Using a credit or debit card for a purchase has its pros and cons. It may either help when handled properly or become a detriment if not used wisely, advised by the Payza’s CEO, Firoz Patel. Fraud related to credit and debit cards is at a very high level despite new security protections implemented by credit card companies.
While consumers are trying to keep themselves away from the current ways, the tricksters will always come up with new techniques; use of Bitcoin transactions is one of such nowadays.
How is the use of Bitcoin helping Debit & Credit card Fraud?
Bitcoin is a virtual digital currency used to conduct electronic transactions by sending Bitcoin to each other over the Bitcoin network all the time. Bitcoin is a decentralized currency controlled by no one and unless someone keeps a record of all these transactions, no-one would be able to keep a track of who had paid what.
This provides ideal opportunity to cyber crooks to take full advantage of it and use Bitcoin to aid them with their credit card fraud.
How does it work?
The analytical team of Payza demonstrates it well with the help of the example mentioned below:
Who validates that person A has sent 1 Bitcoin to person B?
Who stops person A from also sending that Bitcoin to person C?
The answer is Bitcoin miners: “a set of people who perform it all and charge a commission fee to provide services for all the completed transactions.”
As the value of Bitcoin has gone up significantly, more people have seen mining as a potential business. Not too many legitimate companies are currently trading in Bitcoin but it is definitely catching eye of many.
How is it a threat?
The companies who wish to use this payment system need to open an account using their personal details. These details can be used later fraudulently to perform malicious tasks and potential fraud. Also as this is a relatively new payment system and so not a lot of people are completely aware of it. This not only leads to consumers paying high commission fee in lieu of the service but also agreeing to avail it at a very poor exchange rate.
As per Firoz Patel, fraud is usually an outcome of ignorance and lack of knowledge leading you to share your personal details with a system which is untrusted.
“Fight The Problem – Not Each Other”, is the key to eliminate a problem. Whether it is about a successful marriage or to minimize business fraud says Payza’s CEO, Firoz Patel. Scam could shake and destroy any individual or business if corrective measures are not in place.
Everyone in the industry is responsible for sharing the burden of fraud and playing their part to fight against it. “Rightly said by someone; it takes two hands to clap!” One individual or organization cannot be solely blamed for anything and so the blame game between a buyer and a seller is neither the solution nor the option to stop it.
What Can Stop It From Happening?
Compliance and Fraud detection plays a key role in ensuring it does not happen; they go hand-in-hand. While being complaint helps you to minimize risk, detecting potential fraud lets you prevent it from happening.
- Benefits of Being Compliant- Companies following guidelines and working on a compliant platform are far more away from any reputation damage and risk exposure.A fraud detection mechanism allows you to be prepared with required control measures. With the Fraud Prevention technology and in-house compliance strategy, Payza has been recorded with consistently lower fraud risk numbers than reported at an industry level.
- Benefits of Detecting Fraud – Controls, monitoring and reporting promote faster detection of fraud. Key detection measures include a raising alarm policy, reports designed to highlight potential and common indicators of non-standard outcomes over time, and other controls that alert people to potential fraud. It goes without saying that monitoring these indicators is as important as the implementation of these.
Having talked about what can stop it all, we should not forget: “The bigger prospects for industrial growth and high revenue, brings more opportunity for fraudsters”.
So, What’s Required?
Everyone in the industry has to be committed to adopt all the current anti-fraud practices. The entire system has to co-ordinate in factoring fraud or scam prevention into commercial, technical, and operational process as standard. While the business sector growth demands for higher investment, it becomes imperative to be prepared for increased activity in setting up anti-fraud standards.
What Can Help?
- The identification and potential risk factors to which systems or procedures are exposed
- Positive implementation and reliable operation of internal controls
- Establishing an environment that promotes compliance with internal controls
- Promoting fraud awareness
- Fostering an ‘anti-fraud’ culture
As per Firoz Patel, scam and fraud happen due to loop holes in a relatively weak system or lack of control measures. While elaborating it more, he talks about Fraud Prevention & Security Team of Payza which works efficiently and effectively to minimize risk in the current climate.
Their endeavor is to support global standard alignment as an industry and also investing the right amount in protecting against fraud.
Yes it’s possible: preventing you from being a victim of online business fraud via financial scam trickery and other stealthy actions. While usage of internet for e-commerce has been increasing substantially, it has brought in successful payment processors such as PayPal and Payza consequently used by millions of customers, both for individuals and businesses in the market.
Hence, it is very important to be thinking one step ahead and putting on your gumshoes to dig deeply to be away from being a victim of any online cybercrime or latest business and internet fraud. Firoz Patel, a successful Canadian businessman and co-founder of a global payment processor who has his recent venture Payza (a global payment processor) successfully capturing the market has shared his thoughts guiding to use a secured gateway.
What to believe in?
As per Firoz Patel, complaints and applauds go hand-in-hand. While you see great reviews being posted, you will also find negatives spread for an organization. Neither the reputation, nor the apparent track is enough, aptly said by the Payza’s CEO, Firoz Patel. Complaints made against an organization are falsified at times and are nothing but a conspiracy by the competitors to spoil the image. You have to go way beyond that to really investigate the operations of the organization and find out if what is claimed is real.
What to do?
Payza has recently formed an alert & awareness team to spread awareness amongst consumers. Besides, various steps they guide you through to be protected and secured, they strongly intend you to be aware of the tricks and stealthy actions that are being commonly used to make a consumer fall in to it. One of the most important ones used nowadays is called “Ponzi Scheme”.
This scheme refers to a financial scam that pays returns to early investors using money put in by later investors. Victims are often attracted by promising and high returns at no risk. Payza, as an organization not only wants the consumers to be protected against such a fraud but also demands strongly for some strict actions to be taken against the organizations following such practices.
“Although prevention is always better than cure, detection would be more important as it always keeps you a step ahead”, aptly said by the Payza’s CEO, Firoz Patel. In one of the recent interviews held he talks about the significant increase in fraud due to a rapid growth of online and digital era.
As per him, online fraud and identity theft have increased with the growth in technology, so we need to identify and detect the root cause to safeguard ourselves against cybercrimes. Unless we are unable to detect what causes it, we can never put a hold on the rise of the scams in today’s economy.
As he announces the launch of “Fraud Prevention Team” of Payza globally, he also talks about 3 major tricks used by cyber crooks to commit fraud nowadays.
- Internet Fraud: As the usage and reliability of internet and other forms of electronic media to conduct transactions is increasing; illegal activity using the same media is similarly on the rise. So, to cap down all the knowledge about internet fraud is very important to prevent yourself from being a victim of it.
- Identity Theft: With the alarming rise in spam and identity theft, the safety of the personal information is utmost important as it could result in serious consequences for the victim. Identity theft is when someone anonymously uses your personal or financial information to pretend to be you to obtain personal gain.
- Credit card Fraud: This refers to the unauthorized use of a credit or debit card (or financial information) to fraudulently obtain personal gain at the expense of a victim’s assets. According to Firoz Patel, indictment for a credit card is increasing and you should prevent yourself from such cyber-attacks.
What to do?
“Trust lesser, verify more!”
- Protect yourself by avoiding or not sharing your personal and financial information over anonymous phone calls and online gateways
- Use 3D password secured methodology for any online transaction
- Investigation and use of common sense is not just necessary but a mandate
- Memorizing your passwords rather than saving is the key
As per Firoz Patel, indictment for personal and financial information is at peak and so watches out for regular patterns used by tricksters and use the armor of technical device to be protected.
Digitalization is changing the world and impacting all our lives. Be it at work, while shopping or availing of services, we are all becoming more and more dependent on technology. The recent strides in technology such as cloud based services and big data, advanced analytics and machine learning have created tremendous opportunities for businesses to grow. The financial services industry especially has been impacted by technologies such as robotic process automation. Since a majority of tasks performed in financial services are rules driven and repetitive there is tremendous opportunity for using automation to cut costs, improve efficiency and reduce human error rates.
Compliance And Fraud Detection Rise In Priority
The banking industry is not far behind. Banks are seeing an increasing thrust on digitalization with consumers demanding more and more online services. Unless banks are able to upgrade their services and upgrade quickly they are at risk of losing their customers. Technology is expected to contribute in the finance services industry on all fronts but the most important of all is probably in the area of compliance and fraud detection. As per Payza founder Firoz Patel, scams and data thefts are some of the biggest problems being faced by the financial services industry today. Last year’s World Payments Report also reiterated the importance of using technology for compliance and fraud detection.
Banks are increasingly feeling the pressure to digitalise processes such as compliance tracking, fraud detection and also prevention of fraud. The growing risks in cyber security have created an urgent need to use more advanced techniques and methods to keep cyber criminals and fraudsters at bay. The latest trend is to use machine learning to detect patterns in online criminal behaviour and thwart an attack before it occurs. The recent Mirai bots attack used to bring down Dyn servers is an example of how easily criminals can manipulate and control online systems. While these attacks did not impact the financial services industry, they serve as an early warning system of the kind of threats we could face in the future.
One solution is for banks and other financial institutions to come together and make a collaborative attempt to ensure compliance and fraud detection measures are taken as their services become increasingly digitized. This common front is probably the only way to keep pace with fraudsters and hackers who are always coming up with new means to break through systems, steal data or cause other damages.
While digital currencies have been around since the early 90’s, not many people were aware of them. However, now with increasing digitalization of financial systems and the growth of third party payment processors, virtual currencies have once again started gaining popularity due to Bitcoins. Bitcoin is a decentralized virtual cryptocurrency that functions on a peer to peer network. It was originally created by Satoshi Nakamoto whose real identity is not yet known. According to one estimate, there are more than 12 million bitcoins being used in circulation at this time.
One of the benefits of virtual currencies is that they are not limited to borders and they do not depend on any banking system. In that sense, they are also unregulated money. Regulations for bitcoins can vary by country. Many payment platforms support bitcoins and allow you to send and receive funds using this virtual currency thus bypassing traditional banking systems. In recent times, there has been considerable discussion regarding their use for criminal activity. According to Payza’s Firoz Patel, fraud transactions are one of the biggest issues being faced by the payment industry and legitimate companies today. Bitcoin transactions are increasingly being associated with credit card fraud.
Bitcoins And Credit Card Fraud
When bitcoins are purchased with a credit card, it can be considered to be similar to a physical cash withdrawal from the card. Thus, as you hand over the physical cash or bitcoins to the other party, the transaction is complete. In case the credit card transaction is reversed, then the party that has handed over the bitcoins is at a loss as you cannot get your bitcoins back.
Bitcoins are liquid and can be used to procure other currencies that are of immediate use. Thus bitcoin traders could be targets of credit card fraud. Bitcoins are typically traded on thin margins. Thus in case of fraud, the party selling the bitcoins takes a bigger hit. Also note, bitcoin payments are usually irreversible.
The Road Ahead
As bitcoins continue to grow in popularity, there are bound to be some regulations and course corrections in this space. Security issues around bitcoins and other digital currencies are expected to be resolved through the development of better technology and systems and more compliance guidelines. The disruption caused by digital currencies is likely to shake up banking systems of the world and create an imperative need to take measures to control the misuse of this currency for fraudulent purposes.
In today’s highly connected online world, it is inevitable for businesses to establish an online presence. With increasing digitalization more and more business is being conducted online. However, online business comes with it’s own set of risks. You need to take steps to protect your online business from fraudsters. The true cost of a bad transaction consists of lost merchandise, profit loss and bank fees. The cost of shipping, sourcing and managing chargebacks has also to be considered while determining impact of fraud. Thus, fraud can lead to considerable losses. According to Payza’s Firoz Patel, indictment is very difficult in case of internet frauds hence the best option is to have a solid cybersecurity strategy in place.
Internet Fraud Warning Signs
These are the warning signs that can help you detect an internet fraud:
- First Time ShoppersToo many new accounts may suggest criminal activity as fraudsters are always trying to test credit cards on unsuspecting sites. Most online shoppers have a shopping history. You should look out for users who create email accounts only to purchase with stolen credit cards. These credit card numbers are usually obtained via spam and identity theft.
- Suspicious Orders
If there is a large order it could be a fraudster trying to make as much as possible of a single order. The fraudster may be using a stolen credit card and the credit card may get cancelled at any time hence the rush to maximize utilization of the card via a single large order.
- Out-Of-The-Ordinary Shopping
Fraudsters are always trying to rush their orders as the real card holder may cancel the transaction. Thus ‘overnight’ shipping orders may be indicators of fraud. While increase in number of global customers may mean business growth, it can also be an indicator of online organised crimes or purchases made from stolen credit cards.
- Non-Matching Data
Always be careful of non-matching data points. It there are multiple accounts and credit cards sharing the same shipping address it could be a single user using many stolen credit cards. Multiple accounts and shipping address that share a single billing address may indicate organised criminal activity. You should be careful of orders with difference in billing and shipping address, telephone area codes and zip codes and orders at odd times of the day.
- Too Many Credit Cards
Look out for any transaction with more number of credit cards associated with a single IP account as it may mean fraud.