Executives Explore Disruptions in Fraud Trends, Securing Online Channels and Mobility Payments in Transit
The payments industry is seeing major disruptions in fraud trends, securing online channels, the consumer shopping experience and mobility payments in transit, industry experts shared last week at Secure Technology Alliance’s 13th Annual Payments Summit. The Summit, held jointly with the U.S. Payments Forum Member Meeting, brought together hundreds of industry experts looking to find new ways to overcome challenges impacting the adoption, security and usability of emerging and developing payments technologies.
Changing fraud trends and a focus on securing online channels
With counterfeit card fraud down 87% for merchants that have implemented chip technology, many in the industry are now shifting focus from protecting card data to protecting personally identifiable information (PII) in the digital space. This is because PII is poorly protected, often with insecure methods such as passwords, and can be easily monetized. This is especially a concern to consumers when linked to payment data.
Synthetic identity, where a new identity is created with false information, and account takeover are among the fastest-growing types of fraud today. One speaker shared that loss as a result of synthetic identity fraud costs more than $10,000 on average per account for financial institutions – more than double the average loss for an account due to other types of fraud.
Another speaker highlighted false declines of payment transactions as an additional challenge, attributing this to fear of fraud and limited available transaction data. False declines negatively impact the consumer experience, often causing them to shift preference to a different card or store for future purchases. EMV 3-D Secure (EMV 3DS) was cited as a possible solution as it provides more than 135 new data fields for merchants and issuers to help with risk decisioning while providing a seamless experience for the customer.
In addition to EMV 3DS, additional online authentication tools including FIDO authentication, biometrics and others are frequently being used to improve the state of online payments security. While many within the industry have questioned which solution will become prominent, speakers shared that these technologies are largely complementary – each one a piece of the online authentication puzzle.
Consumer experience is a key component to the future of payments
Consumer experience was another leading theme throughout the event, with discussions ranging from experiences in stores to online.
Speakers highlighted contactless payments as a leading technology to improve the customer experience in stores. Data shared from Phoenix Marketing International showed awareness of contactless cards increased from 81% in Q2 2019 to 84% in Q4 2019, the number of consumers with a contactless card increased from 23% to 26% last year, and 34% of contactless card users elected to pay with contactless within the past month.