Retailers are on course to lose more than $70 billion globally to remote “card-not present” (CNP) fraud over the next five years. Despite this fact, retail managers of both large and small operations are under the financially fatal impression that fraud prevention is too costly.
Chip-enabled (EMV) credit cards are designed to be more secure than magnetic stripe cards because the ability of the chip to create dynamic, single-use data that is nearly impossible for fraudsters to counterfeit. At least, that is how the main advantage of EMV credit cards was touted by the consortium of card-issuing banks and other institutions that had been suffering billions of dollars of losses for years leading up the October 1, 2015 deadline for US businesses to adopt the new EMV standard.
An estimated 9 million American identities are stolen each year – it’s no wonder why identity theft is the #1 complaint amongst American consumers, according to the Federal Trade Commission (FTC).
Although dealing with identity theft and fraud is akin to addressing the elephant in the room – no one wants to do it – it is becoming increasingly important that businesses, particularly those in the banking industry, take the lead in providing fraud prevention solutions for their customers, lest they want to miss out on profiting from the biggest generation since the Baby Boomers: the Millennials.
Millennials, unlike previous generations, live and breathe technology. And this coupled with the fact that rampant rates of identity theft and fraud have left American consumers – no matter which generation they’re from – fearing identity theft the most whenever they’re online, means that preventing and addressing security concerns needs to be a priority when attempting to attract this upcoming technology-dependent generation as customers.
Mobile Identity Authentication
Many potential business-cases point to the desire to have an identity authentication solution available as a mobile application on a smart phone or tablet. In some cases, it simply isn’t feasible to have a stationary device, tethered to a PC, available at the location where authentications must occur. In other cases, it may be desirous to have a client that is not in your physical store or branch location conduct an identity authentication wherever they are – which might be in their home, at a hotel, or even walking on the street.
Before the advent of the internet, global electronic communications, and online databases, it was a simpler time for the world of fraud: mainly consisting of counterfeit money and documents signed with a forged signature. While these crimes caused inconvenience and loss, the extent of the damage was relatively limited in scope and financial loss compared to today.
In the previous post, we discussed what EMV and the fraud liability shift are as well as how it will affect businesses, especially small businesses. In this post, we will focus on helping you build a successful strategy that will protect your business from the upcoming fraud liability shift as well as discuss why this strategy will help protect your business from fraud.