Visa International is offering its new Payer Authentication Service (PAS) to banks as a way to curb e-commerce-related fraud. By using a realtime password authentication mechanism, PAS helps banks verify a card user's identity more effectively.

Arcot Systems announced its support for PAS, which is based on Arcot's TransFort product. TransFort authenticates and digitally signs transactions in realtime to provide nonrepudiation of online transactions.

"Arcot's infrastructure solution provides Visa's Member banks in the U.S. with an effective option to implement the Visa Payer Authentication Service," said Kevin Weller, senior vice president of technology at e-Visa, a division of Visa U.S.A. "Working in collaboration with our technology partners, Visa will continue delivering new services to banks and merchants to make online shopping more secure."

Each time a Visa card user makes an e-commerce transaction, PAS automatically contacts the bank that issued the Visa card. The user's screen then displays a dialog box where the user can enter authentication information, which the user sends back to the bank for verification. According to Arcot, the additional authentication mechanism won't add significantly to the existing transaction time—the only additional step is for the user to enter the authentication information.

According to Visa, the fraud rate for online transactions is about 24 cents per $100 dollars—almost 3.5 times higher than storefront transaction fraud. Visa also announced its Visa smart card; the company says that the smart card represents a new generation of payment products that deliver personalized services based on the user's needs and lifestyle. The cards are programmable and can interact with merchant-based applications.