liabilities in our pockets

On the Internet, Nobody Knows You're a Dog

In the summer of 1993, The New Yorker published Peter Steiner’s cartoon On the Internet, nobody knows you're a dog. The cartoon, famous for privacy on the net, is of interest to bankers offering frictionless digital payment experiences which do not go along with anonymity.

Seamless and frictionless payments are helping businesses grow faster and create better customer experiences, like Amazon one-click purchases, Uber’s mobile app payment solution or PayPal’s wide acceptance online. 

Alas, more convenience comes with a price. The constant development of new and better technologies is creating a higher risk of fraud in the payments industry as it is becoming easier for criminals to steal and forge someone's identity, the most valuable currency in the industry today. 

Frictionless payments create problems for merchants, too. Data breaches are becoming more common and the costs they incur are rising, not only in customers lost but also in customer (re)acquisition, which skyrockets each time a data breach occurs.

The rise of e-commerce and mobile payments has opened up new possibilities for criminals. Data is now stored in different places and since many have not been utilizing omnichannel to its full extent, the management of data alone has turned into a heavy workload.

All the while, criminals are uncovering weaknesses and creating new types of attacks, such as transaction laundering. This does not mean the old kinds of attacks have disappeared. To the contrary, skimming POSs and ATMs is still present, and getting new variations. 

The convenience vs. fraud prevention still remains the biggest issue in the payments industry, whose focus is now on authentication. As of January 2018, the EU is making the implementation of Strong Customer Authentication mandatory in order to protect customers, merchants and financial institutions. How this will affect sales is, however, still an open question.