Cybercriminals always find the path of least resistance. When it was easy to place a skimmer on a card reader at a merchant, and steal card information from a card’s magnetic strip, that’s what they did. In the new EMV landscape, where cards are equipped with a chip, it has become almost impossible to commit fraud at the point-of-sale, so these cybercriminals have migrated to the digital channel. Since credit cards have become increasingly secure in the digital channel, they’ve started to look for another easy way to commit crime, and they’ve found it through alternative payments.
Consumers are excited about different alternative payment methods for several reasons. They can make their lives easier, by making it easier to pay their friends, merchants, or their bank. But there are lingering concerns over the security of alternative payment methods, and how they might put consumers at risk.
One of the reasons that alternative payments are a popular target for fraudsters is that they are currently experiencing unprecedented growth in the digital payments industry. Both consumers and merchants are adopting different alternative payment methods, which has spurred growth. In 2017, mobile wallet transaction volume is expected to grow to $1.35 trillion, which would be a 32 percent increase from 2016, according to Juniper Research. Generally, when there is unexpected, fast growth in this industry, security isn't there in the short-term, which makes these payment methods attractive to fraudsters.
Often, a business that offers an alternative payment option will put more time and effort into ensuring the consumer experience is quick and seamless, than into protecting their alternative payment option from fraud. It’s also likely that they don’t know how much fraud can hamper their business.
Fortunately, Cardinal can help alleviate some of these security concerns. With Cardinal Consumer Authentication (CCA), merchants that offer alternative payment methods can mitigate fraud risks, while maintaining an easy, frictionless consumer experience. By implementing CCA into their alternative payment methods, these merchants can ensure that all their consumers are, in fact, legitimate consumers since they will go through authentication before completing the purchase. With One Connection to Cardinal, we can Drive your Digital Commerce.