Feedzai’s latest Financial Crime Report shows that the shift to cashless transactions has continued to accelerate in the past few months. The quarterly report covers the period between April and July of 2021, and is based on an analysis of more than 1.5 billion transactions from all over the world.
In terms of numbers, Feedzai found that cash transactions were down 44 percent, while online transactions were up 109 percent, and now double the number of in-person transactions where the payment card is present. Feedzai attributed the trend to COVID-19, noting that people have become more comfortable with digital payment services during the pandemic.
“Millions more people experienced just how convenient digital payments and banking are when they couldn’t go to a bank branch or a restaurant or grocery store,” said Feedzai Global Data Science Senior Director Jaime Ferreira. “Cashless transactions are not the future anymore, they are today.”
The problem, of course, is that the spike in online transactions has coincided with a comparable increase in fraud rates. Feedzai found that online fraud card attempts went up 23 percent in the quarter, as fraudsters targeted the online spaces where people are actually spending their money. In that regard, purchase scams were the most common type of scam observed during the quarter, due primarily to the rise of online shopping. In a purchase scam, the victim buys a seemingly legitimate product online, but never receives the item that they paid for.
Social engineering scams, impersonation scams, and account takeovers were other common types of fraud. SMS phishing scams (aka smishing scams) also cracked the top five, with Feedzai attributing the increase to the growing use (and ubiquity) of mobile phones.
Feedzai encouraged consumers to use biometrics and two-factor authentication to protect their online and payment accounts. The new report arrives shortly after the company’s acquisition of Revelock, which specializes in behavioral biometrics.