Criminals are migrating from brick-and-mortar retailers to online stores.
NEW YORK CITY – With more U.S. retailers adopting credit-card chip technology, thieves have begun to move from brick-and-mortar stores to online retailers, Bloomberg reports. Use of stolen card data to purchase goods via websites, mobile apps or call centers skyrocketed 40% in 2016, according to a new report from Javelin Strategy & Research.
“We are seeing more sophisticated types of fraud moving into the online environment,” said Erika Dietrich, global director of payments risk management at ACI Worldwide. A study released last summer found that one in three consumers worldwide has experienced card fraud.
By the end of 2016, nearly 1.81 million merchants in the United States could accept chip cards, a two-fold rise from 2015, according to Visa Inc. E-commerce retailers and financial firms will shell out $9.2 billion each year in fraud-reduction initiatives by 2020, a 30% jump from current levels, according to Juniper Research.
Worldwide, sales of merchandise purchased online is estimated to hit $27.7 trillion in 2020, up sharply from $22 trillion in 2016, according to eMarketer. This increased online shopping means thieves will have more opportunities to grab financial data or to place orders with stolen information. “Right now the environment is more challenging than it’s ever been,” said Al Pascual, research director and head of fraud and security at Javelin. “And things will get worse before they get better.”