COVID-19 is reshaping how consumers shop online. But with the digitization of business services and products comes increased risk of fraud, hacks and scams. A record number of consumers plan to shop online and with smartphones this fall, according to a new report from Visa. And nearly half of these shoppers will spend money with local small and middle-sized businesses. With the surge of online spending, comes a wave of cybercrime targeting merchants and retailers.
Cybercriminals are exploiting the pandemic and see small and middle-sized companies as a fresh market, says Visa senior vice president Michele Herron.
“What we’re seeing is a lot of these [companies] that haven’t been needed to be digital are getting breached. It used to be that the criminals would go after the big enterprise sites, but they’re going after small business sites or startups” with time-tested scams.
A scam called “card testing” has increased dramatically in recent months. Criminals frequently purchase thousands of stolen credit card numbers on the dark web and illicit sites. They use software that can rapidly test up to 10 million different card numbers to find out which cards are duds and which will work.
Herron explains that criminals “find an unwitting e-commerce site, and then just pummel that site with transactions, trying to find the good cards that have active balances.” The working cards are resold for a premium.
As a result, small businesses are rapidly adopting cyberdefense systems. According to Herron, most of these systems use technologies like machine learning and contactless payment systems to reduce fraud and protect consumer data. “Businesses today have the tech tools to fend off scams as they’re happening, in real-time,” Herron said. “That’s pretty powerful.”