A growing problem in financial services


Debit cards are among the most popular payment methods for physical and digital transactions worldwide.

And, as the COVID-19 pandemic has driven digital transformation around the world, contactless methods like debit and credit cards as well as e-wallets have grown in popularity since 2020. Indeed, credit cards payment allow people to spend money easily without resorting to cash. or bank transfers.

On the other hand, this significant shift in consumer trends also opens up more possibilities for cybercriminals to steal victim funds through debit card fraud. According to an FIS report, the digital transformation fueled by the pandemic led to a 35% increase in the dollar volume of attempted fraudulent transactions in April 2020 compared to the previous year.

As regulators are aware of this problem and step up their game to protect citizens from fraudsters, criminals are quick to learn and use more sophisticated methods.

What are the most common types of debit card fraud?

Debit card fraud falls into two broad categories: when the criminal uses the consumer’s physical card and absent card fraud (NPC), in which fraudsters siphon money from the payment card by using it in online or by phone.

The precedent can happen in a number of ways, from theft in the street, to intercepting your mail, to attaching a card skimming device to an ATM to create a counterfeit card. In these cases, fraudsters use the physical card (or a cloned card) either at an ATM to withdraw money or at a point of sale (PoS) terminal at a merchant.

On the other hand, cybercriminals use a wide variety of tactics to acquire debit card details for CNP fraud, including hacking into centralized merchant or financial service databases, skimming and phishing attacks. .

Once they have the necessary information, which is often associated with sensitive personal data such as social security numbers, date of birth, name and billing address, authors use it to purchase products and services at merchants to resell later or open new financial accounts to monetize stolen card details.

How can businesses and consumers protect themselves against debit card fraud?

Regardless of industry or company size, customer satisfaction and protection should be the top priority of any reputable business. As card fraud becomes an increasing threat every year, they must offer the necessary guarantees to minimize the risk of successful attempts by fraudsters.

To achieve this, a business should consider implementing several measures. For example, encrypting customer card data at every step of the payment process reduces the risk of fraud. Obviously, if you are managing sensitive data from many customers, you must spend the necessary resources to establish a highly resilient IT infrastructure capable of effectively identifying and responding to cybersecurity threats.

In addition to getting your business PCI DSS certified, the use of a combination of active fraud monitoring – preferably via artificial intelligence solutions – and mandatory 2-FA checks via 3-D Secure 2.0 (even in outside the EEA) can help fight debit card fraud more effectively. .

However, to win the war on scammers, we also need cardholders to remain vigilant against scams. As a consumer, it’s a good idea to set up spending alerts and regularly monitor your account balance for any irregularities. This is very important, as most regulatory laws protecting against absent card fraud require victims to report crimes within a specific time frame.

In addition, phishing is one of the most popular ways to steal personal or financial information from individuals for later use for debit card fraud. Fortunately, by following simple but reliable practices like double checking website URLs, using good antivirus software, refusing to open or download attachments from recipients you don’t know and only share data with sites you know and trust. -, a cardholder can avoid falling victim to a phishing attack.

While it may seem obvious, it’s hard to stress enough the importance of using strong passwords for online services, with two-factor authentication enabled even for your social media accounts. If you have several different IDs, it’s a good idea to use a password manager so you don’t forget them.

In terms of physical fraud, try choosing a service provider that offers one-click card blocking or blocking, to prevent criminals from siphoning money from your account if your card is stolen or lost.

Cooperation is the key to tackling debit card fraud

When it comes to any type of fraud, there is no one-size-fits-all solution.

Unfortunately, cybercriminals are savvy and learn fast, which means they’ll be able to bypass many of the anti-fraud measures we currently use to secure sensitive consumer information.

For this reason, businesses and their customers must work together to protect themselves against debit card fraud and other types of cybercrime on a case-by-case basis. If everyone does their part in this area, the card market in general will become more resilient to the attempts of fraudsters.


Author: Alexander Vasiliev, Co-Founder and CCO of the Mercuryo Global Payment Network


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