“Payment fraud is an unfortunate fact of life,” Stephanie Ericksen, Vice President of Risk Products at Visa, recently told PYMNTS. “And when shopping volume spikes, as it does around the holidays, so, too, does the threat posed by fraudsters and criminals.”
According to Visa data that Ericksen shares, the amount spent on the holidays in the U.S. this year will be significant. On the most recent Thanksgiving Day alone, in fact, Visa accountholders stateside made $1.5 billion in online purchases — a 22 percent increase from the 2014 holiday, when they spent $1.2 billion.
Although one might assume that with more spending comes more risk, Ericksen states that, thanks to several recent payment innovations, “2015 is shaping up to be the most secure [holiday] shopping season on record.”
What will help that prognostication come to bear, Ericksen attests, is merchant and consumer awareness of potential fraud areas, as well as the security features that can help combat criminals who are targeting the payments system during the holidays.
While card-present counterfeit fraud represents about 70 percent of in-store fraud, Ericksen notes that EMV chip cards — and the unique, one-time code that they generate, thus preventing the creation of counterfeit cards by cybercriminals — are “leading the charge” against it.
“Consumers are getting new [EMV] cards en masse,” she remarks, “with over 180 million Visa chip cards issued, more than 592,000 merchant locations accepting chip transactions as of the end of October, and approximately 22,000 new locations being added each week.”
Mobile Payments Security
Through services like Apple Pay, Android Pay and Samsung Pay, mobile payments — and the convenience and speed they provide to consumers — are on the rise.
Central to their security is tokenization, which Ericksen sees as beneficial in part because the process of replacing sensitive payment account information (including the card number) with a unique digital identifier is “largely invisible to the consumer.”
Beyond the tokenization that all mobile payments provide, specific services like Apple Pay provide the additional security of using the accountholder’s fingerprint to authenticate the user, which Ericksen notes is “a convenient and secure alternative to signatures or PINs.”
Sharing further data from Visa (from a new survey), Ericksen points out that “90 percent of shoppers will be buying online” this holiday season, making mobile and online security — in addition to more traditional card-present security — “imperative.”
“Technologies like Visa Checkout,” says Ericksen, “provide consumers with a fast and secure alternative to filling out online form fields. Once consumers sign up and enroll their cards, they can complete online transactions with a single account, across multiple devices.”
Ericksen goes on to describe additional security features that Visa provides to its customers, such as Visa Advanced Authorization, which “takes into account up to 500 parameters, from geographic location to transaction history, [and] provides Visa card issuers with a valuable tool to use before deciding whether to authorize a purchase.”
Furthermore, Visa encourages consumers and its partners in the payments ecosystem to fight holiday fraud by “spreading the word about simple tools and techniques that can really make a difference,” says Ericksen. Such tools include transaction alerts that warn accountholders of potentially fraudulent activities via text or email, as well as Mobile Location Confirmation, “wherein cardholders … can register their mobile device’s geolocation data to serve as an additional input into Visa’s predictive fraud analytics.”
“At Visa we devote significant resources to protecting payment data, preventing fraud, and maintaining trust in the payments system,” Ericksen continues. “Our efforts to date have been successful, with fraud continuing to trend to historic lows, despite hugely increased transaction volumes.”
“Special vigilance is required at the holiday season to combat criminals’ efforts,” she concludes, “but working together, we can all help fight holiday fraud.”