One to watch for retail businesses - new payment tech with lower fraud risk
We write a lot about problems with online security and new scams that people should be watching out for, so it’s lovely to read about someone who is focusing on a solution to help people.
After hearing how his mother-in-law struggled with online shopping during the pandemic due to a lack of confidence, a man named Justin Pike and his team has developed software that allows people to make online payments by tapping their card to their phone and entering their PIN, mimicking the process of card payments if you were shopping in person.
At the moment, shopping online means putting in card details, which can scare nervous shoppers due to the fraud risk associated with doing this, so this new tech will potentially make online shopping so much more accessible to those who feel nervous about doing so at the moment, especially the elderly and vulnerable.
How it works
Online transactions are categorised as ‘card not present’ (CNP) because people have to share details like their card long number, date, and security code when they want to buy something online.
In situations where people are buying items in shops, transactions are categorised as ‘card present’ (CP) because the buyer is physically presenting their card (or phone) to complete the payment.
The newly developed tech has been termed CPoI, which is short for ‘card present over internet’, because it’s so similar to the CP process used in shops, and won’t require people to type in any of their details, giving them a greater confidence and feeling of security in making purchases online.
Security
Due to the nature of CNP transactions and the need for the secure storage of data from the point of entering payment details, it is considered a more vulnerable method of payment, with UK Finance claiming that there were more than 2.1million cases of CNP fraud in the UK in 2023.
Cost to retailers
At the moment, payment processors charge retailers more money for CNP transactions due to the higher risk of fraud, so CPoI could be incredibly advantageous to online businesses, or those with an online selling presence, because its lower fraud risk could mean cheaper processing fees for sellers.
This has the potential to be beneficial all round, for online merchants, online purchasers, and those who haven’t yet felt confident to make their own purchases online but would potentially benefit from doing so. The creator of the tech hopes that it could start being used as an option for online payment before the end of 2025.
Definitely something to keep an eye out for!
You can read the original story on the BBC here
Further reading: Cyber criminals’ Christmas