Letter by Mr J R Potts, Chief Executive,
I promised to let you have information relating
to the percentage of applications from Internet merchants that
Barclaycard declines. The figure for the period from January to
April 2000 is 14 per cent and this compares to around 10 per cent
for our non Internet applications. You may remember that in April
we launched a new product specifically designed to help new and
start up Internet businesses. Although these are early days, we
have been able to accept 100 per cent of the applications for
"en@ble" received since launch.
On the subject of fraud statistics, you will
recall that I was not able to quote accurate statistics for the
simple reason that Internet sales turnover is not yet measured
properly in the systems which capture transaction information
across the world. However, banks and retailers are changing their
systems so that we can capture this information with effect from
The information I gave was based upon estimates.
The industry sales turnover estimate of 2 per cent comes from
the Association of Payment and Clearing Services. The estimate
of fraud at 1 per cent is based upon our own internal calculation
and we believe to be reasonably accurate. I therefore do not wish
to change my evidence.
I do know that experience of fraud losses on
the Internet vary greatly.
We have spoken to Datamonitor who have advised
that the figure of £11 million which they quoted was based
on a response to a question raised at a banking conference at
which Datamonitor was present. I am afraid I do not know the details
of the conference but you may wish to pursue this with Datamonitor
(Tel No: 0207 316 0001).
Over time the quality of the data will improve.
In the meantime, the important fact that the Sub-Committee may
wish to note is that the industry is working towards solutions
which will significantly improve security. Barclaycard is playing
a leading role in this work.
Irrespective of the fact that we are currently
not experiencing the same levels of fraud as other companies,
we nevertheless recognise the need to ensure that there is full
confidence in the systems which consumers and businesses use.
The Sub-Committee may be assured that we take this responsibility
23 May 2000