According to the survey, concern around the vulnerability of online payment transactions is leading to an increasing number of consumers abandoning it. These concerns affect user confidence - 54% said they worried about their vulnerability when purchasing products or making financial transactions online.
47% agreed that they would use online payments more often if they had reliable protection for financial transactions. 43% even admitted they have abandoned an online payment transaction in the past because it did not seem secure enough.
Ross Hogan, Global Head of the Fraud Prevention Division at Kaspersky Lab said, “Personal financial information is clearly valuable to cyber-attackers, who may be looking to exploit user details or even sell them to third parties for a profit. It is understandable that people are increasingly concerned about the risk of online fraud.
Banks should be putting robust solutions in place to provide their customers with confidence in the convenience of online and mobile banking. At the same time, banking customers shouldn’t be letting their fears get in the way of enjoying the benefits of making financial transactions online. By using an appropriate Internet security solution, they can take their own steps to protect their money from fraud.
But 11% of consumers do not currently use any security solution on mobile, tablet, desktop or notebook computers to protect themselves from cyber-threats. Banks should a help their customers to stay safe from online fraud. For example, the Kaspersky Fraud Prevention platform for banks proactively defends against the root causes of digital banking fraud, securing financial transactions on different user devices.
Some time ago I interviewed a major bank about credit card fraud asking why it did not take a stronger stance to prevent it. The answer, although sanitised and convoluted boiled down to two things.
First, the cost of credit card usage and merchant fees had a percentage built-in to cover fraud – and the merchants are doing nicely thanks.
Second, and more horrifying, is that banks were looking to move fraud responsibility back to the user – if it was not the bank’s fault. If the consumer’s negligence had contributed in any way – then it would not cover losses.
The Guardian stated “Clear rules state banks can only refuse to refund a customer if they acted "fraudulently" or had been "grossly negligent". There is growing evidence that the banks are taking a tougher line and refusing a refund – in some cases for the sole reason the thief used the card with a merchant the account holder had also done business with.”
I don’t know how far this has progressed in Australia but a quick search seems to indicate the Guardian is correct.
This also raises the issue of mobile device payments – currently Apple Pay and Samsung pay.
According to Newsweek US Apple Pay has become the target for fraudsters since its launch. Because Apple Pay lets users store credit card information on their smartphone – despite its robust security features – fraudsters apparently discovered that it is fairly easy to upload stolen credit cards to Apple Pay. Apple insists on a "frictionless" user experience and requires little in the way of verifying users are who they say they are.
Cherian Abraham, a mobile-banking consultant who advises an Android-based competitor to Apple called SimplyTapp, wrote in a blog post (worth a read) that as much as 6 percent of Apple Pay transactions may be fraudulent. That’s significantly higher than credit card transactions, which have an average fraud rate of 1 percent, according to Abraham.
I am sure that Apple and its banks are doing everything they can to minimise fraud. Currently in Australia only American Express has partnered with Apple.