The headlines are in and it seems the deep winter freeze transitioning to a spring thaw is not the only welcome forecast. Consumer spending is on the rise, reaping budding opportunities for many businesses. But beware: not every consumer is good for business. The headlines about data breaches and identity theft remind us that credit cards are a valuable—and easily obtainable—commodity. So while U.S. issuers and merchants are gearing up to implement a more secure EMV chip card experience—which only applies to in-person transactions—we are kidding ourselves to think that fraud will be eliminated. There is a storm looming for e-commerce and direct response marketers.
The Fraud Tsunami
Let’s face it: fraudsters love stealing credit card information. It’s priceless! Shopping sprees abound! So what happens when EMV chip cards stem the tide of in-person counterfeit card fraud at big-box retailers, mall stores, restaurants, and Main Street businesses? Do the fraudsters pack it in and get a job shoveling snow in Siberia or Boston? Heck no!
The migration to EMV chip cards will create a tidal wave of fraud for e-commerce and direct marketing businesses. EMV will force criminals to seek vulnerable cracks into card-not-present business environments to make fraudulent purchases: online, over the phone, and through the mail. That means that direct response marketers that sell online have a huge target on their backs. And that will surely have a negative impact on campaign optimization rates, and the bottom line.
The SolutionIt is necessary to ebb the fraud tide wherever payments happen: online, in person, on the go. E-commerce data security and fraud tools must be combined with expertise in payments, media, creative, call centers, operations, fulfillment, and conversion to identify points of vulnerability and stem the tide of fraud.
Payment tools that remove actual data from your systems not only mitigate fraud; they can also reduce PCI compliance scope and the associated headaches.
- Transparent redirect offers control over the look and feel of your payment pages, while allowing you to securely pass credit card data directly from the customer’s Web browser into the payment gateway, never passing or transmitting sensitive data through your enterprise.
- Tokenization replaces actual card data with a secure substitute that renders the data useless if stolen. It facilitates the card-on-file payments for subscription, recurring and installment plans.
Don’t be scared. Be prepared. If you block out the storm of fraud, there will be sunny days ahead.
Want to Learn More About Payment Processing?
The ERA Payment Processing Committee is hosting a webinar on April 27 about recent law enforcement and policy developments involving payment card processing. Join us and learn more about these evolving efforts and how the payments industry has responded.
Contact Karen Eppsteiner for more information!
Scott Conti is senior VP Direct Sales at Merchant e-Solutions and a member of the ERA Payment Processor Committee.
Image courtesy of Serge Bertasius Photography/FreeDigitaPhotos.net