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- 30.01.2020 08:30 am
The frequency of debit and credit card fraud has risen to unprecedented levels since the start of the pandemic. Even as many national economies falter from coronavirus, and millions of citizens struggle with job losses and debt, fraudsters haven’t stopped. Quite the opposite, in fact. It seems many have taken advantage of the disruption caused during the crisis to aggressively pursue fraudulent transactions.
According to data from Experian and the National Hunter Fraud Prevention Service, fraud rates across all UK financial products rose by 33% year-on-year in April 2020. Fake car and other asset finance applications saw the most extreme rise of 181%, while fraudulent payments through current accounts rose by 35%.
Meanwhile, US banking tech firm Fidelity National Information Services found the dollar volume of fraudulent credit and debit card charges has also soared 35% year-on-year during the same period.
Fraud is also on the rise generally. In the US, fraud losses reached $16.9 billion in 2019, a 15% increase on 2018’s figures. Going through the uncertainty of COVID-19 at the same time as such a negative trajectory means that cardholders, banks and businesses are all under intense pressure to find a sustainable and robust solution to payment fraud.
Evolving beyond passwords and PINS
Fortunately for consumers, many of the year’s fraudulent transactions were caught by global banks and financial services before they hit cardholders directly. However, this doesn’t deter from the fact that an ongoing spike in fraudulent activity still presents a big challenge for both consumers and banks.
What banks and card issuers need to do is instil a sense of trust – a level of confidence among their customers that they’re being protected in a proactive, rather than reactive, way. Sticking with the status quo can have an adverse effect even if you are able to catch the majority of fraudulent attempts. There needs to be a visible evolution from passwords and PINs, which have now become so synonymous with card and payment insecurity.
Therefore, it is vital that banks and payment providers act now to support their customers and develop a secure and convenient solution that moves payment security forward from these traditional methods.
Strengthening relationships and reputations
The good news is, there is already a more secure way to authorise transactions and safeguard our finances, in the form of fingerprint biometric payment cards.
Biometric fingerprint payment cards deliver end-to-end encryption, which secures the user’s card and data. Authorising payment cards with a fingerprint will also ensure that the card is secure as it can only be used by the owner, reducing the potential for fraud to occur.
At any time, this is a reassuring notion to the public, but right now, when consumers already have enough to fret about, it becomes a significant market differentiator. Card issuers and banks can simultaneously instil levels of confidence and relief in their valued customers, while offsetting the effects of a struggling economy. It is therefore a product that strengthens relationships and reputations at the same time.
However, time is of the essence, and tangible action is required now. By adopting fingerprint biometric payment cards, banks and card issuers can quickly attack the issue on four fronts: crime prevention, privacy, cost saving and convenience. Ultimately this method of authentication will offset the criminal challenge at hand, while also protecting end users.
Using fingerprint biometrics to proactively counter fraud
The challenge of fraud is met by linking the owner – physically – to their card via fingerprint authentication. End-to-end encryption further secures that card and person’s data to make an unequivocal connection between person and object. When combined these two aspects ensure that criminal misuse or fraud is not an option, providing banks with a proactive cost saving element.
Importantly, biometric fingerprint cards also provide consumers with very high levels of privacy, as their fingerprint data is held securely on the biometric card, not in a shared database. The card owner’s fingerprint image is immediately transformed into an abstract biometric template, which is then matched and stored in the card’s secure element (SE). Therefore, the full fingerprint image isn’t stored and the data never leaves the card.
For consumers, the financial benefits of not being defrauded are obvious, but for providers too, fingerprint biometric cards can be kept for longer than traditional cards to offer a layer of enhanced ROI. Importantly, fingerprint biometric cards boast convenience through the sheer speed and availability of transactions that these cards provide. When paying for goods, consumers want a transaction process that is fast, frequent and free from hold ups.
Biometric payment cards offer that security and speed, as they are no more complicated to use than tapping a contactless payment – which shoppers are long used to. In fact, touch-free payments have recently become second nature for consumers to tap their card to pay for goods and services instead of using cash or punching in a PIN to minimise the spread of coronavirus.
Even more than that, increased authorisation with your fingerprint will secure the payment card, removing the need for PINS and reducing the need for the contactless payment limit, all making the transaction process faster.
An extraordinary time calls for extraordinary innovation
On their own, in ordinary times, fingerprint biometric payment cards would be seen as an innovative step forward in the financial landscape to make consumers’ lives easier. But we’re not in ordinary times. Consumer pressure points, fraud rates, and the implications of financial breaches certainly aren’t ordinary. Therefore, the reaction must not be ordinary either.
It is time to fight back with an innovative and extraordinary solution to protect consumers from fraud. Biometric fingerprint payment cards are the way to do that.