Online Fraudsters Test Small, Purchase Big
Businesses accepting online payments walk a fine line between protecting themselves and their customers against fraudsters while not over-rejecting payments for the actual card holders.
Radial released data this week that should have businesses alarmed when it comes to payment security. To date in 2017, data shows a 200-percent increase in credit card testing, a tactic used by fraudsters to test stolen credit card numbers with small incremental purchases before making large-dollar purchases on the card, compared to the same quarter in 2016.
According to Radial, fraud is also up 30 percent year over year, which is expected. Many experts believed that online fraud would increase as brick-and-mortar fraud became more difficult thanks to Europay, Mastercard and Visa (EMV) chip-based transactions.
"Our data adds another alarming statistic for retailers who may be unprepared to manage fraud activity in e-commerce," said Stefan Weitz, chief product and strategy officer at Radial. "We know fraudsters won’t stop looking for opportunities to monetize their stolen data and will even automate this process once they have a card that appears to be working. This results in quick, large volume purchases that leave retailers vulnerable. When retailers miss card testing, they’re contributing to future card attacks. Fighting card testing is complicated, but can stop millions of unanticipated fraud attacks if tracked and managed efficiently.”