Stopping the Post-EMV Surge in Online Fraud

Stopping the Post-EMV Surge in Online Fraud

The predicted increase in online fraud in the U.S. has arrived with the adoption of chip card technology (also known as EMV).

According to data from ACI Worldwide, while online transactions grew in the U.S. by 12 percent, there was a 43 percent increase in online fraud. This spike has been expected, given what was seen in the countries that have already implemented EMV. They experienced a significant reduction in counterfeit card fraud, while online fraud spiked dramatically.

The end of 2016 saw nearly 1.81 million merchants in the U.S. switch to accepting EMV chip cards, more than double the year previous.  Experts therefore expect the online fraud figure to continue to rise as even more offline retailers adopt EMV for use in point-of-sale (POS) transactions. As fraudsters are shut out of the in-store channel by EMV, they turn their attention to the online one. Thieves are becomingly increasingly sophisticated in the area, now using fully automated bots to place fraudulent orders using stolen customer data.

Such personal data is now in abundant supply on the black market due to wide-scale data breaches at large retailers and financial institutions. According to Javelin, the number of identity-theft victims rose to a record 15.4 million last year from 13.1 million in 2015. The use of automated botnets to commit online fraud in the U.S. increased by 47% between Q3 2015 and Q2 2016 according to PYMNTS.com. That figure is even higher for orders involving luxury goods—an increase of 87% during the same period.

To fend off these attacks, businesses continue to seek technology to help them stem the tide. Juniper predicts online retailers and financial institutions will increase spending by 30 percent on fraud prevention solutions, hitting $9.2 billion annually by 2020.

Reducing Online Fraud Without Friction

The greatest asset in online payment—the high speed and volume it enables—is also potentially its weakest point. It’s clear the prevention of fraud requires a more thorough review of transactions before they are processed but, at the same time, adding friction to slow down and reduce purchasing volume is not an acceptable solution for either businesses or consumers.

Retailers and other enterprises need the means to protect those transactions from fraud, while still maintaining a positive customer experience. Fortunately, there is a method of tightening security in online purchases that does not introduce friction or otherwise slow down transactions. Through the use of software, retailers can collect information from the device being used to place an order to better assess transaction riskiness and identify potential fraudsters. By noting geographical and time attributes, plug-ins, IP addresses, and other relevant information contained within the device, merchants can better uncover high-risk indicators and establish the device’s trustworthiness.

Armed with this information, online merchants can more precisely identify the bots and other fraudulent techniques and prevent fraudsters from placing orders while continuing to deliver outstanding service to their genuine customers. No friction needs to be added to the ordering process at all. In this system, retailers get the best of both worlds—fast transactions that effectively lock out the fraudsters.

With the widespread adoption of EMV in the U.S., the surge in online fraud is coming. Fortunately, the solution to it is out there and it is only up to retailers to seize it.  


About the Author

Michael Lynch is the Chief Strategy Officer at InAuth.

Featured

  • Freedom of Choice

    In today's security landscape, we are witnessing a fundamental transformation in how organizations manage digital evidence. Law enforcement agencies, campus security teams, and large facility operators face increasingly complex challenges with expanding video data, tightening budget constraints and inflexible systems that limit innovation. Read Now

  • Accelerating a Pathway

    There is a new trend touting the transformational qualities of AI’s ability to deliver actionable data and predictive analysis that in many instances, seems to be a bit of an overpromise. The reality is that very few solutions in the cyber-physical security (CPS) space live up to this high expectation with the one exception being the new generation of Physical Identity and Access Management (PIAM) software – herein recategorized as PIAM+. Read Now

  • Protecting Your Zones

    It is game day. You can feel the crowd’s energy. In the parking lot. At the gate. In the stadium. On the concourse. Fans are eager to party. Food and merchandise vendors ready themselves for the rush. Read Now

  • Street Smarts

    The ongoing acceptance of AI and advanced data analytics has allowed surveillance camera technology to shift from being a tactical tool to a strategic business solution. Combining traditional surveillance technology with AI-based data-driven insights can streamline transportation systems, enhance traffic management, improve situational awareness, optimize resource allocation and streamline emergency response procedures. Read Now

  • Midtown Manhattan Shooting Kills 4, Including NYPD Officer

    Four people were killed, including a NYPD officer, in a midtown Manhattan shooting on Monday. That’s according to CNN. Read Now

New Products

  • Luma x20

    Luma x20

    Snap One has announced its popular Luma x20 family of surveillance products now offers even greater security and privacy for home and business owners across the globe by giving them full control over integrators’ system access to view live and recorded video. According to Snap One Product Manager Derek Webb, the new “customer handoff” feature provides enhanced user control after initial installation, allowing the owners to have total privacy while also making it easy to reinstate integrator access when maintenance or assistance is required. This new feature is now available to all Luma x20 users globally. “The Luma x20 family of surveillance solutions provides excellent image and audio capture, and with the new customer handoff feature, it now offers absolute privacy for camera feeds and recordings,” Webb said. “With notifications and integrator access controlled through the powerful OvrC remote system management platform, it’s easy for integrators to give their clients full control of their footage and then to get temporary access from the client for any troubleshooting needs.”

  • Mobile Safe Shield

    Mobile Safe Shield

    SafeWood Designs, Inc., a manufacturer of patented bullet resistant products, is excited to announce the launch of the Mobile Safe Shield. The Mobile Safe Shield is a moveable bullet resistant shield that provides protection in the event of an assailant and supplies cover in the event of an active shooter. With a heavy-duty steel frame, quality castor wheels, and bullet resistant core, the Mobile Safe Shield is a perfect addition to any guard station, security desks, courthouses, police stations, schools, office spaces and more. The Mobile Safe Shield is incredibly customizable. Bullet resistant materials are available in UL 752 Levels 1 through 8 and include glass, white board, tack board, veneer, and plastic laminate. Flexibility in bullet resistant materials allows for the Mobile Safe Shield to blend more with current interior décor for a seamless design aesthetic. Optional custom paint colors are also available for the steel frame.

  • QCS7230 System-on-Chip (SoC)

    QCS7230 System-on-Chip (SoC)

    The latest Qualcomm® Vision Intelligence Platform offers next-generation smart camera IoT solutions to improve safety and security across enterprises, cities and spaces. The Vision Intelligence Platform was expanded in March 2022 with the introduction of the QCS7230 System-on-Chip (SoC), which delivers superior artificial intelligence (AI) inferencing at the edge.