{"id":28229,"date":"2017-05-15T04:00:00","date_gmt":"2017-05-15T08:00:00","guid":{"rendered":"https:\/\/goebt.com\/https-blog-cdesolutions-com-2017-05-weighing-the-risk-of-alternative-payments\/"},"modified":"2025-04-02T14:51:23","modified_gmt":"2025-04-02T18:51:23","slug":"weighing-the-risk-of-alternative-payments","status":"publish","type":"post","link":"https:\/\/goebt.com\/weighing-the-risk-of-alternative-payments\/","title":{"rendered":"Weighing the Risk of Alternative Payments"},"content":{"rendered":"<p><span id=\"hs_cos_wrapper_post_body\" class=\"hs_cos_wrapper hs_cos_wrapper_meta_field hs_cos_wrapper_type_rich_text\" style=\"\" data-hs-cos-general-type=\"meta_field\" data-hs-cos-type=\"rich_text\"><\/p>\n<p><em><strong>With today\u2019s consumer, convenience is everything.<\/strong><\/em>&nbsp; The increasing demands for easier, more user-friendly ways to pay have fintech players working hard every day to find newer, faster, better solutions.&nbsp; However, as those in the payments industry work hard to make life easier for consumers, fraudsters are following closely behind looking for loopholes and weaknesses.&nbsp; This persistence keeps many payment processing providers, merchants, and consumers wondering whether taking advantage of alternative payment methods is worth the risk.<\/p>\n<p> <!--more--><\/p>\n<p><strong>Options are Growing<\/strong><\/p>\n<p>The number of alternative payment methods (APMs) is growing, and at a rapid rate.&nbsp; Consumer and merchant adoption rates are only driving further innovation and evolution in the payments space.&nbsp; Juniper Research reported that mobile wallet transactions alone are expected to increase to $1.35 trillion this year.&nbsp; What\u2019s more, digital wallets are dominating social conversation.&nbsp; Peer to peer payments are also becoming more popular, with nearly 100 million adults in the U.S. expected to use them in 2017.&nbsp; With alternative payment method use increasing, the use of credit cards is expected to decline.<\/p>\n<p><strong>Cards Have Increased Security<\/strong><\/p>\n<p>With the continuous innovation, has come much better security in credit and debit card usage.&nbsp; The EMV liability switch and security measures like P2PE have made it so that credit cards currently offer the best payment and identity protection.&nbsp; However, this heightened security in card-present transactions has caused many hackers and thieves to resort to fraud by means of APMs.&nbsp; Unlike fraud that involves a physical card, APM fraud is often much more difficult to track back to a perpetrator and usually hard to detect before the fraudulent transaction actually occurs.<\/p>\n<p><strong>APM Security is More Challenging<\/strong><\/p>\n<p>With alternative payment methods, there are many challenges to overcome in maintaining security for consumers and merchants.&nbsp; Unlike credit and debit card usage, fraud liability associated with APMs typically lies more with consumers.&nbsp; Although some APM providers like PayPal offer liability protection from fraudulent transactions, these protections are not legally required and are provided at the discretion of the company.<\/p>\n<p>Alternative payment methods also often allow fraudsters the ability to hide behind the technology when completing illegal or fraudulent transactions.&nbsp; APMs are typically used to commit fraud in the following ways:<\/p>\n<ul>\n<li>Funding digital wallets with another digital wallet to \u201chide\u201d the initial credit card information<\/li>\n<li>Using another APM after an account with an initial APM is shut down because of fraudulent activity<\/li>\n<li>Usage of an APM in a different country to make illegal or fraudulent purchases<\/li>\n<\/ul>\n<p>These types of fraud or illegal activity leave companies responsible for merchants or individuals that commit crimes using their platform or product.<\/p>\n<p>The other concern typically associated with alternative methods of payment is the amount of data and personal information stored in their systems.&nbsp; More and more hackers are hard at work every day trying to find a way to access the payment information of the millions of consumers who use this technology every day.&nbsp; APMs are becoming prime targets for cyber attacks and theft. Often, its\u2019s the same connectivity or easy-to-use features that allow fraudsters easy access to sensitive personal and payment data.<\/p>\n<p><strong>Addressing Concerns<\/strong><\/p>\n<p>Everyone involved in the chain of payments, including consumers, is left wondering whether the convenience of alternative payment methods is worth the risk involved.&nbsp; If you ask most fintech professionals, the answer is yes.&nbsp; Some would even argue that there are benefits to these new ways to pay, including:<\/p>\n<ul>\n<li>Elimination of the need to re-enter card and identity information, thus improved security for the consumer<\/li>\n<li>Elimination of financial or personal data sharing with sellers or individuals, also protecting the consumer<\/li>\n<li>Allowing businesses to break down barriers previous presented by card payments<\/li>\n<li>Increased rates of conversion and lower return rates<\/li>\n<\/ul>\n<p>Because keeping up with consumer demands is critical to keep businesses thriving, companies are advised to find a scalable balance between new payment method adoption and maintaining security for consumers and their own organizations.&nbsp; While these new alternative payment methods can be a great move for businesses looking to offer consumers the variety of payment options they desire, decision makers should remain aware of existing threats to cyber-security and ensure that security is top priority instead of an after-thought.<\/p>\n<p><\/span><\/p>\n","protected":false},"excerpt":{"rendered":"<p>With today\u2019s consumer, convenience is everything.&nbsp; The increasing demands for easier, more user-friendly ways to pay have fintech players working hard every day to find newer, faster, better solutions.&nbsp; However, as those in the payments industry work hard to make life easier for consumers, fraudsters are following closely behind looking for loopholes and weaknesses.&nbsp; This [&hellip;]<\/p>\n","protected":false},"author":244,"featured_media":28230,"comment_status":"closed","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"content-type":"","footnotes":""},"categories":[1],"tags":[227,205,218,217],"class_list":["post-28229","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-important-announcement","tag-best-practices","tag-industry-news","tag-security","tag-technology"],"_links":{"self":[{"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/posts\/28229","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/users\/244"}],"replies":[{"embeddable":true,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/comments?post=28229"}],"version-history":[{"count":1,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/posts\/28229\/revisions"}],"predecessor-version":[{"id":31238,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/posts\/28229\/revisions\/31238"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/media\/28230"}],"wp:attachment":[{"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/media?parent=28229"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/categories?post=28229"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/goebt.com\/wp-json\/wp\/v2\/tags?post=28229"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}