Card-not-present (CNP) fraud is increasing as cyber thieves are showing they are quite able to use both technology and stolen payment card data to defraud retailers around the world.
That’s the latest findings of Research and Markets, which released a new report Tuesday (Jan. 17) titled Card-Not-Present Fraud: The Merchant Empire Strikes Back. According to Research and Markets, eCommerce merchants, particularly in the U.S., are in a perfect storm of rapid online sales growth at the same time that the credit card industry is continuing to transition to EMV chip technology. Those trends leave the merchants vulnerable to CNP fraud. The researchers pointed to the breaches of payment card data at major retailers including Target and Home Depot during the last few years as providing the bad guys with a treasure trove of millions of cardholders’ data that is still being used by thieves to commit this type of fraud.
“Despite anticipating that fraudsters would transition to online attacks once counterfeit card fraud at the point of sale was reduced through the EMV chip, U.S. payment card networks and issuers, payment providers, merchants and cardholders are now asking, What can we do about the increase in CNP fraud?,” Research and Markets wrote. “In response, an industry of technology developers providing solutions to combat CNP fraud has emerged to give online merchants the means to strike back.”
In November ACI Worldwide issued a report in which it found CNP fraud attempt rates are expected to increase by 12 percent by volume. ACI said fraud is moving more online partly because of the adoption of EMV chip cards in the U.S. The study also found fraudsters are targeting cosmetics, cordless headphones, sneakers and other lower-priced items that can be resold on the black market or through auction websites.