Cyber Breaches Expose Vulnerabilities In Online Transactions

Cyber Breaches Expose Vulnerabilities In Online Transactions

Nearly half of all merchants, especially those involved in international transactions, faced customer loss and revenue decline due to cyber breaches that occurred during online transactions over the past year. These cyber breaches expose vulnerabilities in their systems, leading to significant financial impact. According to the PYMNTS Intelligence report, “Fraud Management in Online Transactions,” 82% of large merchants reported data and cyber breaches.

Cyber Breaches are an issue for cross-border payments especially, and the effect on customer trust is considerable. According to the article, the findings underscore the benefits of using external expertise and adopting advanced security protocols to beef up fraud protection and safeguard financial transactions.

Among the various strategies to counter cyber fraud, the use of third-party providers has seen the most success, however, the benefit of using external expertise and advanced technology may not be available or affordable for all businesses. Merchants who do partner with providers report a lower average failed payment rate of 8.5%, compared to 13% among those managing anti-fraud processes in-house.

The report found a need for stronger anti-fraud strategies and enhanced cybersecurity measures. Implementing two-factor authentication can substantially lower fraud rates and improve overall transaction security, a benefit for sellers and buyers. Only 53% of merchants use two-factor authentication at the transaction level, but its use appears to be key in minimizing payment failures.

Merchants that use a system in which customers must authenticate each transaction with a two-factor authentication process had the lowest failed payment rates at 10%. That method outperforms two-factor authentication at login or transaction confirmation notifications.