Next-Gen Debit

How Music Retailers Keep Card-Not-Present Fraud From Sounding A Sour Note

The COVID-19 pandemic is shaking up shopping behavior. Consumers who previously paid for purchases by swiping or inserting their cards at in-store point-of-sale (POS) terminals are now turning to contactless cards and online shopping to safely and easily obtain needed goods. Shoppers are also more reluctant to take out credit lines as ongoing economic uncertainties make it difficult for them to determine whether they will be able to repay their debts on time.

These two forces appear to be driving an increase in consumers’ use of touch-free debit payment options. Many shoppers are now loading their debit card details into mobile wallets and ordering apps, keying the information into online checkouts or waving contactless debit cards at POS terminals.

The September Next-Gen Debit Tracker® digs into how consumers’ debit usage is shifting to drive a massive surge in eCommerce purchases. It also examines how merchants and financial institutions (FIs) are responding and working to enable easy contactless and online purchasing while keeping such card-not-present (CNP) transactions safe.

Around The Next-Gen Debit World

Debit transactions are on the rise, with credit union service organization PSCU finding that the value of payments made with debit cards rose 18 percent year over year between June 29 and July 5. This purchasing uptick occurred even amid new COVID-19 outbreaks, which likely would have affected shopping options and consumers’ purchasing decisions.

Merchants have also been retooling their checkout experiences to suit consumers’ desires for low- or no-contact shopping. A new report found that 58 percent of merchants now accept contactless cards, compared to the 40 percent that did so in 2019. More merchants are enabling mobile wallet payments, as well.

However, even contactless payment options may not be enough to entice some shoppers into physical stores and many are turning online instead. Almost 65 percent of FIs said in a recent survey that their customers are now making more CNP payments, for example.

Find out more about these stories and other headlines, read the Tracker’s News and Trends.

How Music Retailers Can Harmonize Security And Seamlessness

Consumers stuck at home during the pandemic are turning to new hobbies, and this trend has been boosting online sales of musical instruments and sound equipment. Merchants must be ready to safeguard the growing volume of CNP transactions, but this could be especially challenging because the online music sector is already a prime target for would-be fraudsters. Criminals know that instruments and electronics are high value and easy to resell on black markets, said Mike Clem, chief digital officer at musical instrument and equipment retailer Sweetwater. In this month’s Feature Story, Clem discussed what it takes to combat CNP fraud risks as well as use digital and manual tools to verify new customers and confirm returning ones.

Find the full story in the Tracker.

Deep Dive: Keeping Security Present Even When Cards Are Not
Merchants across retail sectors need to step up security to prevent both CNP fraud and unwarranted chargebacks, but doing so may require adopting tools that differ from those they use to protect card-present transactions. This month’s Deep Dive examines key approaches being leveraged to defend online card transactions, including limits on card-based spending, tokenization and the use of 3D Secure 2.0 protocol, a method that sees card issuers analyze the risk level of in-process purchases and then prompt suspicious-seeming users to undergo greater levels of authentication.

Download the Tracker to read more.

About The Tracker

The Next-Gen Debit Tracker®, a PYMNTS and PULSE collaboration, provides a detailed examination of debit’s changing role in commerce and offers insights into how merchants and financial institutions can innovate in the space.

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