Bank card fraud has been a growing issue since people began regularly using credit and debit cards to make payments. While the introduction of chip technology has helped reduce bank card fraud in Card Present Transactions, it is online payments (which do not require a point of sale device – POSless) that are at the biggest risk of bank card fraud.
Visa published an article on the 28th of May 2019 which described how the introduction of chip technology has helped to reduce instances of bank card fraud by as much as 76%. This is not only good news for banks and the card industry, but it also bodes well for consumers and merchants alike.
The real issue arises, however, when one looks at fraud trends concerning Card Not Present (CNP) transactions. CNP transactions have seen a meteoric rise in popularity in recent years as more and more people shop online; and, as more people make online (CNP) transactions, so the number of card fraud incidents has increased. In fact, according to the Global Banking and Finance review, as of 2018, as many as 123 million British people had fallen victim to card fraud as a result of making CNP transactions.
A report published by Juniper Research in 2018 estimates that losses due to card fraud for the next 5 years will reach $130 billion dollars. This is a massive amount of money, almost as much as the GDP of a country like Hungary. The most frightening part of these statistics, however, is that this is accepted and budgeted for by companies as an inevitable outcome. The financial cost, however, pales in comparison to the reputational damage that the FSP (Financial Service Provider) will inevitably face.
The card companies and the banks continue to search for ways of making the current CNP environment more secure, an undertaking that requires spending vast sums of money on research and development, which has led to the development of CNP with 3DS and 3DS 2.0. This is of course very necessary, but the industry must also look at taking a different approach: they have done fantastic work preventing fraud in the Card Present environment by forcing merchants to comply with a universal standard, so why not mandate that no more Card Not Present transactions be allowed? This will have an immediate and significant impact on bank card fraud, at nominal cost to the industry, by ensuring that card details can no longer be entered and stored anywhere on the internet. The amount of card data available on the dark web continues to increase with every passing year, a trend that urgently needs to be stopped in its tracks.
Before every online retailer in the world protests this action – there is a way to do this using the contactless card and the EMVco (Europay Mastercard and Visa) standard. Every transaction that a customer does will require that they tap their card to the back of their phone and enter their bank PIN. This will ensure that the transaction is secure, authenticated and verified in a seamless manner, using a method that every customer in the word is familiar with. Furthermore, this method carries full– PCI DSS accreditation – from the industry.
This is the vision that we at WIZZIT hold, a vision where we live in a Card Present only world, which in turn ensures that all our transactions are secure and minimises the card fraud taking place across the globe.
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