Card not present fraud to cost retailers $130bn
Written by Peter Walker
Retailers are set to lose around $130 billion in digital card not present fraud between 2018 and 2023.
Juniper Research highlighted that increasingly complex approaches by fraudsters, alongside retailers’ inertia in adapting to new fraud prevention requirements, would be key factors behind the increases in fraud transaction value.
Card not present fraud is a type of scam in which the customer does not physically present the card to the merchant during the fraudulent transaction - usually during online or over the phone transactions.
The consultancy’s analysis claimed that as cybercriminals seek to monetise their knowledge to a wider, less tech-savvy audience, complex cross-channel fraud will become the ‘new normal’, with retailers ill-prepared to fight it.
Established point of sale (PoS) vendors such as Verifone and Ingenico will therefore increasingly look to mobile PoS as an area for future growth, expanding their market reach to previously unaddressed markets, according to Juniper.
“A layered solution naturally helps directly preventing fraud, but it also offers major gains in terms of recovering potentially lost revenue through false positives,” explained research author Steffen Sorrell. “This is something about which retailers remain undereducated, and has allowed fraudsters to capitalise on relatively low fraud detection and prevention spend.”
Juniper found that the perception of fraud detection and prevention return on investment on the part of retailers is, in turn, hampering global spending growth on security.
It therefore anticipates that digital payment players will spend $9.6 billion annually on security solutions in 2023, although the bulk of growth over the forecast period is likely to be driven by financial institutions and payment service providers.
This is due to awareness of fraud detection and prevention benefits, as well as a requirement to deal with challenges such as Open Banking systems and instant payment mechanisms.