The Australian Competition and Consumer Commission has knocked back an application by the peak payments industry body for authorisation to mandate an online payment security measure.The ACCC has issued a draft determination denying authorisation to the Australian Payments Clearing Association, which was seeking to mandate use of 3D Secure as a way of reducing online payment fraud.The ACCC said there was already a range of anti-fraud products in the market for merchants to choose from and that mandatory use of 3D Secure would reduce competition in that area.The ACCC said mandating the use of 3D Secure would also impose significant costs on a large number of Australian businesses."There is broad support for reducing online transaction fraud and the ACCC supports moves by the industry to address this growing problem," the ACCC said in a statement issued on Friday."However, we do not endorse mandating a single anti-fraud product. We understand mandating a particular product is out of step with the approach taken in overseas jurisdictions."The regulator said that, because the cost of online fraud was borne principally by the merchant, the merchant should have the right to consider its particular risks, costs and other circumstances when making a decision about investment in anti-fraud measures.3D Secure was developed by Visa and has been made available to other card payment schemes including MasterCard and American Express.The ACCC said it was concerned that mandating this product with no controls over pricing or access would harm competition.APCA had argued in its submission that there was genuine market failure, in the form of growing online payment fraud, and that the cost of fraud would not be reduced without implementation of 3D Secure.It also argued that the cost of reconfiguring merchant websites to adopt 3D Secure would be offset by a transfer of liability for future fraud losses to payment card issuers.The ACCC took a different view to the Reserve Bank, which said in its submission that an industry approach to online payment security would overcome the co-ordination and consumer education problems that have held back voluntary, independent adoption of security systems to date.The RBA did also raise the competition issues involved, saying the 3D Secure initiative relied on the use of proprietary technology owned by one of the parties to the proposed initiative.