[Islam-Online- Science, Ideas & Technology]

WASHINGTON (AFP) - Fraud in online transactions is 12 times higher than for purchases made through traditional channels, according to a survey that was released this week. The survey of 160 companies by Gartner Group said that as a result of the high fraud rate, credit card companies charge online retailers fees some 66% higher than for in-store transactions and often force the sellers to bear the costs of fraudulent card use.

"The bottom line is that e-tailers are getting hit from all sides," Gartner said in a statement. "They suffer from fraud that is 12 times higher than it is in the physical world; they incur the costs of all disputes and fraud resulting from Internet sales; and they pay discount rates to the credit card companies that are 66% higher than physical world fees."

Surveyed Internet retailers reported that their average credit card discount rate was 2.5% plus about 30 cents a transaction. The same average for traditional retailers is about 1.5% plus 30 cents a transaction.

Gartner research director Avivah Litan said the higher credit card fees are unfair and could hurt e-commerce. "There is no incentive for a credit card company to break this unfair fee structure for e-tailers," said Litan.

"However, the credit card issuer that is bold enough to lower the fees online could create a real competitive advantage on the Web and possibly gain early market share among e-tailers and Internet shoppers." Litan also said alternatives to credit cards "could give the card companies a run for their money"