Everything is going digital these days — there were some people who claimed awhile back that within a few years, cash and checks will become obsolete, and everything will be conducted through swiping plastic. And now, even credit cards are giving way to simply tapping your phone at the register. However, credit cards are still one of the major methods of payments for businesses and individuals alike. And hackers are becoming more interested in how they can extort our reliance on credit cards and make money. Credit card fraud is a major concern for businesses and regular consumers, especially since it costs the United States a little under $8 billion annually. However, it’s not just hackers who are responsible for carrying out credit card fraud — it can be done in person as well. So what do businesses (and consumers) have to know to keep from being victims of credit card fraud?
A Growing Market Impacted By Credit Card Fraud
We can buy almost anything with the click of a button these days. Every 30 seconds, over $900,000 is made internationally, thanks to computer sales, and almost $275,000 in revenue is produced from mobile purchases. As we continue to use our phones for everything, analysts predict that online mobile sales will continue to increase quickly, especially when we can easily pay using our devices. In 2012, almost $1,500 million was spent by consumers during Cyber Monday and that number has only been increasing every year. Besides this, the online market is savvy and offers incentives to online buyers. If consumers spend X amount of dollars, they often get free shipping or a bulk discount, so they’re incentivized to spend more. Statista reported that in 2015, the average online shopper spent almost $80 per each order.
However, consumers aren’t the only ones sitting up and taking notice of this burgeoning market. Certain hacker groups and those looking to make a little extra are also looking for ways to score big. In 2014, just over $16 billion was lost worldwide because of credit card fraud and it’s predicted that by 2020, those losses are supposed to hit almost $36 billion! Perhaps, even scarier is the fact that in 2014, over 1,500 data breaches were conducted internationally and more than one billion data records were compromised. Additionally, on-the-ground tactics like a card not present transaction or badly guarded PIN numbers and passwords can also wreak havoc.
What Is a Card Not Present Transaction? And How Else Is Credit Card Fraud Carried Out?
A card not present transaction occurs when the merchant can’t physically examine the card when an order is placed — the cardholder does not or cannot actually present the card — which means that they can’t verify that the correct cardholder is the one placing the order. A card not present transaction usually occurs via mail-order, telephone, or Internet transactions and is a major vehicle for credit card debt. Employees or other people who have access to the card can also copy important information and in some cases, credit card is carried out when a person loses or has their credit card stolen.
On the digital side, hackers can get into otherwise secure accounts and steal important information, such as the PAN (primary account number), the expiration date, cardholder name, and verification number. Phishing and a BIN attack are other digital ways for hackers to obtain your credit card information.
How Do I Protect Myself From Credit Card Fraud?
Most merchants are now aware of fraud risk and have implemented secure payment systems, which is a good method of protection against credit card fraud. However, making sure your card has the new chip technology, which helps encrypt your data and make it harder to hack is another good method you can take to help protect yourself. Tracking your credit card regularly and carefully and making sure no odd purchases are being made can often nip credit card fraud in the bud as well. Be choosy about who you give your payment info out to and make sure you’re onnly making purchases with trusted vendors — foreign orders can often be a trap.