Customer convenience is crucial to businesses, especially since this makes or breaks sales. The more options buyers have, especially at checkout, the more likely they are to complete a transaction and return to do further business. That’s why many companies like yours have digital wallets. Still, with the recent rise in stolen credit cards used in digital wallets, many are also rethinking them.
The Traditional Way We Use Digital Wallets
Digital wallets let users send and receive money instantly, make international transfers, and track expenses. While they’re also known for their safety, as they require verification with a PIN or fingerprint, hackers are quickly finding ways to get around this.
The Unauthorized Way Hackers Use Digital Wallets
A group of cybersecurity experts at the University of Massachusetts and Penn State found that digital wallet security breaches lead to flaws in authenticating an individual during online card usage. In doing so, it incorrectly grants authorization and access to hackers. The stolen and even canceled credit cards used in digital wallets pave the way for fraudulent digital wallet transactions.
For instance, imagine an attacker swipes a user’s physical credit or debit card or manages to collect the numbers elsewhere, such as during phishing or another cyberattack. The hacker collects enough data to pretend to be the cardholder, including the first and last name and primary account number. They even run the victim’s name through online databases to find addresses, phone numbers, and more.
Since each digital wallet asks for different credentials when adding a card, the hacker then sifts through the options until they find one asking for the information they already have, like a zip code. From there, the cybercriminal chooses knowledge-based authentication rather than multi-factor authentication, which includes a one-time code or password rather than validation through scans and fingerprints.
The Effects of Stolen Card Misuse on Digital Payment Systems
Upon noticing unauthorized transactions on your company’s bank statements, you may lock or freeze your card to keep third parties from gaining access. However, even a canceled or replaced card won’t keep the stolen credit cards used in digital wallets from being utilized.
When a bank issues a new card, the digital wallet receives a token that the hackers use to make purchases and reassociate the new card with the account. So, attackers can still access and use them, making unauthorized wallet charges at your expense.
Keeping Your Business Funds Safe
Illegally used credit card information can leave your business paying for transactions your employees didn’t make. So, while many of these providers, like Google, work with banks to address these issues, there are some things you should do as well.
For instance, turn on push notifications for your wallet and bank apps and make it so token management needs constant authentication. Also, banks should check for correct labeling on recurring transactions.
Credit card theft and digital wallets do more harm than good without proper security measures. So, learn more about stolen credit cards used in digital wallets and take appropriate preventative measures today!
