The difference is by far significant, especially when the payment technology has grown so fast. The increased interest of criminal activities towards an industry that currently steals the spotlight should come as no surprise. What should amaze us, however, is the number of organizations that expose themselves to such business-disruptive threats by staying behind with the elders instead of going hunting with the youngsters.
Checks may have been a popular form of handling payments in the past, but in the digital age, the non-environmental paperwork load paired with the growing exposure to security breaches are a serious question mark in regards to their efficiency and viability.
So, the question rises- why is there a barrier keeping organizations below the curve in terms of modernizing the payment architecture? And, more importantly, is that barrier cost-determined and business-motivated- or simply psychological? Is trust still an issue that forces organizations to remain oblivious to the needs and concerns of their modern audience?
Let’s look further, at the second ranking fraud-trigger from last year. The spreading of business email compromise (BEC) cheats caused an impressive increase in the number of wire frauds. Up to 48% of companies were the target of wire frauds in 2015, as opposed to only 14% in 2013.
Even when fraud attempt does not result in financial losses, companies must boost investment in planning and sourcing for damage control. For the prevention of cyber-criminal activities alone, businesses must budget consistently to ensure data security and avert breaches that may lead to significant losses. Companies are becoming more and more picky in selecting the payment methods to integrate. While reluctance towards online payments is still argued by some merchants, the balance of power is weighing more and more in favor of e-solutions.
Sure, the online payments sector is not safeguarded from the intrusion of virtual criminals either. The Nilson Report for instance stated that card fraud losses reached $21.84 billion in 2015. The same source estimated card frauds to raise to $31.67 billion worldwide by 2020. Card fraud is mostly related to card not present transactions and is part of a complex identity theft cyber-wave that has gone rampant in the past years. What is however more reassuring in the virtual payments industry is that there are more layers of security a business can add to its infrastructure to strengthen its control grip.
With 62% of Americans foreseeing a cashless America in the near feature according to Gallup report, the migration to e-payments and CNP (card-not-present) transactions is progressing at warp-speed. Achieving digital maturity is core to catering for modern consumer expectations. But maturity in this context is not only related to understanding when to adopt change. It’s rather related to knowing how to adopt it in the most secure and cost-convenient manner.
There are several links that may fail in this chain of communication: inefficient transaction reporting and data management, weak know-how from employees who lack the training or experience, delayed reactions from payment providers or even banks that fail to approach the merchants’ needs and their sense of urgency in a holistic manner. All these have served as loopholes for cyber criminals to attack organizations and cause significant money losses.
Businesses are therefore pushed towards bigger thoughts- and bigger actions with regards to their payment structure. Are the current integration efforts and the maintenance costs in good standing with the 2020 gloomy fraud predictions, the proven inefficiencies of traditional payment methods and the growing expectations of customers awaiting 100% secure digitization? Or are there at a crossroads in taking a business decision that will make or break their compliance with e-markets?
One thing is certain: if companies keep allowing such loopholes in their systems, the risks of facing fraud damages and cleanup costs are growing by the hour.