There’s been a lot in the news recently about credit card fraud and identities being stolen. In fact, so much so, that chip technology was finally implemented in major credit cards in America just recently. Americans are more and more worried that the transactions they make could eventually lead to fraud or identity theft. However, at the same time, online purchases are burgeoning like never before. A Forrester Research survey conducted in 2014 predicted that in 2017, online retail sales will go up to $370 billion, as compared to $231 billion in 2012. Six out of ten customers are worried about credit card or debit card fraud when they make those purchases online — so how are retailers and credit card companies going to reconcile these two things?
What Do the Online Retail Numbers Look Like?
Globally, e-commerce sales produce over $925,000 every 30 seconds from sales made from desktop computers and over $250,000 in sales conducted through mobile phones. And it’s not just millennials fueling the online shopping trend — two-thirds of Americans who over the age of 50 do their online shopping, according to a study done in 2014. Statista also predicted that by year’s end of 2015, over 1 billion people globally would conduct purchases of goods and services using an online interface. Furthermore, in 2013, eMarketer reported that almost 75% of Americans had made at least one buy online that year. Lastly, the Juniper Research Institution reported in 2015 that buying materials online (either through a desktop or mobile device) will continue to increase in usage and are predicted to hit 125 billion transactions annually by 2018.
What’s the Catch With Credit Card and Debit Card Fraud?
Online sales however, also open up an increased risk to for credit and debit card fraud. In 2013, almost $5 trillion was spent with credit and debit cards. And as of the end of March 2013, almost 300 million Visa cards were in use in the United States and over 500 million Visa cards in use globally. Secure payment wasn’t guaranteed as hackers became more proficient. According to a report from July of 2015, credit card fraud losses hit almost $17 billion in 2014, up almost 20% from 2013. (This includes losses from card issuers, merchants, and credit card users.) For the fourth year (in a row!) the money lost because of fraud was actually higher than credit card volume.
What’s Being Done to Fix It?
Increased security for transactions is being seen with the new chip technology. Instead of swiping your card, you insert it, and the chip inside has dynamic authentication, which makes it harder for hackers to copy the data needed to hack the credit card itself. It also wards off counterfeit fraud — when the card is inserted and the chip is read, the point-of-sale machine is able to verify that this is an actual card. Major companies are tightening their security to try and reduce data breaches as well.
WIth more and more businesses on high alerts and measures being taken to make credit and debit cards being made more secure, hopefully there will be a reduction in fraud and losses in years to come.