US firms increasing security spending as payment fraud rises

8 April 2014

A new survey from the Association for Financial Professionals (AFP) has revealed that firms in the US are increasing their payment security measures after a recent rise in credit card fraud in the nation.

The organisation polled 5,644 of its members and revealed that 60 per cent were exposed to an attempted or actual payment fraud in 2013. The study indicated that cheque fraud is still the most common issue, but that card fraud is increasing dramatically.

It was the second highest problem encountered by payment companies, cited by 43 per cent of respondents, indicating a dramatic increase from just 29 per cent in 2012.

Companies are taking a range of new approaches to resolving the issues they have with security, including introducing electronic signatures, payment data stored with third party vendors and increased layers of security.

The growth of card fraud in the US, which was highlighted by a number of high profile breaches, such as the incident experienced by retailer Target, he led to increased scrutiny.

Just under two-thirds (63 per cent) of AFP members questioned said they have adopted, or are planning to adopt, additional security measures.

Jim Kaitz, the chief executive of the organisation, explained that criminals are looking to stay one step ahead of the security measures being put in place. However, he noted that as potential liability for merchants is increasing, companies are taking a hard look at their potential vulnerabilities to fraud and cyber attack.

"This is especially important for big companies with complex systems, which are frequent targets for fraud," Mr Kaitz concluded.

The results of the survey follow recent calls from The National Retail Federation for the implementation of better card technology to provide added security measures.

“The technology that exists in cards out there is 20th-century technology, and we’ve got 21st-century hackers,” Mallory Duncan, general counsel for The National Retail Federation, told Reuters.

By Asim Shah

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