UNDERSTANDING THE GROWING THREAT
Card Fraud poses significant challenges for financial institutions in today’s digital landscape, leading to severe financial losses and security risks. Despite underreporting and evolving fraud methods, industry reports estimate annual losses in the billions of dollars globally. Fraudulent activities, ranging from counterfeit card use to online scams and identity theft, continue to grow in sophistication, impacting various regions and industries indiscriminately.
MOST COMMON REAL-LIFE SCENARIOS
In the battle against card fraud, understanding the tactics employed by fraudsters is crucial. Here are some of the most prevalent methods in use today:
Card-Not-Present Fraud
Imagine receiving an email that looks legitimate, asking you to verify your account details. This is a phishing attempt. Once fraudsters obtain your card information, they can make online purchases without needing the physical card. This type of fraud doesn’t require much: just your name, account number, and security code. Often, the stolen information is sold on the dark web, leading to quick, untraceable purchases, which are then resold or returned for cash.
Cloned Cards
At a gas station, you swipe your card at the pump. Unseen to you, a device called a skimmer, which is discreetly fitted over the card reader, captures your card details. Fraudsters then use this information to create a duplicate card for their illicit use. Although EMV chip technology has made this more difficult, skimming remains a persistent threat.
Card Present Fraud
Here, the fraudster physically presents a counterfeit or stolen credit card at a store or ATM. Using various techniques, they manage to deceive merchants and withdraw cash or make purchases without raising suspicion.
NFC/RFID Skimming
As you walk through a crowded place with your contactless card in your pocket, a fraudster with an NFC/RFID skimming device intercepts your card information. This method doesn’t require physical contact; it simply captures the data from a short distance, enabling unauthorized transactions or identity theft.
THE REAL COST OF CARD FRAUD
Beyond the immediate financial losses, card fraud imposes significant operational costs. Banks and card providers must manage and resolve fraud reports, which involves considerable time and resources. When a card provider like VISA or MasterCard issues a card, they are responsible for handling fraud issues. Conversely, banks bear the brunt of resolving problems with debit and prepaid cards. The challenge is compounded by the volume of transactions, which makes distinguishing legitimate activities from fraudulent ones complex. Advanced detection systems and algorithms are essential to identify and respond to these threats in real-time.
XTN EMPOWERS BANKS AGAINST CARD FRAUD
At XTN, we are at the forefront of combating card fraud with our comprehensive solutions tailored for issuing banks. Our approach is simple yet powerful: we focus on real-time fraud protection and analyze user behavior to assess risk accurately. Through seamless REST API integration, we equip banks with the ability to instantly analyze risk scores, giving them the power to halt suspicious transactions before they traverse through card circuits.
Our solution excels in addressing key scenarios. Imagine this: a transaction occurs outside regular business hours, or the geolocation doesn’t match the cardholder’s usual location. Our system detects these anomalies and raises a red flag for further investigation.
And picture this: a customer swipes their card at a merchant’s point of sale. Our vigilant system closely monitors these interactions, flagging any suspicious behavior that could indicate fraudulent activity.
But that’s not all. We analyze transaction volumes and amounts, identifying unusual patterns that may signal potential fraud. By leveraging baseline data, we can swiftly flag transactions that deviate from the norm, prompting a closer look.
Let’s not forget about the power of lists. By cross-referencing Merchant Category Codes, card brands, and other key indicators, we bolster fraud protection, ensuring that only legitimate transactions pass through.
By harnessing these advanced functionalities, XTN empowers clients to detect and prevent card fraud proactively. Our commitment to innovative solutions ensures that banks stay one step ahead in the ongoing battle against fraud.
MOVING FORWARD: PROACTIVE PROTECTION
Card fraud is a relentless threat, but financial institutions can mitigate its impact with proactive measures and advanced technology. At XTN, we are dedicated to delivering robust solutions that protect transactions and safeguard customers’ financial well-being. We aim to create a safer financial ecosystem for everyone by staying vigilant and leveraging our expertise.
Contact us today to learn more about how XTN can help your institution combat card fraud. Protect your digital business from card fraud with XTN Cognitive Security®—avoid extra operational costs, prevent financial loss, and preserve your brand reputation.
