Credit card transaction is now insured on rediff.com

The horizontal portal and United India Assurance have joined hands to insure online credit card transactions

In what could be termed as a first of its kind in the Internet space, Rediff.com India Ltd and United India Assurance have entered into an alliance to insure all online credit card transactions made on the site, rediff.com. The implication of this development, highlights a release from the Internet company, is that any claim arising from fraudulent use of a credit card on the site will be refunded within 15 days on receipt of information regarding the same. The insurance cover is up to Rs 10,000 per transaction for any product purchased on the website.

Commenting on the issue at a press conference in Mumbai on December 19, 2002, Ajit Balakrishnan, CEO and chairman, Rediff.com, said, "We are giving an assurance to the customer that in case of misuse of the credit card, we would provide relevant insurance cover. This obviously means that we are keen on providing a secure shopping environment and encourage greater usage of credit cards while shopping online."

According to company statistics, the number of people shopping online has seen a six-fold growth - from a mere 2 per cent last year to 12 per cent this year - with the main drivers of this upward surge being young adults in the age group of 20 to 24 years. Says Ajoy Krishnamurti, vice-president, e-Commerce, "If you were to map the demographic profile of Internet users in India, young adults (between 20 to 24 years) account for 37 per cent of the total online population, followed by individuals in the age group of 25 to 30 years at 25 per cent, and teenagers (below 20 years) at 17 per cent. This obviously implies the Internet audience is a youthful lot."

In such a scenario, the merchandise acquired online is typically "low priced", purchases are impulsive and cash on delivery (COD) is the norm, states Krishnamurti. According to him, 72 per cent of Indian orders were cash on delivery with credit-card transactions accounting for a mere 20 per cent of the volume. "With credit card shopping being insured, transactions would move from COD to credit-card based, besides adding a whole host of new shoppers who possess a credit card but don't necessarily shop online," he adds.

Besides these tangible benefits, credit-card transactions are easier and "the cost benefit can be passed on to the consumer," asserts Balakrishnan. "This exercise has been undertaken to build goodwill and ensure that the medium is safe," he adds.

The company claims it generates a turnover of roughly Rs 20 crore a year through online shopping. It expects this figure to grow with the introduction of insurance. Both Balakrishnan and Krishnamurti, however, are tight-lipped about exact figures. Incidentally, the insurance scheme has been set in motion as of yesterday, December 19, 2002. © 2002 agencyfaqs!