Credit Card Fraud Increases as Contactless Payments Grow Exponentially

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Credit Card Fraud Increases as Contactless Payments Grow Exponentially
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Contactless payments have risen dramatically since the onset of the COVID-19 pandemic. Loss prevention specialist CB911 warns of a probable increase in fraud as wrongdoers master this technology.

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Q2 2020 hedge fund letters, conferences and more

A Sharp Increase In Contactless Payments

Business owners have seen a sharp increase in contactless payments as more consumers turn to tap-to-pay, mobile pay, and other e-commerce options in the wake of COVID-19. VISA has reported over 100% increase in these transactions from year to year.

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Credit card companies are responding by increasing the allowable limit for these contactless payments. These transaction limit increases have gotten the attention of criminals who seek to take advantage of credit card and chargeback fraud, causing major consequences for consumers and business owners.

Customers’ contagion concerns have caused a dramatic increase in the use of these charging methods.

  • In the first quarter of 2020, Mastercard reported a 40% increase in contactless payment activity.
  • Visa’s contactless rate in the U.S. is up 150% year-over-year.
  • In Canada, Mastercard has more than doubled the allowable single-transaction amount. Similar increases are expected in the U.S.
  • So far, contactless payments are remarkably secure.
  • However, the technology is new and not hackproof.

The Growing Potential For Illegitimate Charges

Monica Eaton-Cardone, co-founder and chief operating officer (COO) of loss prevention specialist Chargebacks911, says that both consumers and merchants need to be aware of the growing potential for illegitimate contactless charges.

“As contactless transaction limits go up, we know from years of experience that fraud will go up as well. We urge consumers to be aware of their account activity, and merchants to keep a close eye out for unusual chargebacks, which may indicate that a contactless-payment account has been compromised.”– Eaton-Cardone

Entrepreneur, speaker, and author Monica Eaton-Cardone is widely recognized as a thought leader in the FinTech and eCommerce industries and a champion of women in technology.

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Jacob Wolinsky is the founder of ValueWalk.com, a popular value investing and hedge fund focused investment website. Jacob worked as an equity analyst first at a micro-cap focused private equity firm, followed by a stint at a smid cap focused research shop. Jacob lives with his wife and four kids in Passaic NJ. - Email: jacob(at)www.valuewalk.com - Twitter username: JacobWolinsky - Full Disclosure: I do not purchase any equities anymore to avoid even the appearance of a conflict of interest and because at times I may receive grey areas of insider information. I have a few existing holdings from years ago, but I have sold off most of the equities and now only purchase mutual funds and some ETFs. I also own a few grams of Gold and Silver
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