It is no secret that online fraud attacks are sharply on the rise, nearly 140 percent over the last year.
It’s the unfortunate byproduct of EMV credit cards foremost, but consumers can also blame vulnerabilities in mobile commerce and aggressive hackers anxious to pounce on the penetrable card-not-present channel.
According to a recent whitepaper from payments news website Pymnts.com, predictable targets include digital and downloadable goods, online luxury items and electronic goods.
Surprisingly, attacks on online food and beverage merchants have escalated 116 percent between Q2 of 2015 and Q1 2016. Additionally, online clothiers have seen a reduction in fraud to the tune of 19 percent.
Online Fraud Attacks are Coming Fast
There was a very telling chart in the Pymnts.com whitepaper, revealing the increase in fraud losses cutting into merchants’ revenue, with digital goods suffering the worst losses.
Category Q1 2015 Q1 2016
Digital Goods 0.6% 10.6%
Clothing 3.1% 7.2%
Electronics 2.9% 3.9%
Food & Beverage 0.3% 0.4%
Luxury Items 4.9% 9.5%
The Preferred Attack Method: Botnets
There is some good news in the Pymnts.com study: It found that friendly fraud, the act of purchasing something online then filing a chargeback with your credit card issuer, is down from Q1 2015 to Q1 2016. Conversely, Botnets, computers released and controlled by fraudster, have become a very popular online fraud attack method: 79 percent of attacks in the same time frame were caused by botnets.
Botnets, says ComputerWorld.com, mostly lie in Windows operating systems. There are no known cases of botnets in Mac OS X or Linux systems. For merchants insistent on using Windows, the best defense is knowing basic safeguards:
- Do not open any attachments from unfamiliar sources.
- Take special note when receiving Excel, PDF and DOC files – which are conduits for botnets.
- Have you received notice of a security patch? Log on to the platform’s website and make certain there is an announcement regarding so. Then load the patch.
- Keep administrator privileges to a minimum number of trusted users.
An Obligation to Our Merchants
As a merchant account provider of e-commerce businesses, Instabill feels obligated to remind its network of merchants of the growing threat that the e-commerce industry faces.
For better or worse, online fraud attacks is a regular subject on the Instabill blog.
Has your online business ever suffered an attack? What was your solution? Leave a comment below.
