As fintechs continue to grow and innovate, it’s important to be aware of potential threats that could harm your business or customers. One area of concern is card fraud, which can take many forms. Here are some common card frauds that fintechs should watch out for in 2023:
Skimming: This is a type of card fraud that involves the use of a device that is attached to a card reader, such as an ATM or gas pump. The device captures the card information and personal identification number (PIN) of the user, which is then used to make unauthorized transactions.
Card-not-present fraud: This type of fraud occurs when a thief uses stolen card information to make online or phone purchases without having the physical card present. This can be particularly difficult to detect, as the transaction is not taking place in person.
Card cloning: This is a type of card fraud that involves creating a duplicate of a legitimate card using stolen card information. The thief can then use the cloned card to make purchases or withdraw cash from ATMs.
Card trapping: This is a type of card fraud that involves the thief physically trapping the card inside a card reader, such as an ATM. The thief then waits for the victim to enter their PIN and removes the card, using the stolen information to make unauthorized transactions.
Card-present fraud: This type of fraud occurs when a thief physically has access to the card and is able to make transactions using the card and stolen card information. This can happen when a card is lost or stolen, or when a thief is able to steal the card information through means such as shoulder surfing or skimming.
To protect against these types of card fraud, fintechs can implement measures such as chip and pin technology, fraud detection algorithms, and customer education about how to protect their card information. It’s also important to have policies in place for dealing with fraudulent transactions and to ensure that customer data is secure. By staying vigilant and implementing the right precautions, fintechs can protect their businesses and customers from card fraud.