Cyber Attacks On Online Retailers Doubled.
U.S. retailers moved to EMV chip-enabled credit and debit cards in October 2015 in order to enhance security on physical card transactions, but this move had an unfortunate side effect. Online fraud attacks have risen 11% since October’s EMV migration, according to a report from PYMNTS. And these attacks are costing retailers on multiple fronts. There were 27 fraud attacks for every 1,000 e-commerce transactions in the fourth quarter 2015, an 11% increase from the third quarter and a staggering 215% increase from the first quarter. Digital goods were the most frequent targets of these attacks at a 2.5% rate in Q4, up from slightly less than 1% in Q1. The report also indicates that $4.79 of every $100 spent online is at risk of a fraud attack, up 150% from $2.90 of every $100 in Q1. Most of these online fraud attempts stem from “suspected botnets” that hack into a system (such as an online retailer’s site) and actually finish a transaction without the user actually knowing it. E-commerce fraud cost retailers $32 billion in 2014, and estimates say U.S. retailers lost 1.3% of all revenue due to fraud in 2015. That is more than double the 2014 rate. To combat this growing problem, online retailers must enhance their security. Target’s widely publicised data breach in 2013 cost the retail giant more than $250 million. Some of that money was allocated toward bank and credit unions, consumer protection services, and credit card issuers. Retailers are, however, spending more on cyber insurance. Retailers on average paid 32% more for cyber insurance in the first six months of 2015 than in 2014, according to global insurance broker Marsh. As the fraud epidemic grows, payment companies and merchants are implementing new payment protocols that could finally help mitigate fraud. John Heggestuen, senior research analyst for BI Intelligence, Business Insider’s premium research service, has compiled a detailed report on payment security that looks at how the dynamics of fraud are shifting across in-store and online channels and explains the top new types of security that are gaining traction across each of these channels, including on Apple Pay. Credit: Business Insider Intelligence.
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