CommSecure, which provides secure online payment solutions, will become SafeTrade's preferred internet payment gateway provider. In return CommSecure will recommend its customers adopt internet insurance from SafeTrade.
SafeTrade provides online insurance to consumers against credit card fraud and non-delivery of goods through HIH Insurance, which has a 10 per cent stake in the company.
Additionally, according to executives from both organisations, the partnership is expected to increase the number of consumers actually shopping online as well as customers for both CommSecure and SafeTrade.
According to statistics released by Citibank recently, 60 per cent of Australian internet users still do not trust the internet with their credit card details. Additionally, a 1999 study by IMR Worldwide revealed that although 3.6 million Australians are using the internet, 90 per cent are yet to transact online.
Howard Davies, chairman of SafeTrade, said that both SafeTrade and CommSecure are "committed to eliminating barriers of entry" to online purchasing and overcoming the consumer fears.
"It's entirely consistent that a company like SafeTrade should identify with a company like CommSecure . . . we are both there to give confidence to buy online," he said.
According to Davies, SafeTrade, which has been in operation in Australia for seven months, has 63 customers and is yet to process a claim.
"We're not in the business to make a crappy site look good . . . it would be a concern to us if we had a flood of claims," he said.
"We are addressing the perception (that online payment is insecure). We are using insurance as a marketing tool to encourage people to buy over the internet."
According to Davies, the company is working towards an IPO later this year, which will provide funding for a number of new growth opportunities, including new solutions to protect merchants, and partnerships with credit card companies, telephone companies and online share trading organisations.