According to Nilson Report’s October 2016 study, in the year 2015, more than $31 trillion were produced worldwide by using credit and debit card payment systems, up by 7.3% from 2014.
In 2015, seven in eight purchases in Europe were made electronically and we all have to thank online money-transfer systems, such as Paypal, and the spread of e-commerce around the world for making it easier not just for people who makes these transactions, but also for scammers who wants to get a hold of your money.
The worldwide losses from card fraud rose to $21 billion in 2015,up from about $8 billion in 2010. By 2020, that number is expected to reach $31 billion, thanks to leading companies such as Flipkart, Snapdeal and Amazon India (which together had 80% of the Indian e-commerce market share in 2015) as well as Alibaba and JingDong (which had upwards of 70% of the Chinese market in 2016), electronic payments are reaching massive new consumer populations.
Successful e-commerce companies, such as Snapdeal, have created a boom in online payments – and opportunities for thieves and online scammers.
Such costs include, among other expenses, the refunds that banks and credit card companies make to defrauded clients (many banks in the West cap consumers’ liability at $50 as long as the crime is reported within 30 days for credit cards and within two days for debit cards). This incentivizes banks to make significant investments in anti-fraud technologies.
Differed types of online frauds
There are numerous kinds of credit card fraud, and they evolve so frequently as new technologies enable novel cybercrimes that it’s nearly impossible to list them all but there are two main categories:
1. card-not-present (CNP) frauds: This, the most common kind of fraud, it occurs when the cardholder’s information is stolen and used illegally without the physical presence of the card. This kind of fraud usually takes place online, and may be the result of the so-called “phishing” emails sent by fraudsters impersonating credible institutions to steal personal or financial information via a contaminated link.
2. card-present-frauds: This is less common today, but it’s still worth watching out for. It often takes the form of “skimming” – when a dishonest seller swipes a consumer’s credit card into a device that stores the information. Once that data is used to make a purchase, the consumer’s account will be charged.
How does fraud credit card transaction work?
Credit card fraud often occurs because the credit card transactions are way…