AmEx Introduces Service for Safe Online Buying
The announcement issues of Internet privacy and security are front and center. AmEx thinks the Private Payments product may help calm the fears of online shoppers.
"Private Payments is a win-win for our customers," said Alfred F. Kelly Jr., group president of U.S. consumer and small-business services at American Express, in a statement. "It gives consumers peace of mind, knowing their actual card number is not transmitted over the Internet."
Though fewer than 3 percent of Internet users in a recent study by the Pew Internet & American Life Project, Washington, said their credit card information had been stolen online, 68 percent feared such a theft.
Also, highly publicized incidents, such as the January theft of thousands of credit card numbers from the CDUniverse Web site and the recent exposure of consumer information on Ikea.com and Amazon.com, have heightened the debate about online security.
The Private Payments service, which will be available in the next month, will allow AmEx's consumer and small-business cardholders to shop online without submitting their credit card numbers.
After registering for free at the AmEx Web site, cardmembers receive a user name and password that link the AmEx card of their choice to the Private Payments system. Purchases are charged to customers' cards and appear on their monthly statements.
Each time a member is ready to make a purchase online, he clicks the Private Payments option on the AmEx home page or on the icon on his desktop, and a unique card number is assigned for the purchase, keeping the actual card number secure.
Later this year, AmEx expects to announce a private browsing product that will allow customers to surf the Web anonymously. The product is being developed in partnership with Privada Inc., a digital privacy and infrastructure provider.