Current trends indicate that consumers in the U.S. will spend nearly $370 billion online by 2017. However, even though business may be booming, new research also indicates that the dangers of online card not present transactions (CNP) will increase.
As many as eight million consumers are likely to experience both a credit card breach as well as identity fraud within the same year by 2018, according to Javelin Strategy and Research. This is just one of the many startling findings of a recent study that also predicted instances of point of sale (POS) credit card fraud would decrease while CNP fraud is steadily rising.
Based on the behaviors and types of fraud experienced in a survey of 5,000 respondents, the 2015 Data Breach Fraud Impact Report projected four years of new account fraud, account takeover, as well as fraud linked to data breaches. A jump in CNP fraud losses from $10 billion in 2014 to $19 billion in 2018, a decline in POS fraud by $1 billion from $6 billion in 2014 to $5 billion in 2018, and a sharp 60% increase in account take over and new account fraud were among the predictions found in the report.
As director of fraud and security for Javelin Strategy and and Research, Al Pascual warns that financial institutions “will need to improve authentication across both the mobile and call-center channels, and they should be making those investments now before it is too late,” in an effort to reduce the chances fraud.
However, in a world where smartphones are considered “outdated” in as little as six months after their release, nothing remains the same for very long. Despite the best efforts of banks and credit card issuers, data hackers have adapted accordingly, adopting new ways of committing fraud and taking advantage of the chinks in modern payment systems.