Online payment fraud is a pervasive threat for everyone, who engages in business transactions using the Internet. Fraudsters work as hard as the financial institutions to succeed in their illicit goals. As new security measures are implemented to block online payment fraud attempts, cyber criminals launch greater attacks to break network security,using a wide range of methods that include sophisticated hacking tools and manipulative social engineering tactics.
The growth of online commerce and the high volume of monetary transactions executed daily on the Internet are avidly monitored by fraudsters looking for opportunities to siphon money into their own pockets. The convenience offered by Internet-based and mobile banking services is at times offset by the increasing number of reported cases of online payment fraud committed through these platforms. This situation keeps financial institutions and business establishments spending millions of dollars in their continuing effort to prevent their clients from being victimized by fraudsters.
Most Common Methods Against Online Payment Fraud
What you do not see from the reports of online payment fraud are the large numbers of malware attacks and phishing activities that were foiled by security systems. The degree of success in blocking fraud is best measured by the number of attempts that were foiled by the security and authentication systems implemented by financial institutions. Some of the most effective security methods are those that include the participation of individual account holders who can stop fraudulent transactions online in real time.
Financial institutions can prevent the execution of online payment fraud in real time through authentication and transaction verification procedures. Circumvention of these security measures can be difficult, though some security experts say that given ample time, cyber criminals with sophisticated hacking tools can be successful in bypassing the authentication process. For now, authentication systems work in preventing online payment fraud, and the best you can do at this point is to cooperate with the institutions that require verification and authentication for online transactions.
Transaction confirmation employing an out-of-band method is employed by some financial institutions to confirm the transaction details from account holders before approval is granted. Other methods that your bank may employ include one-time password (OTP) hardware tokens with PIN pads, electronic or an eGrid system that uses confirmation codes, and phone-based authentication. Among these security tools, authentication through phone calls or text messages is preferred by most account holders since it is the most convenient and for now, an effective means of confirming your identity and the details of your online transactions.
Phone-based authentication methods are effective in preventing online payment fraud, because it is extremely difficult for fraudsters to steal your credentials and at the same time duplicate your phone or intercept authentication calls. Security experts recommend its use in combination with a username and password for stronger, multi-factor authentications that put stress on clients, who resist the use of one-time passwords and codes. (?)
Awareness campaigns about online security and the implementation of stricter security measures that involve the participation of account holders can stop fraudulent transactions from happening. Fraudsters spend countless hours in their efforts to cheat you out of your money through online payment fraud.With the concerted efforts of financial institutions and individual clients however, more of these attempts can be stopped before damages are done.