Device intelligence provider iovation is predicting a strong increase in card-not-present fraud during one of the busiest shopping periods of the year.
With the shift to EMV-chipped cards and the growing popularity of contactless payment methods, the company fears increased fraud from Black Friday to Cyber Monday compared with past years.
“Leading into last year’s holiday shopping season, physical retailers began adopting EMV cards to protect their card-present transactions,” iovation CTO Scott Waddell said. “A by-product of this switch is that fraudsters are adapting their techniques from card-present fraud to online schemes since chip technology makes the cards nearly impossible to counterfeit.
“Now, more than a year later, the bad guys have had plenty of time to adapt their tactics and are in full swing with their online assault.”
Research results released earlier this year from iovation and research/advisory firm Aite Group showed that as more merchants become EMV-capable, counterfeit fraud will plummet from $4.5 billion to less than $1 billion by decade’s end. The bad news is card-not-present fraud loss will rise to $7.2 billion. Online credit card fraud frequency began to rise in October 2015 when merchants not using EMV chip cards feared additional liability for fraudulent transactions.
“Since the U.S. EMV shift, we have expected to see a rise in CNP fraud, as this pattern has occurred in other countries adopting the chip cards,” Aite Group research director Julie Conroy said. “Moving into the 2016 shopping season where retail transactions traditionally increase and so does fraud, online retailers are on notice to mitigate the increased risk.”
iovation predicts that the percentage of online retail transactions from Black Friday to Cyber Monday completed via mobile phones and tablets will hit 52 percent this year. This continues an upward trend:
The annual growth in mobile retail transactions
○ 44 percent of all online transactions were made from a mobile device in 2015
○ 32 percent of all online transactions were made from a mobile device in 2014
○ 20 percent of all online transactions were made from a mobile device in 2013
Mobile retail transaction increases over Black Friday to Cyber Monday
○ 47 percent of all online transactions were made from a mobile device during the period in 2015
○ 37 percent of all online transactions were made from a mobile device during the period in 2014
○ 31 percent of all online transactions were made from a mobile device during the period in 2013
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