It’s unfortunate that credit card fraud and identity theft or other hacks have become so common that we tend to shrug when we hear another example on the news. We use credit cards, accepting the risk that we might get hacked, and can pretty much list offhand the necessary steps we should be taking if we find out that someone has gotten ahold of our credit card information. Most businesses accept a variety of credit cards, various electronic payments from our phones, and that trend is sure to continue. This does mean, however, that we’re continually putting ourselves at risk for fraud or hacking. The United States spends a little under $8 billion every year, trying to combat or recoup credit card fraud losses. However, there are methods that businesses can take to help put a stop to credit card fraud, in addition to consumers being more aware, and pushing their credit card companies to create more secure cards.
How Serious is the Problem?
The more credit cards we use digitally — from our computers or other devices — the higher the risk for credit card fraud we are. Most businesses can’t veto every card not present transaction or ask for identification, since so much purchasing is now done online, and the person is obviously not able to present the physical card to the business.
Every thirty seconds, over $900,000 is spent around the world on online purchases and an extra $275,000 is spent on purchases made from our cell phones. Cyber Monday has been steadily climbing in retail value over the years. In 2012, Cyber Monday drove almost $1,500 million in sales and it’s been steadily increasing every year.
However, on the sobering side, in 2014, over $16 billion was lost globally thanks to payment card fraud. By 2020, that amount is estimated to be over $35 billion. This is clearly a problem that’s not going away. Even as technology advances for consumers and businesses to protect themselves from hackers, the hackers’ technology and methods also increases. In 2014, there 1,540 data breaches all over the world, ending with over one billion data records breached.
One basic way to stay safe is to be smart about the kind of transactions you make. Card not present transactions do put you more at risk, so make sure you’re only purchasing from reputable websites. Don’t be lazy about your PIN number or obvious when entering it — that’s another easy way to have your information readily stolen.
How Can Businesses Do Their Part In Helping Cut Down on Credit Card Fraud?
It of course looks bad for merchants if they don’t have secure payment or secure payment systems — the fraud hurts them just as much, since consumers might not trust them as much. When chargebacks occur, they pay the price.
Cut Down on Card Not Present Transactions
This can be a tough one, considering how many purchases are made online. But they do present a risk for businesses. Card not present transactions are when a credit card can’t be physically viewed and verified by the merchant. The identity of the purchaser also can’t be verified, which makes it easier for hackers to get away with fraudulent purchases.
Some credit card companies have worked out a method to help safeguard consumers or at least nip fraudulent activity in the bud, by sending the consumer a verification email every time a purchase is made online.
Adding Chip Technology!
Almost every vendor should have card processing systems that can process the new chip technology. The chip system is more secure than the swipe system, since it encrypts your data in a way that makes it harder for hackers to weasel their way into.
Ask for ID
If an expensive in-store purchase seems suspicious, requiring ID before the card is swiped or inserted is a great way to make sure the cardholder is who they say they are.
It’s important for cardholders and merchants alike to cooperate and work together to cut down on credit card fraud and create a safer space for everyone.