The advent of new technologies in terms of modes of payment has entailed a rise in the rate of financial frauds as well. A recent study established that over 2,000 data breaches has been confirmed in 2015 and since 2013 approximately 4 billion cases of stolen data were registered. The black market data about consumers has flourished in such a way that it has virtually become akin to a genuine economic system. More and more consumers and businesses are being victims of losses and it has become urgent to enhance technological applications and security standards to be able to create a proper safety net.
Why fraud is on the rise?
The principal objective of fraudsters is, of course, to gain money. As technologies keep evolving, they continue adapting themselves very quickly. They attain their goal by exploiting loopholes in security systems mainly related to credit and debit cards. Currently, fraudsters are even operating from organized and specialized groups. Some cybercriminals have even succeeded in devising stunning business plans and running their own ‘companies’. Innovation in security systems- such as EMV chip cards- automatically urges them to gush towards weak links and make the most of the shortcomings.
Their modus operandi
Cybercriminals are attracted to bank cards. They target the three principal types of cards, that is, debit, credit and prepay cards. Versatile, these fraudsters can use several means to commit frauds:
- They painstakingly look out for loopholes in security systems
- They can steal cards or exploit those that are lost
- They resort to skimming and phishing attacks
- They can take advantage of social engineering methods
- They have also proven to be good at designing and propagating malicious codes
Shifting to EMV chip cards a prerequisite
Since bank cards are most susceptible to be counterfeited, it has become vital to switch to the newest EMV chip cards. They are replacing the old traditional magnetic stripe card which is very easy to counterfeit. EMV cards, supported by a computer chip, generate a unique code for every single transaction. As such, even if data is stolen at a particular point of sale, it remains useless. The EMV cards cannot be cloned unlike magnetic stripe cards which store full information about the holder.
Combining Payment Card Industry Data Security Standard (PCI DSS)
To be more effective, security systems should be coupled with appropriate PCI DSS. The latter offers additional security controls to guarantee that throughout transaction processed, information present in the cards is secured. As such, it prevents transfer of data when inserted into the retailer’s system. PCI DSS furthermore provides updates, can detect intrusion, can manage access and training for employees.
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