PAYMENTS & ECOMMERCE: SUBSCRIPTIONS
Lestweforget... Widespread amnesia about which and how many organisations hold our account details is not only bad financial practice, it also leaves us wide open to fraud. G+D’s Head of Digital Payment Solutions Jukka Yliuntinen says banks can give us a nudge The gradual drift from an ownership culture to a rental or subscription-based economy was, like many digital trends, boosted in 2020. Who hasn’t taken out an extra streaming service or signed up for monthly deliveries of loo rolls? But the price we pay for such flexibility and convenience is a commensurate rise in cyberfraud, as we freely share our personal financial details across the web. In fact, we often forget which organisations we’ve granted access to our accounts, in many cases via tokenised transactions, despite many having unlimited rights to take repeat or renewal payments at will – not to mention the issue of validating whether companies are legitimate in the first place. Payments security specialist Giesecke + Devrient (G+D) has sized up this risk, and made it the focus of its latest innovation, with a new white-label tool that gives consumers back control of their account details and, ultimately, their cash. Convego Service Broker allows banks to offer consumers a Token Cockpit tool that tracks who they’ve given their card details to, and what for, via their banking apps, where they can also turn permissions on and off at will. G+D has been a leader in technology that builds trust – from cash to cards and now digital and biometric transactions – since the 19th century, continually developing solutions to emerging threats and challenges on behalf of its customers, and, where necessary, acting strategically with other industry partners. It’s little wonder G+D is giving this issue so much attention, considering the problem cyber fraud represents worldwide. As consumers turned to online purchases during the pandemic, ecommerce and fraud spiked in parallel, particularly during the annual ‘holiday spending’ periods. A TransUnion survey of 2,620 US
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TheFintechMagazine | Issue 19
shoppers at the start of the 2020 holiday shopping season last October, found mobile was the preferred transaction method for 80 per cent, with many turning to payment options like Apple Pay (32 per cent) and Google and Samsung Pay (34 per cent). Yet, despite coveting ease and choice, 50 per cent were also concerned about fraud, identifying safeguards such as biometrics, including fingerprint (44 per cent) and facial recognition (37 per cent), checkout validation (58 per cent), and protecting their ID and password (22 per cent), as priorities. Special, one-day shopping events accounted for most holiday season fraud (Cyber Monday, 26.03 per cent and Black Friday, 12.02 per cent), with mobile phones used by hackers in 50 per cent of instances. The prevalence and cost of fraud is rising, while detection rates, worryingly, have fallen. Research by LexisNexis before and during the COVID shutdown, among 801 US and Canadian retail and ecommerce executives, found that every $1 of fraud costs retailers $3.36, a rise of 7.3 per cent from $3.13 in 2019. During 2020, on average, ecommerce merchants suffered 344 fraud
attempts per month, up 24.2 per cent from 277 in 2019, and only 118, or 34.3 per cent, were prevented in 2020, compared with 156, or 56.3 per cent, in 2019. An ACI Worldwide analysis of hundreds of millions of ecommerce transactions throughout the pandemic, indicated that criminals were taking advantage of
Where are they?: Keeping track of who has a consumer’s payment details helps prevent fraud