Here’s Why.
Infographic
Here’s Why.
A card-not-present (CNP) transaction happens when the customer is not physically present to show their credit card at the time of purchase, allowing fraudsters to steal credit card information and then use this information to make fraudulent purchases.
CNP fraud does occur in transactions in which the credit card is not physically presented, causing loss of product, shipping expenses, fees and penalties, and damage to the reputation of merchants.
CNP fraud does occur in transactions in which the credit card is not physically presented, causing loss of product, shipping expenses, fees and penalties, and damage to the reputation of merchants.
Ecommerce businesses are offering more payments options, making it easier for customers to purchase online. But fraudsters are keeping up with these changes:
CNP fraud rates are increasing, and businesses are having to bear the brunt of these losses.
Below, we explore some of the data behind the rise in CNP fraud, so online businesses can better understand why these changes are occurring and better protect themselves!
Sources: CardNotPresent.com, Forbes
In 2021, the average number of cyberattacks and data breaches increased by 15.1% from the year before. With so much sensitive data readily available, and given the difficulty businesses face when attempting to validate a consumer’s identity online, ecommerce provides fraudsters with the perfect opportunity for theft.
The tighter security of EMV (chip) cards has decreased the rate of in-person credit card fraud. As a result, fraudsters have migrated to other, less secure commerce channels (like online sales).
Source: Merchant Fraud Journal
The pandemic increased ecommerce sales traffic five times as much as industry experts anticipated. This surge caused an influx of new online customers who have less experience and online sophistication to recognize phishing attacks and malware. The result is more exposure to online fraud.
Fraudsters have found new ways to perpetrate CNP fraud, including account takeover (ATO), synthetic identity fraud, friendly fraud and gift card fraud. All of these tactics are difficult to detect and even harder to prevent without expert help.
Sources: DIgital Commerce
BOPIS and curbside pickup order volume grew by more than 500% from March through June 2020. Retailers are bending over backward to meet this demand, making this service as quick and easy as possible.
Customers choosing this option typically don’t have to provide a shipping address, which makes it harder for the business to validate the transaction at the point of sale. Additionally, upon pickup, many stores don’t require customers to present an ID or to re-swipe the credit card used for the purchase. This lack of security exposes businesses to higher CNP fraud levels.