American Express to offer one-use credit card numbers

NEW YORK (AP) -- American Express said Thursday that it will offer disposable credit card numbers for safer online shopping.

The initiative, called Private Payments, will be offered free next month to American Express customers and small business cardholders in the United States.

The program is part of a series of products the New York-based company will be launching to address privacy and security issues that have discouraged many people from online shopping.

Private Payments allows customers to buy online without transmitting actual card numbers over the Internet. For each online purchase, the customer obtains from an American Express Web site a random number that expires after the transaction.

"Consumers have a real fear of having their credit card stolen," said Alfred F. Kelly, Jr., group president of U.S. consumer and small business services at American Express. "This fear is the biggest obstacle for a real boom in e-commerce."

American Express has made several moves to address privacy and security, including its offering of its Blue card. The card, introduced a year ago, is embedded with a chip that allows consumers to transfer credit card information directly to online merchants via a card-reading device that is attached to PCs.

Kelly emphasized that the company's Private Payments program reaches out to a much broader audience than its Blue card, which caters to a "tech savvy" customer.

With Private Payments, the customer transfers the random, one-time number to the merchant order form to complete the purchase. The item bought is charged to the cardmember's selected American Express card.

Preston Dodd, senior analyst at Jupiter Communications, an Internet consulting firm, called American Express's initiative a "powerful one-two punch."

A number of credit card companies are pursuing tighter security, he said, but "It has to be inventive to rival what American Express is doing -- or similar but done very soon."

Dodd says fears over online credit card security are exaggerated.

"You are actually safer on the Internet than at a restaurant," he said.

Online credit card transactions by reputable Internet merchants are encrypted, although credit card numbers, once stored on Web site servers, can be susceptible to hackers if the merchant's security is lax.

Copyright 2000 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten, or redistributed.

Analysis: Is it worth getting an Internet credit card?
August 28, 2000
Visa, MasterCard plan anti-fraud initiatives
August 21, 2000
Visa issues 10 'commandments' for online merchants
August 15, 2000
Digital signatures create market potential
July 31, 2000
Defunct Web site leaks credit card info
July 26, 2000

American Express
Jupiter Communications

Note: Pages will open in a new browser window

External sites are not endorsed by CNN Interactive.