Australia has one of the highest rates of contactless payments in the world. The ‘tap and go’ contactless payment, using a credit card, accounts for 75% of all transactions over $10 according to a survey by the Reserve Bank of Australia. The report also reveals that Australia has the most point-of-sale (POS) terminals per capita of all the Bank of International Settlement member countries. That’s 40,130 POS for every one million residents.
Contactless payments account for more than one-third of all retail transactions, whether it’s through contactless cards, smartphones, smart wearables or even Bankwest’s Halo ring. With surcharges and minimum purchase amounts slowly disappearing, contactless payments are the practical option for Australians, especially for small payments. Cash-only businesses are becoming less common and QR codes, considered ‘dead’ by many marketers, are making a comeback. But there are a number of risks involved with this type of payment method. Businesses must be cautious when adopting these technologies, ensuring they have the right protective solutions in place, to avoid compromising the security of their customers or their data.
Australia’s current technology-driven payment ecosystem reflects consumer demand and brings innovation to both consumers and retailers. This reflects a shift from defining payments as purely transactional to being part of the overall customer experience However, there are risks such as an increase in cyber fraud and data breaches as cyber criminals employ ever more sophisticated methods to break into companies’ systems.
Without the verification methods commonly used at point-of-sale, contactless payments present various security concerns and are more vulnerable to theft. But as online payment security improves through biometric technology, tokenisation, and more, criminals are turning their attention to other types of contactless payments.
Data breaches expose a high volume of customer data in one hit. Fake accounts and account takeovers impact both consumers and merchants.
To protect both themselves and their customers, merchants should regularly test their systems to detect any suspicious activities at the earliest stages. They should also be aware that mobile-first consumers will increasingly become prime fraud targets.
Cybercriminals will continue to find creative ways to steal user banking and card credentials so educating your consumers on the identification and the removal of mobile malware is essential to stopping these attacks before they damage your business.
Advancements in tokenisation has helped merchants address these threats, particularly when it comes to securing sensitive customer information and preventing chargebacks. Adopting tokenisation alongside comprehensive chargeback dispute resolution technology and end-to-end fraud prevention, is your best strategy for providing a frictionless and secure customer experience and minimising the burden of detecting and responding to chargeback fraud.
Mobile payments facilitate card-not-present (CNP) transactions and the increased risk is sometimes a new, unexplored threat for merchants who only previously processed card-present transactions.
When criminals gain access to stolen bank and financial information within frictionless payment systems and conduct unauthorised transactions, the consumer is entitled to the protection offered by a chargeback often at a steep cost to merchants.
Contactless payments increase the dangers of fraud and drive up the volume of chargebacks. To protect their customers and avoid revenue loss, merchants must continually update the security around their payment systems or suffer the consequences.