Fraudsters are typically one step ahead of those who try to prevent fraud—largely due to the nature of fraud. As technology develops, fraudsters develop new methods to exploit weaknesses in payment systems. Once these methods become known, people begin to work on fixes or patches to counter the exploit. However, there is a delay involved during which fraudsters can exploit the recognized vulnerabilities.
Despite apparently being at a disadvantage, fraud preventers have developed staunch payment technologies that are largely resistant to exploits. This has led to a decrease in contactless payment fraud, but the threat hasn’t vanished. Here are two kinds of contactless payment fraud and how to avoid them.
Of the two kinds of fraud presented here, card-not-present fraud is more common. This occurs when the cardholder is not physically present during the transaction. This is a fairly ordinary payment situation due to e-commerce and online payments, which comprises the bulk of payments without cardholder presence. Other payment situations include mail orders and over-the-phone payments.
This kind of fraud is easy to execute because the retailer can’t verify the cardholder’s identity, see if the card is genuine, etc. For instance, suppose someone orders a book for $50 from a store, gives their card information, and picks up the book later that day.
In this situation, the retailer doesn’t realize that this card was stolen or that the person ordering the book was a fraudster. A simple way to counter this is to ask the customer to pay in-store using the chip-and-pin authentication when they pick up the book.
This is where security improvements in contactless payment technologies shine through. Card-present fraud occurs when the fraudster is physically present and has stolen a credit card or payment credentials. Signs of this kind of fraud typically include bulk buying without care for the price, malfunctioning magnetic stripe or EMV chip, etc.
Countering this kind of fraud is far easier than card-not-present fraud. Firstly, ask the customer to show some other ID if you suspect the card they’re using has been stolen. Secondly, don’t let customers distract cashiers or rush the payment. Thirdly, and perhaps most importantly, make sure your payment terminals are secure.
If you’re looking for secure payment hardware and software, get in touch with UIC. They offer an assortment of secure contactless payment solutions for all payment methods. The more reliable your payment solutions, the more quickly you can tell that something is wrong when a payment doesn’t process. Contact them to secure your payment services and solutions.