In a move which may turn out to be controversial with some retailers, Visa announced today that it is clamping down on a retail policy that it said sometimes hurts consumers.
The policy is known as "data pass." Using data pass, an online retailer which is known to the consumer offers the consumer an opportunity to buy additional products and services while on the retailers site. The consumer however, Visa said, often does not realize these other products and services are from another party and often carry additional monthly charges or fees.
"Such deceptive marketing can result in high levels of consumer disputes and degrades the efficiency, reliability and security of the payment system," the card brand said when making the announcement, adding that a 2009 U.S. Senate Commerce Committee staff report, found 35 million consumers have paid $1.4 billion for "data pass" marketing offers.
"Visa's priority is protecting our cardholders and the integrity of the electronic payments system. Consumers who shop online using their Visa cards should be confident that they will only be charged for the products and services they legitimately intend to purchase-not those that are foisted on them through deceptive data pass schemes," said Martin Elliott, a Payment System Risk executive for Visa.
Visa said that henceforth customers will have to re-enter their payment information if they are purchasing something from on retailer on another retailer's site. "This provides a clear signal to cardholders that a second purchase is being initiated and protects them from questionable marketing practices," the brand said.