Advances in technology often signal risk, as fraudsters find ways to take advantage of new developments. Fraudsters navigate the many new avenues that technology opens up just as easily to them as businesses and consumers. In this way, greater profit potential and increased efficiency achieved through the adoption of technology within your organization can be a double-edged sword.
Protecting your business against fraud as it adapts to technological changes and emerging market trends is about keeping your security tools as up-to-date as the rest of your IT infrastructure. Here are four payment systems and the risks that go with them.
1. Credit cards
Credit cards are widely accepted around the world and are used in 41% of all transactions. They can be used to process payments online and in person. Credit cards generally give consumers access to a fixed line of credit that they can pay off, in most cases, over time. This payment method is also quite flexible, with built-in support for recurring payments, refunds, rewards, and more.
Unfortunately, accepting credit card payments from your customers, especially when their cards are not physically present, can open the door to fraudulent charges or chargebacks that increase by 20% each year, of which 86% are due to friendly frauds. Stolen credit card data is readily available and without the cardholder’s identity document (for example, a driver’s license) it is difficult to ensure that the person presenting the credit card is the one who owns the card. In excess, these fraudulent chargebacks can put a business on the MATCH list, where it will not be able to fully process transactions.
2. Bank debits
Bank debits often come in the form of a debit card and allow customers to withdraw funds directly from their bank account as needed. In the United States, these take the form of an automated clearinghouse or “ACH” debit.
This payment option allows fraudsters to directly access the accounts of their victims. Debit cards, like credit cards, use a transaction network that is limited to card numbers, names and codes (visible on cards) for verification purposes. As is the case with a credit card, the card issuer cannot always tell if a transaction is fraudulent (typically they look at transaction data and not identity data to determine fraud), and it is up to the cardholder to find and dispute the charge. .
3. Buy now, pay later
Buy Now, Pay Later solutions allow consumers to make purchases with open lines of credit that they can repay in fixed installments. Companies such as Paypal and Afterpay provide such services, the former offering merchants the same rates as their other payment processing services. Consumers say they are 64% more likely to buy from companies that offer this payment option.
A fraudulent approach will be to take back a legitimate user and use it for their own purposes, or, through a false identity, to create their own account. Using a fake ID, stolen information (including stolen login credentials), or a synthetic ID (created from multiple identities) are typical ways for a fraudster to get started. From there, they could try to get away with a large transaction or smaller transactions that go unnoticed by consumers and businesses. However, in all cases, the key is identity.
4. Better security
Scammers are always looking for an advantage. As more and more business takes place online, companies feel they are caught between user experience and security. A better user experience means more customers and more loyal customers. Better security means more effective ways to eliminate fraudsters. Some believe, however, that more security means a worse experience and fewer customers. But, this is not necessarily the case.
IDs are a great way to understand who you are working with. However, many believe that effective validation of an ID takes a long time.
Intellicheck will validate the ID and the person presenting it with an accuracy of 99%, compared to the industry average of 60% or less. Intellicheck’s high precision means you can start a relationship knowing you can trust the person you are working with. We offer a variety of solutions that you can activate and use, as well as API-based solutions that can integrate tightly with your systems and experience. We work with 5 of the largest financial institutions and credit card issuers as well as thousands of other companies. Intellicheck is the best first step. Contact us to see how we can help you.
IntelliCheck Inc. published this content on September 14, 2021 and is solely responsible for the information it contains. Distributed by Public, unedited and unmodified, on September 14, 2021 04:51:08 PM UTC.