Welcome to The Fraud Practice’s FraudBlog; your source for updates on current events, commentary and best practices related to the eCommerce CNP payments and fraud industry.
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Desktop and mobile eCommerce sales reached a combined $14.5 billion across Thanksgiving, Black Friday and Cyber Monday, while CNP channel sales on each day increased by at least 17 percent year-over-year. The nearly $6.6 billion in eCommerce sales on Cyber Monday set a new record for the largest online shopping day in North America, as Cyber Monday marked the fifth consecutive day with over $1 billion in online sales.
Online and mobile eCommerce sales on Thanksgiving Day increased more than 18 percent to $2.87 billion this year. Digital commerce sales exceeded $5 billion on Black Friday and reached $6.59 billion on Cyber Monday, each increases of about 17 percent from last year.
Visa Canada published a document titled The Future of Payment Security in Canada, detailing several new requirements related to ensuring security with Visa card transactions, including several new rules and deadlines coming into effect over the next few years. Notably, issuers must eliminate the use of static passwords with Verified by Visa by April 2018, while merchants will be required to collect and provide the CVV2 to issuers but in turn receive a liability shift when issuers approve incorrect CVV numbers.
These new requirements around the CVV2 only apply to eCommerce and phone order merchants, but a separate requirement will apply to mail order merchants. Catalog and mail order merchants are now prohibited from collecting the CVV2 in a written format.
Financial Fraud Action (FFA) UK, a financial services industry research and reporting group, recently released their 2016 year-end payment card and banking fraud totals which showed an increase in card fraud overall, primarily led by card not present channel fraud. Changing trends include an increase in fraud attempts but targeting lower order amounts compared to last year, a shift from malware targeting banks to fraudsters directly targeting consumers and consumer account credentials, and mobile banking app fraud losses more than doubling from 2015.
The Financial Fraud Action UK organization is composed of major banks, payment acquirers and card issuers in the United Kingdom, and members report payment card, remote banking and check fraud losses each year. Over the years FFA UK has tracked significant increases in total payment card fraud against UK-issued cards, growing from £341 million in 2011 to £618 million in 2016. This marked a nearly 10 percent increase just from 2015, when the total fraud loss on UK-issued payment cards was £567 million.
According to recent data from Experian, eCommerce fraud was 15 percent higher in the first half of 2016 compared the same period the year before, but for the full-year eCommerce fraud attack rates increased to 33 percent. This implies an even greater increase in CNP fraud in the second half of the year, and it is believed that the transition to EMV or chip cards is the primary reason behind this growth.
In the United States, the EMV liability shift occurred on October 1, 2015 and the rollout has been gradual. Likewise, the increase in CNP fraud was notable but in-line with recent years’ growth. By the end of 2016, nearly 2 million U.S. merchant locations were equipped to accept EMV cards, or 39 percent of all merchant locations, according to Visa. It was in 2016, and seemingly more so in the second half of the year, that the industry really started to experience the shift of more fraud attempts to the customer not present channel.
If you are attending the CNP Expo May 18-21 then be sure to see The Fraud Practice at booth number 418 in the Exhibit Hall. For those who would like to find out more about our online training certification programs, we will be giving out free copies of David Montague’s Essentials of Online Payment Security and Fraud Prevention book with valuable online training discount coupons inside.
There are a limited number of books available, so be sure to stop by The Fraud Practice’s booth before we run out. In addition to visiting us at the booth, you may want to attend the May 20th breakout session titled Fraud on the Move, moderated by The Fraud Practice’s Justin McDonald, Sr. Risk Management Consultant.
If you’d like to schedule a time to meet with one of our consultants at the CNP Expo, or just be sure we hold you a copy of the book, please contact us today.
If you haven’t yet registered for the CNP Expo and would like to attend, you can use The Fraud Practice’s discount code below.
More and more consumers, as well as fraudsters, are browsing, buying and banking via their mobile devices. While this has benefited consumers with increased convenience it has also created new challenges for merchants, financial institutions and others that want to reach customers in the mobile channel, as they now must also manage new risks.
In this feature article The Fraud Practice discusses the mutually beneficial relationship between mobile devices and identity document verification, focusing on how this risk management technique can be best utilized within the mobile channel and how mobile device technology has made identity document verification a more viable option for merchants and other organizations beyond financial institutions.
The Fraud Practice, Kount and CardNotPresent.com have once again teamed up to bring you the third annual Mobile Payments & Fraud Survey. The 2015 Survey Report is now available and David Montague, Founder of The Fraud Practice, will discuss key findings along with Rich Stuppy, COO of Kount, and Steve Casco, CEO of CardNotPresent.com, during a live webinar held later this month.
As the mobile channel continues to grow and mature it seems fraud is keeping pace with increasing mobile transaction volumes. Unfortunately, the 2015 Mobile Payments & Fraud Survey found that many organizations are not taking the necessary measures to understand and combat fraud in the mobile channel as less than 40 percent of merchants differentiate or track mobile from traditional eCommerce fraud losses. Many more survey findings are detailed in the third annual installment of the Mobile Payments and Fraud Survey, which continues to track and measure the priorities, obstacles and capabilities of many types of organizations operating in the mobile channel.
In addition to the annual survey report, The Fraud Practice, Kount and CardNotPresent.com will be hosting a webinar to discuss key survey findings and issues impacting the mobile channel. This webinar, titled Trends Shaping the Mobile Industry for 2015, will be held May 28th at 11 AM ET. All webinar attendees will be entered in a drawing to win one of 10 free online training courses from The Fraud Practice, a $120 value.
Request you free copy of the 2015 Mobile Payments & Fraud Survey Report today
Register for the webinar here
On October 1st The Fraud Practice will be increasing the enrollment prices of our online training programs across the board. If there are courses or Career Tracks that you’ve been considering for yourself or for staff, register by the end of September to enjoy the current low prices.