Electronic Signature Software Among Solutions to Payment Fraud
Credit and debit card fraud can be a thorn in the side of any business, but many large retailers have found themselves particularly struggling with the issue. Negligence is not the problem here, though, as these organizations are working hard to prevent theft. Instead, the complexity and scale of payment fraud-related challenges makes it difficult for retailers to protect customers. According to a recent study from the Association for Financial Professionals, credit and debt card fraud increased substantially in 2013, leaving many organizations turning to solutions like electronic signature software to overcome the problem.
The news source explained that while fraud prevention may be a priority for many retail organizations, the complexity and sophistication of attack types has risen so much that renewed efforts and advanced technologies are needed to properly protect consumers.
Looking at the potential threat of payment fraud
Like any other organization facing security challenges, retailers face an ongoing situation in which hackers and other perpetrators of fraud have all of the advantages. The analogy of a castle is one way to look at the problem facing retail organizations. Like a medieval ruler building walls, moats and towers, retailers can install firewalls, network monitoring and anti-malware solutions. However, individuals or groups trying to threaten a castle need only harmlessly explore the area for long enough, find any tiny flaw in the defensive plan, and exploit it. Similarly, hackers can constantly attack retailers in anonymity until they find the one tiny flaw that lets them in.
In the middle ages, leaders would turn to more intelligent methods of protection when walls and towers were not enough. One option was to use guards to authenticate that everybody walking around in the village, entering the castle and working around the fortifications were properly authorized to be present. This allowed rulers to identify strangers that may pose a threat and keep a closer eye on them, eliminating risk. Similarly, retailers can use solutions like e-signature technology to authenticate buyers and do a better job of ensuring that a person using a credit or debit card is, in fact, the individual he or she claims to be. Intelligence and authorization, not just technology, are becoming key to resolving fraud problems, and e-signatures can help.
Jim Kaitz, AFP's president and CEO, explained how criminals have the edge, but that some companies are taking major strides to overcome fraud.
"Criminals will try to stay a step ahead," said Kaitz. "But with potential liability increasing for merchants, companies are taking a hard look at where their own vulnerabilities lie. This is especially important for big companies with complex systems, which are frequent targets for fraud."
Considering the scale of payment fraud
According to the study, approximately 27 percent of respondents experienced an increase in fraud, while 57 percent witnessed the same rate of fraud attempts and only 16 percent saw a decrease. This contributed to an environment in which 22 percent of those polled said they anticipate benefiting significant from investments in fraud prevention solutions. Furthermore, respondents reported a significant increase in the amount of credit and debt card fraud experienced during the year. This includes issues pertaining to both corporate and consumer cards.
Using e-signatures to overcome fraud
The study suggested that many organizations are beginning to turn to more advanced tools, such as e-signatures, to prevent payment fraud.
E-signature technologies play a major role in preventing fraud by enabling organizations to authorize users more effectively and keep a more effective watch over transactions.
For more information on how to use e-signatures in fraud prevention, check out our webcast on e-signature technology in transactions.