomes a client-less authentication solution for MasterCard issuers that prefer not to deploy applet-based security solutions.
MasterCard SecureCode also provides issuers with a new way of supporting Maestro PIN-based debit transactions over the Internet, and opens the door to more cross-border transactions with merchants in countries where debit is more established than credit.
About MasterCard International

MasterCard International is a leader in global e-business. MasterCard is focused on providing its member financial institutions with customized, meaningful global e-business solutions that connect them to their accountholders. Through its investment in industry innovation, participation in standards development and business alliances, MasterCard is staying in the forefront of technology integration to enable anytime, anywhere payments across multiple channels and various devices. MasterCard's global e-business solutions include Internet security, smart cards, mobile commerce/wireless, business to business electronic commerce, and numerous emerging technologies.

MasterCard International has a comprehensive portfolio of well-known, widely accepted payment brands including MasterCard®, Cirrus® and Maestro®. More than 1.7 billion MasterCard, Cirrus and Maestro logos are present on credit, charge and debit cards in circulation today. A corporation with more than 15,000 member financial institutions, MasterCard serves consumers and businesses, both large and small, in 210 countries and territories. MasterCard is a leader in quality and innovation, offering a wide range of payment solutions in the virtual and traditional worlds. MasterCard's award-winning Priceless® advertising campaign is now seen in 90 countries and in 45 languages, giving the MasterCard brand a truly global reach and scope. With more than 28 million acceptance locations, no payment card is more widely accepted globally than MasterCard. For the six months ended June 30, 2002, gross dollar volume exceeded US$534 billion. MasterCard can be reached through its website at http://www.mastercardinternational.com.

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Produced for MasterCard International

Contacts:

Christina Costa
MasterCard International
914-249-4606
christina_costa@mastercard.com

Karen King
Brodeur Worldwide for MasterCard
203-399-3303
kking@brodeur.com

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MasterCard International
Joseph Nchor
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