Visa, the international payment cards group, has voiced concern over the rising number of frauds and disputes relating to goods and services bought over the Internet.

It says that even though the Internet accounts for only 1 percent of its £463 billion sterling (€688 billion) EU turnover, nearly half of all disputes and frauds in the Union relate to Internet transactions.

The trend has alarmed many of the big European banks that issue Visa cards and could damage consumer confidence in e-commerce.

Ms Sandra Alzetta, an e-commerce specialist at Visa EU, said: "We absolutely have to do something about this. We have to make sure that shopping on the Internet is as safe and easy as it is on the high street."

Visa said that some 47 per cent of disputes and frauds were Internet-related. Some 22 per cent of these involved frauds - essentially people saying they did not carry out the transaction - and the other 25 per cent were other types of complaint. Common complaints included consumers saying they did not get what they ordered, or goods were delivered late, or they did not intend to make a purchase, or they did not recognise the supplier's name.

Visa says all complaints involve significant processing costs for issuing banks - or conceding the case without investigation. This was not sustainable, given predictions of explosive growth in ecommerce.

E-commerce transactions are encrypted, but it is hard to verify that buyers and merchants are who they say they are. That is why Visa is urging a swifter adoption of the Secure Electronic Transaction (SET) protocol and a rapid move towards digital signatures.

"We believe SET is the most secure payment method," said Ms Alzetta. However, use of SET is currently "close to zero", according to one industry commentator.

Mr John McGuire, chief executive of Irish company Trintech, which supplies secure payment software, said banks had their own infrastructure in place but they needed to deploy it at merchant and consumer level. It was only right that banks took on more of the cost, he said, because of the fees they collected from merchants for processing transactions. He endorsed the view of SET as the way ahead.