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The Black Market: Innovation’s Next Frontier

When we think business innovation, we tend to think about the shinier, nicer bastions of it: Silicon Valley, San Francisco, Boston, New York. But according to one cybersecurity expert, there is another somewhat less savory place to look for innovative original thinking — among the data thieves and cybercriminals on the Dark Web’s black markets.

“There has never been such a glut of stolen information out there,” cybersecurity reporter Brian Krebs said Sunday at the Gartner Symposium ITxpo 2015. “One of the interesting things that comes out of all this is innovation.”

That marketplace isn’t going anywhere, said Krebs, and the ending is not quite what people expect.

“People always ask me … my response is the light at the end of the tunnel is not a way out, it’s an oncoming train,” he says.

Take, for example, the wonderful world of stolen cards. EMV is supposed to make that harder for criminals, who will be driven to milk the old, insecure card system. Krebs noted that this piece of conventional wisdom is not wrong exactly — but incomplete.

“[The spike in cybercrime] has everything to do with the innovation coming out of the underground and broadly available software that allows bad guys to hijack [point-of-sale systems] remotely,” Krebs said. “Bad guys have to actually sell.”

Just like good guys, as it turns out, and in their highly competitive illegal market, the pressure is on at all times to not just nab the data but also build loyal customers to buy it over and over and over again. Those criminals are using analytics to get a clearer eye on what cards and banks specifically to target, what regions their customers prefer. They are offering money-back guarantees on card numbers that don’t work and even offering bulk discounting for those who buy big batches of card numbers.

Krebs also noted that digital crime is offering new opportunities to criminal organizations who are looking to find crimes to commit with a lower risk of death or very long-term incarceration. The Bloods and Crips, Krebs noted, have found something better to do than drug-dealing — stealing cards, shopping big and reselling the goods for cash.

“It’s 20 to life if they are caught drug-dealing. Look at credit card fraud … if they get caught … it is a slap on the wrist. A stolen card can be purchased for $10 to $20. If you use the card to buy three iPhones, you just made $800. This is a no-brainer.”

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Our data and analytics team has developed a number of creative methodologies and frameworks that measure and benchmark the innovation that’s reshaping the payments and commerce ecosystem. Check out the February 2019 PYMNTS Digital Fraud Tracker Report

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