Big money vouchers to combat online fraud?

Shoppers who avoid using credit or debit cards when making online purchases, or do not possess such cards, can now spend more on the web after a prepayment service began offering a high-value prepaid voucher that can be used online to pay for goods and services from certain retailers.

Prepaid voucher service Ukash has increased the maximum value of a single voucher purchased at PayPoint terminals and online from £100 to £499. Shoppers buy a Ukash voucher with a unique 19-digit number to use as payment for goods and services online. The firm said the vouchers protect personal identity and provide freedom from credit and debit card fraud, charge-backs and repudiations.

"The £499 voucher value will bring greater convenience to our customers currently using Ukash to shop, making it easier to buy higher value goods and services online" said Mark Chirnside, chief executive of Ukash. "Looking ahead, the advantage of getting internet value when booking flights, holidays, big-ticket household goods or clothing and accessories could be available to the millions of UK consumers who don't have or choose not to use credit or debit cards."

The vouchers face competition from pre-paid Maestro cards such as the Quidity card and the Splash Plastic card, as well as several others carrying MasterCard and Visa logos. Like the Ukash vouchers, they are not credit cards so a person cannot get into debt because they can only spend the amount on the card. These cards can be managed online as well as topped up at the same high-street terminals that sell Ukash vouchers, and are usable anywhere that takes a debit or credit card.

While the cards protect security, children's charities and politicians have claimed that the cards are open to exploitation. The Observer newspaper reported yesterday that children are using such online payment methods to buy alcohol, pornography and to gamble online.

As IT PRO reported last year, such vouchers and cards can help reduce credit card debt as people pay up-front for their spending. According to statistics compiled by charity Credit Action, total UK personal debt at the end of June 2007 stood at £1,345 billion. The statistics also revealed that average consumer borrowing via credit cards, motor and retail finance deals, overdrafts and unsecured personal loans has risen to £4,550 per person at the end of June 2007.

As with prepaid cards, shoppers need not spend their entire Ukash voucher in one go. Change is issued in the form of a new voucher. A set of free 'tools' at the Ukash website allow consumers to combine smaller value vouchers into a single, higher-value voucher, split a voucher into a number of smaller values and convert a voucher's currency.

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