Study: Online Fraud Is About to Kick Into High Gear
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As retailers and consumers prepare for the holiday shopping season, attempts by criminals to steal payment card information to commit fraud online are likely to rise, according to new research by ACI Worldwide.
The move by U.S. merchants and card issuers to switch to more secure chip cards for in-store purchases this year is likely to increase fraudulent attempts on transactions online.
The ACI research showed fraud rates by volume for transactions that don't involve physically swiping a card have increased in 2015, with one out of every 86 transactions a fraudulent attempt compared with one out of 114 transactions in 2014.
Fraud attempt rates by volume have increased by 30 percent compared with 2014 as consumers shop with more devices online and card issuers are slower to shut down accounts after fraudulent activity.
"When it comes to fraud, 2015 is likely among the riskiest season retailers have ever seen," said Mike Braatz, senior vice president, Payments Risk Management, ACI Worldwide. "It is critical that they prepare for a significant uptick in fraud, particularly within e-commerce channels," he said.
ACI, which delivers electronic banking and payment solutions for financial institutions, retailers and processors around the world, said its data is based on an analysis of hundreds of millions of transactions from large global retailers between January and July 2015 compared with the same period in 2014.
The research also forecast a spike in buy online and pick up in-store attempted fraud rates.
That is expected to increase by 28 percent this holiday season as a result of chip-cards being deployed within stores and as retailers do not require consumers to re-run cards when they pick up products ordered online in store.
(Reporting by Nandita Bose in Chicago; Editing by Mark Potter)