Wave Systems Corp. (fka WAVXQ)

[Genz2]

eCommerce credit card fraud is nearly an inevitability

https://www.helpnetsecurity.com/2019/01/31/ecommerce-credit-card-fraud/?_lrsc=69800179-36ab-405a-933c-9b65c8df6afe&cm_mmc=OSocial_Twitter-_-Security_Security+Brand+and+Outcomes-_-WW_WW-_-Elevate&cm_mmca1=000034XK&cm_mmca2=10010257

Riskified surveyed 5,000 US-based consumers aged 18 and older about their online shopping behaviors, experience with and prevalence of credit card fraud, repeat shopping likelihood and customer satisfaction to develop a full picture of how consumers react to a number of common shopping experiences.

The results are worrisome for both consumers and merchants, as roughly half of respondents reported experience with credit card fraud and 30% had their purchase wrongly declined, with a corresponding negative impact on their satisfaction and return shopping.

For US consumers, eCommerce credit card fraud is nearly an inevitability. Overall, 49% of consumers surveyed reported having been a victim of credit card fraud, where their card information was illegally used by someone else. But that percentage grew with age, suggesting that becoming a victim is only a matter of time. Among all respondent groups aged 31 or older, a majority of consumers were the victims of credit card fraud.

Unfortunately for merchants, the obvious costs of fraud aren’t the only costs. 49% of customers reported that they do not return to an online retailer after a fraud incident has taken place, meaning that the merchant will pay the cost of the fraud and lose future customers.

But that’s only part of the cost of fraud. Merchants often decline orders out of caution, and previous research conducted by Riskified found that fear of fraud costs even more than the fraud itself, as merchants unnecessarily reject good customers. This survey bears that out, as 30% of respondents reported having an order declined, and 57% of those declines happen to returning customers, squandering the good will merchants had built. The survey further found that roughly 42% of shoppers who experienced a decline moved on, either abandoning the purchase completely (28%) or shopping with a competitor instead (14%).

Even shoppers who aren’t declined may move away from a purchase. 84% of respondents reported abandoning an order before completing the purchase, with many of these shoppers blaming the checkout process. 37.3% abandoned a purchase because of a complicated checkout, while 34.9% blamed a bad mobile experience.

“It’s really difficult for any single retailer to effectively manage their fraud, and this survey shows just how damaging it is when they fail to do so,” said Eyal Raab, vice president of business development. “Merchants need to be able to meet their customers where and how they want to shop, but offering options like omnichannel fulfillment or digital gift cards opens them up to threats. Making accurate decisions and approving good orders not only increases revenue now, it also makes happier, more loyal customers in the future.”

Impact of household income on fraud and reimbursement:

•48% of households with an annual income of $1M or more have reported legitimate purchases as fraudulent. This was by far the highest level of false claims of fraud, with no other income bracket even reaching 40%.
•Meanwhile, lower income households were least likely to be reimbursed for charges fraudulently made with their cards. Only 35% of lower income households were refunded the full amount of the fraudulent activity.

Customers blame merchants for fraud:
•Among victims of credit card fraud, more than 1 in 4 (29%) blamed the merchant that approved the fraudulent purchase.

Friction leads to cart abandonment:
•Cart abandonment continues to be a big problem for merchants, and 84% of survey respondents reported abandoning a purchase in progress.
•While some of that is unavoidable for merchants – unexpected shipping costs and a change of heart led to significant cart abandonment – a difficult checkout process is often the culprit. More than 71% of cart abandoners blamed the checkout process – for being overly complicated, not mobile optimized or seeming untrustworthy – as the reason they abandoned their purchase.

Shoppers watch their wallets:
•38% of respondents admitted they have or may have created multiple email addresses to gain additional online shopping discounts. While not illegal, this type of discount abuse can seriously impact merchants’ bottom lines.
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The article below is a great solution to big problems revealed in the article above! The current solutions are not taking care of the problems as evidenced by this article. The market should be ready for a solution like Wave's and Bell Id's (Bell Id was bought out I believe, but the new company still could be a part of a great solution with Wave)!
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Wave and Bell ID Partner to Combat Online Payment Fraud

https://www.wavesys.com/buzz/pr/wave-and-bell-id-partner-combat-online-payment-fraud

card-present transactions enabled for E-Commerce by integrating TPM technology.

Lee, MA -

July 31, 2014 -

Wave Systems Corp. (NASDAQ: WAVX) announced it is partnering with chip lifecycle management solutions company, Bell ID, to offer a joint solution aimed at reducing online payment fraud. The solution will be marketed primarily to card issuing banks, as well as online merchants, governments, and enterprises worldwide.

Using Bell ID’s Trusted Service Manager and Secure Element in The Cloud (SEiTC) server, alongside Wave’s ERAS for TPM management and Wave’s endpoint identity and monitoring expertise, the combined offering provides robust protection for transactions and stored payments. The companies have executed a letter of intent and anticipate the signing of a definitive agreement in August.

The incident rate of card-not-present (CNP) fraud has been growing steadily over the past several years. According to a recent FICO Banking Analytics Blog, CNP fraud now accounts for close to half of all credit card fraud. Countries that have already adopted the EMV® card specification have seen CNP fraud rates increase. In the United States, CNP fraud is expected to rise significantly over the next eighteen months, as the EMV standard is put into effect. The EMV directive, which implements a global standard for a secure chip-based payment application, will make merchants liable for any fraud resulting from transactions on systems that are not EMV-capable.

“Wave’s robust product portfolio is very complementary to Bell ID’s strongly positioned solution set in the financial services market,” said Bill Solms, CEO, Wave Systems. “We see the EMV transition creating high demand for more secure transaction capabilities, and are confident that together we can provide financial institutions with a comprehensive solution for payment authorization and storage.”

“Bell ID has been a pioneer in developing and delivering cloud-based payment platforms,” adds Pat Curran, Executive Chairman at Bell ID. “We also have extensive experience in delivering EMV solutions globally and have witnessed fraud transition online as point-of-sale terminals in face-to-face transactions become more secure. We are therefore delighted to extend our offering with Wave to provide a secure online transaction and storage payment solution, which will mitigate against an expected rise in online fraud and provide a trusted link between device identity and internet services.”