The state of fraud today
Fraud is always going to be a big issue for merchants who take card payments. With the rapid development of new payment channels and consumer-led advances, particularly online, fraud management and security can sometimes be a step behind. This lag has opened up more opportunities for criminals to commit fraud.
Today’s fraud is cleaner, more sophisticated and almost undetectable. Fraudsters obtain the cardholder information required to penetrate payment systems and disguise themselves as genuine customers. These orders appear clean in your system, with nothing suspicious on the surface, typically looking like 99% of your everyday, legitimate orders.
The social media revolution is also changing the rules of engagement, with businesses now facing even more risks. This is exposing them to reputational damage from negative interactions and the potential disclosure of sensitive information.
But the industry is not just sitting back and has introduced a comprehensive range of industry initiatives, including:
the roll-out of updated chip and PIN cards in the UK and abroad, particularly in North America
raising retailer awareness of how to protect themselves from attack using Fraud Screening solutions such as ReD or Cybersource
greater sign-up of 3-D Secure services such as MasterCard SecureCode and Verified by Visa
greater use of fraud detection tools by banks and retailers
With scheme-wide initiatives working to give businesses better protection for card payments, fraudsters have shifted their attention to other payment methods such as ecommerce, mail order and telephone orders (MOTO) fraud.