Robert Capps, VP at NuData Security commented below on the growth in online shopping, and warns that consumers need to be aware of the risks associated.
Robert Capps, VP at NuData Security:
“While we can all agree that it’s good to see growth in the economy, lower prices and improving consumer confidence (especially following Brexit), in our business we always look at this kind of news with mixed feelings.
The parasitical nature of fraud is that it follows its host. At the risk of sounding like party poopers, accompanying these growth numbers is the inevitable rise in fraud. Much of this growth will be in the online economy where consumer awareness of risks is questionable at best.
According to the new ACI 2016 Fraud Report,almost one in three UK consumers (29%) has been a victim of card fraud in the last five years, with much of that fraud perpetrated by fraudsters who made online purchases using hacked or stolen card details. Just as chilling, is the figure that a full 17% have been victimised multiple times.
Mobile shopping is ubiquitous, and, so the thinking goes, why wouldn’t consumers avail themselves of all of these modern conveniences? It’s the modern era, after all. Measures taken to protect vendors and customers are seen as barriers, and in many cases it’s not just perception, these transactions can be full of needless friction that target good customers just as often as the bad ones.
Smart merchants are making online shopping even more convenient than bricks and mortar shopping, and those that haven’t got a good online strategy are slipping into memory. With drop shipping there’s not a long wait, there’s more selection online, no lines and no pushy sales people to fend off.
But while some of these conveniences are amazing, consumers continue to engage in risky online behaviours. It’s like there were never taught to look both ways, or check under the bed for monsters. Online retailers, knowing full well that 1/3 of customers will leave them after a fraud event, also realise they are held accountable for consumer security. They must do this while expected to provide an excellent experience. And, let’s not forget, sell things – because, after all, they are in business to sell things not protect them. Perception being 9/10 of reality, these expectations are seen as fair (at least in consumer and shareholder minds).
Merchants just can’t adapt to every new emerging threat scenario. It’s not realistic to expect them to. On top of that, they usually have a patchwork of security vendors and solutions, not all of which get along in every case. The pointing fingers seem to go in every direction.
Even retailers that have a solid online strategy might fail. Walmart’s purchase of Jet further solidifies the notion many retailers just may lack the inherent DNA required to address the online marketplace in a safe compelling way.
What we have is a situation where even good news of growing economies, news that should thrill us, leaves us cold. We’ve got to realise that solutions exist for us to get beyond the paradigm of single point answers for complex human problems. Multi-faced approaches are available that can make fraud a lot less relevant, less parasitical, and less impactful in our lives.”