As the transition to EMV makes card-present, in-store transactions more secure, fraudsters are getting more creative. They have discovered a weak point in the system: increasingly popular buy online/pick up in-store offerings. ACI Worldwide projects that attempted fraud rates for the process will increase 28% this holiday season compared to last year.
Some may ask why there is particular concern with buy online/pick up in-store services. Simply put, retailers do not require consumers to re-run their payment cards when they pick up products in store, making this channel an attractive theft option for fraudsters.
Digital downloads such as virtual gift cards or e-gifts have the highest fraud rate of any delivery method at 9.55%, followed by next day/overnight shipped purchases at 6.57%, international orders (2.38%) and buy online/pick up in-store (2.15%)
Key Trends To Watch:
Overall, there has been a significant increase in card-not-present fraud compared to last year:
One out of every 86 transactions is a fraudulent attempt, compared to one out of every 114 in 2014, an increase of 30%. This increase can be attributed to the growing popularity of using mobile devices for transactions;
Fraud attempt rates as measured by value have increased by 33% in this period;
The shift to EMV chip cards forces retailers to further secure their card-present transactions, leaving potential swindlers to make more fraudulent attempts on e-Commerce sites;
Additionally, retailers must keep an eye out for more frequent fraudulent attempts, even as the average ticket value (ATV) of each would-be crime has declined, from $282 last year to $273 this year. Lower shipment costs, decreasing goods costs and an overabundance of coupons all contribute to a lower ATV.