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Online fraud detection, prevention spend to surge

Kgaogelo Letsebe
By Kgaogelo Letsebe, Portals journalist
Johannesburg, 26 Jul 2017
Juniper research indicates that emerging markets, including African countries, are key targets for banking and payments fraud.
Juniper research indicates that emerging markets, including African countries, are key targets for banking and payments fraud.

Spend on online fraud detection and prevention (FDP) solutions in the eCommerce space is set to rise to $9.3 billion by 2022, an increase of 22% over this year's anticipated spend.

This is according to a new study from Juniper Research, Online Payment Fraud: Emerging Threats, Key Vertical Strategies & Market Forecasts 2017-2022 that found that the growing threat of insecure IOT (Internet of things) devices, along with the low awareness of effective solutions in the sector, are some of the drivers of the increased spend.

The study has further found that emerging markets, such as Africa and the Middle East, would become key targets for banking and payments fraud. "These markets (including Latin America and the Indian subcontinent) will account for only 4% of global FDP spend in 2022," the study noted, adding that stronger regulation to protect consumers, as well as better consumer education in safer online practices were key issues to address.

With credit cards being one of the most widely used online payment methods as they allow sellers to accept both local and international payments, local companies are making strides towards making online payments more secure.

Mastercard earlier this year introduced payment cards with biometric capabilities, which were first trialled with Pick n Pay and Absa employees. The system combined chip technology with fingerprints to verify the cardholder's identity for in-store purchases.

Local digital security company Gemalto, in June, introduced the Gemalto Assurance Hub that allows banks to assess every online banking session of users in real time. The hub is fitted with pre-integrated solutions to analyse a range of attributes and signals from the user and the device, such as geo-location, device profiling, IP address, device assessment and behavioural biometrics.

Similarly, CA Southern Africa has launched CA Risk Analytics Network, a cloud-based service neural network model, backed by real-time machine learning, to protect 3-D Secure card-not-present transactions. "It learns from, and adapts to, suspected fraudulent transactions in an average of five milliseconds, instantly closing the gap for potential fraud using the same card or device across all members of the network," the company said.

Both products are targeted towards the banking sector.

Meanwhile yesterday, the South African Banking Risk Information Centre released results of a 2016 study done on behalf of the country's banking sector found that credit card related card-not-present fraud increased by 18, 9% from the previous year and accounts for 66.8% of the losses relating to SA issued credit cards. "Consumers should avoid sending e-mails that contain card numbers and expiry dates, or disclose this information over the phone. They should also ensure that bankcards are registered for 3D Secure as a safety measure," said the bank in a statement.

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