Paying a PoS*, USA? Your chip-and-PIN means your money's safer...
... except not online. Sorry America
The value of online fraudulent transactions is expected to reach $25.6bn by 2020, up from $10.7bn last year, according to a new study from industry analysts Juniper Research. The researchers predict that by the end of the decade, $4 in every $1,000 of online payments will be fraudulent.
Juniper’s study, Online Payment Fraud: Key Vertical Strategies & Management 2016-2020, found that the implementation of chip-and-PIN services at PoS (Point of Sale) locations in the United States is likely to drive fraud online. The report goes on to identify three hot areas for online fraud: eRetail (65 per cent of fraud by value in 2020 - $16.6bn); banking (27 per cent - $6.9bn); and airline ticketing (six per cent - $1.5bn).
Of the three sectors, online retail is particularly susceptible to fraud. Retail fraud is increasing at twice that of banking and seven times that of airline ticketing. Two key areas of the retail business most susceptible to fraud include "buy-online, pay in-store" and electronic gift cards.
The continuing migration to online and mobile shopping of both digital and physical goods will provide a further incentive for fraudsters to focus their attention on these channels.
Juniper is pessimistic about the ultimate success of fashionable anti-fraud counter-measures. While banks are able to counter online banking fraud by deploying new technologies such as 3D-Secure and device fingerprinting, these measures “often only provide temporary respite” as fraudsters quickly find new ways to defraud. Similarly, fraud detection and prevention systems in the airline industry has only succeeded in pushing fraudsters towards hunting other weak spots in the system.
“A few larger airlines claim that they have reduced eTicket sales fraud to less than 0.1 per cent or 10 basis points of revenues” said research author Gareth Owen. “When thwarted, however, fraudsters quickly move on to easier pickings such as frequent flyer fraud, for example.” ®
*Point of Sale machine. Why, what did you think we meant?