‘Tis the Season…for Online Payment Fraud

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The holiday season is a time of joy, especially for many retailers that rely on a boost in end of year sales. But it’s not all good will toward men as Christmas approaches, as one security expert predicts that online fraud is about to hit an all-time high.

The California-based company ThreatMatrix, Inc. stopped 130 million online attacks From July through September, a 40% increase over the previous quarter and up 90% over the same three months in 2015.

Those behind the attacks are attempting theft on a massive scale. Stolen identity data is being used in attempts to place thousands of orders at multiple major retailers. The company is now predicting as many as 50 million weekly attacks on retailers during the peak of the holiday shopping season.

The switch from magnetic strips to EMV chip credit and debit cards was supposed to help curb illegal activity and it has achieved that goal, since these new cards are nearly impossible to counterfeit. Compared to last year, Visa has observed a 43% decrease in the amount of counterfeit fraud among merchants who have upgraded to EMV-compatible payment systems.

Thus, those who like to get stuff without paying for it are moving away from using physical cards at the point of sale, and focusing exclusively on cyber-attacks with sophisticated bots. At times, the attempts to defraud ecommerce merchants actually outnumbered legitimate sales transactions.

The requisite warnings have been issued to consumers on how to protect themselves from identity fraud. But as the war between cyber-security and cyber-thieves continues to escalate, there will sadly always be opportunities available for those looking to steal.

How can you protect your business? A secure payment processing system is a great start.

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