Visa, the biggest U.S. credit card network, has witnessed an increase in in-person fraud this year as criminals return to the physical world of transactions alongside consumers emerging from COVID-19 pandemic seclusion, the company said today.

The pandemic, which began in early 2020, super-charged consumer use of digital payment options, including credit cards, for purchases online as people worked and played at home to avoid the deadly virus. That activity led to an increase in online crime, but the return now to in-store shopping and in-person transactions is boosting fraud and scams in those environments, Visa said in a press release Thursday.

Between June and November last year, San Francisco-based Visa said use of physical skimming devices that illegally capture cardholder data, like PIN numbers, more than doubled when compared to the prior 12-month period. The increase in card-present threats, including ATM and point-of-sale terminal skimming, will likely persist, Visa said in its press release.

“We are continuing to see high rates of skimming, growing over the already elevated levels of the winter of 2021, where fraudsters are jumping on the rise of in-person activity,” Visa Chief Risk Officer Paul Fabara said in the release.

That could mean more trouble as the yearend holiday shopping season gets underway. In-store sales started increasing faster than those online earlier this year, as consumers balked at delivery fees amid inflation and sought more social experiences after being cooped up for two years, CNN reported in June, citing data from Visa rival Mastercard.

Nonetheless, Visa maintained that the e-commerce environment, which ballooned during the pandemic, remains the chief target for criminals, with online fraud making up 75% of frauds and data breaches investigated by the company.

Losses from U.S. cybercrime nearly doubled to $6.9 billion from $3.5 billion between 2019 and 2021, Visa noted in a new report on the topic it published today, citing data from the FBI.

Cryptocurrency transactions are another sweet spot for crooks, Visa noted. “Beyond attacks on traditional currency, threat actors are employing new tactics to defraud cryptocurrency users, including new malware focused on browser extension wallets for crypto users as well as innovation in phishing and social engineering schemes,” Visa said in the release.

To thwart the criminal activity, merchants are buying into advanced security capabilities like digital tokens, deploying artificial intelligence tools and using enhanced authorization tools, Visa said. The card company offers some of those types of services.

By Lynne Marek on Oct 6, 2022
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