Attempted fraud with stolen payment information has increased significantly in the US since merchants and card issuers switched to cards with EMV chips rather than magnetic strips, according to a report from ACI Worldwide cited by Reuters. Annual fraud costs to US retailers rose 38% to $32 billion in 2014, according to BI Intelligence estimates based on data from Lexis Nexis.
In 2015, one out of every 86 card-not-present transactions were fraud attempts compared to one out of every 114 in 2014.
This is especially prevalent as more merchants offer buy-online, pick-up in-store features. Fraudulent shoppers are using stolen payment information online — where card information is simply entered — and picking items up in-store where the merchant does not require a second run of the credit card.
Online fraud is expected to especially increase this holiday season, with this type of in-store pickup scam climbing 28%. This is particularly important for omnichannel retailers that do not run secondary security checks for customers that shop online and in-store. As merchants do their best to offer multiple channels for holiday shoppers, it is important to implement new security guidelines — especially as order volume increases and employees become busier.
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