Shoppers Will Soon Be Able To Charge Into Cyberspace

Soon you will be able to turn on your computer and purchase everything from compact discs to cashmere sweaters over the Internet, confident that your credit card number is protected from hackers and con artists.

At least that is what MasterCard International and Visa International are banking on. Friday, the two competing credit card associations said they are joining forces to produce a method to ensure the confidentiality of credit card transactions made on computer networks.

Their system, targeted for launch this fall, will work like this:

Consumers will type their name, card numbers, expiration date and other identifying information into their computers, and special software will scramble the data and send it through the Internet to MasterCard or Visa.

The credit card companies will verify the information and “certify” the consumer, who is then free to scroll the Internet and shop.

Merchants also will have special software, the card companies say, to verify cardholders’ identity.

The software will be a plus for businesses that hope to expand sales through computer shopping, says Ruth Susswein, executive director of Bankcard Holders of America, a consumer credit card organization.

“Businesses want to know that their transactions are secured,” Susswein said. “When fraudulent charges go through the system, merchants as well as the credit card companies have to eat some of those costs.”

Generally, consumers are protected against losses of more than $50 related to charges made on lost or stolen credit cards.

But the Internet poses a different consumer shopping problem that the Visa/MasterCard system should help solve.

The Internet is an open system. That is, there’s no foolproof way to know, as a consumer, that the merchant you think you are dealing with indeed is that business.

However, under the Visa/MasterCard system, both merchants and consumers will be “certified” by providing encrypted data that only this new software can unscramble. This way, the credit card companies say, merchants will be assured that consumers are who they claim to be, and consumers can be confident of the merchants’ identity.

Visa and MasterCard intend to publish standards that will be used by software vendors to make programs consumers can purchase for their personal computers. A Visa spokesman said the cost for the software is still unclear.