Virtual Debit, Mobile Tools Help Banks Fight Fraud

A new year has begun, but the pandemic continues to throw financial and operational curveballs at banks, businesses and their consumers regarding how they conduct daily tasks or routine payments.

Financial institutions (FIs) and payment players are now facing questions not only about how they can satisfy their customers after long months of constant change but also about which of these changes will remain once the health crisis has passed.

This includes shifts in which consumers are shopping and paying, and in the payment tools or methods they are using to finalize their transactions. Studies showed that many consumers in the United States have begun tapping their debit cards more often for payments, for example, with one report finding that debit use rose about 6 percent year over year. Another study found that 55 percent of U.S. consumers now count themselves as “debit-centric” users, a sizable jump over the 33 percent who said the same about credit cards.

Fraudsters have unfortunately also carefully followed this payment trend, with skimming, prepaid card and ATM fraud all seeing upticks recently — especially in regard to debit transactions. One skimming attack in North Carolina resulted in the loss of $5 million, for example, and instances of prepaid debit card scams and targeted ATM fraud are also skyrocketing. It is therefore critical for FIs, payment providers and businesses to monitor how consumers are tapping debit as well as how they can keep this payment method secure.

The January Next-Gen Debit Tracker® analyzes how the continuing pandemic has affected consumers’ debit use and other spending behaviors as well as the growing threat of debit-related fraud. It also examines the tools that FIs can use to stem the rising tide of fraud as well as how features such as contactless or peer-to-peer (P2P) payment tools factor into this changing environment.

To read the full article on PYMNTS.com, click here.