Payment Fraud Threatens Online Security

Online payment fraud is a real threat to consumers and businesses. Shoppers like the convenience of buying online. However, they are afraid that personal information will be stolen in a data breach, or they will fall prey to fraudsters who troll the Internet for unsuspecting victims. A study conducted by Juniper Research indicates the problem is only going to get worse. The findings project, “eCommerce, airline ticketing, money transfer, and banking services will cumulatively lose over $200 billion to online banking fraud between 2020 and 2024 driven by the increased application of fraud attempts and the rising number of attack vectors.”


Advances in technology have increased the number of smart payment options. In some ways, convenience has simplified the payment process. Yet, in many cases, transactions are more complicated on the backend because data pirates have greater access to gateways that enable them to obtain valuable information. Rather than trying to plug one leak at a time, the report recommends that businesses take an omnichannel approach to cybersecurity. The most effective response will use cybersecurity to restrict access points and incorporate machine learning to identify fraudulent behavior and protect consumers.

In many instances, Americans are the first to embrace new technology. Businesses often feel pressure to incorporate the latest payment options into their business model to be competitive and remain relevant to their customers. A few years ago, only a small number of people used voice assistants, connected cars, or wi-fi equipped refrigerators to make payments. Although some consumers remain skeptical about trusting smart devices to manage daily tasks, others look forward to purchasing the next technological innovations.

Voice Assistants
The Internet of Things (IoT) is evident in the popularity of voice assistants. Their ability to dispense information, create a hub that connects smart devices, and manage daily tasks can make them an indispensable resource. We’re very familiar with Amazon Alexa, Google Assistant, and Apple Siri. However, Microsoft Cortana and Samsung Bixby are other voice assistants that are used to pay bills more efficiently. When it comes to ownership, Americans have a slight edge over other countries. According to Juniper Research, 93 million smart speakers were in use in the U.S. by the end of 2019.

  • United States (30 percent)
  • Australia (25 percent)
  • United Kingdom (23 percent)

Security concerns are a big issue that prevents more consumers from using voice assistants to pay bills. Transaction Network Services (TSN) conducted an online survey that asked consumers in 3 countries about their willingness to use voice assistants, new payment technologies, and connected devices.

  • United States (71 percent)
  • Australia (76 percent)
  • United Kingdom (73 percent)

Women (76 percent) were slightly more concerned about making payments using a virtual assistant than men (71 percent). These concerns reflect the percentage of people who use the devices to make payments. Only thirty-two percent of men vs. eighteen percent of women felt comfortable enough with this type of transaction. Age is also a factor in determining how consumers view security. Older consumers tend to shy away from using voice assistants.

  • Ages 16-24 (25 percent)
  • Ages 25-34 (36 percent)
  • Ages 35-44 (34 percent)
  • Ages 45-54 (13 percent)
  • Ages 55-64 (5 percent)

Connected and Automated Vehicles
It’s predicted that by 2023 seventy percent of new cars and trucks will be connected to the Internet. Automotive technology that has been anticipated for years is now taking off and going into overdrive. Internet-connected vehicles promise to enhance the driving experience and move comfort and safety to the next level. The Center for Advanced Automotive Technology describes connected vehicles as “vehicles that use any of a number of different communication technologies to communicate with the driver, other cars on the road (vehicle-to-vehicle (V2V), roadside infrastructure (vehicle-to-infrastructure (V2I), and the “Cloud (V2C). Consumers, businesses, and the government will benefit from the growing adoption of connected vehicles.

  • Fewer crashes and improved vehicle safety
  • Reduce infrastructure repairs and maintenance costs
  • Track traffic information in real-time by assessing travel routes
  • Improve productivity by eliminating unnecessary driving tasks
  • Improves energy efficiency and fuel-usage

As with other smart technology, security and privacy are ongoing challenges. Providing access to vast volumes of information creates problems with data analytics and aggregation that were not areas of exposure for vehicles previously. However, the majority of consumers in the U.S. are willing to buy a connected car that has onboard devices they can use to make purchases. The ability to conduct cashless transactions from the comforts of a connected vehicle may override concerns about security as more people become familiar with the capabilities offered by in-car payment systems.

  • United States (56 percent)
  • Australia (49 percent)
  • United Kingdom (40 percent)

Consumers Want Convenience and Security
Sixty-six percent of TSN survey respondents prefer to use the fastest and most convenient payment option available as long as it is secure. It takes time to shop on multiple sites using various smart devices and payment options. Yet, shoppers have little choice except to invest the time if they want to complete their daily tasks and prepare for future activities.

While consumers are willing to make smart payments, more than seventy-five percent of respondents are concerned about security. Their anxiety will only increase as new technologies are introduced into an already uncertain environment. Ben Versen, Chief Product Officer for TSN, says. Our conclusion for the industry is that companies need to implement strong security protocols and communicate these measures to consumers to mitigate their concerns. To address this, TSN provides a managed tokenization service that allows merchants to provide secure provisioning and payment of consumer accounts for mobile and in-vehicle applications. More than three million connected cars are currently using, and benefiting from our secure payment technology.”

Sources:
Transaction Network Services (TSN)
Juniper Research
Center for Advanced Automotive Technology

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