Fewer online card frauds since new payment checks introduced, says Nationwide

People shopping online may find they are asked to verify a purchase via text message more often when they get to the checkout under industry changes.

09 May 2022

Britain’s biggest building society is seeing around 2,000 fewer cases of online card fraud per month following the introduction of new industry payment checks to protect shoppers.

The strong customer authentication (SCA) requirements were fully rolled out in March.

Because of these, people shopping online may find they are asked to verify a purchase via text message more often when they get to the checkout, receiving a passcode which they are then prompted to enter on screen.

This allows a bank or other payment provider to verify the customer is genuine before the transaction goes through.

Nationwide Building Society said the full rollout of SCA is already having a positive impact in reducing online card fraud, with the society seeing around 2,000 fewer cases a month.

It said online card fraud often takes place using compromised data, such as that obtained by data leaks, rather than fraudsters stealing the physical card and using this to shop online.

Its analysis of data from members indicates 28% of purchases are made online – a 52% increase compared with five years ago.

The convenience of online shopping needs to be met with stronger security to ensure people can spend safely, Nationwide said.

Matt Cox, chief product owner for digital payments at Nationwide Building Society, said: “The introduction of new strong customer authentication measures adds just a few extra seconds to the check-out process for higher risk transactions, but they are vital for retailers and banks and building societies to check it is the card owner making the purchase.

“It’s been just two months since the new regulations were fully rolled out, but already we are seeing around 2,000 fewer cases a month of online card fraud and this is likely being replicated across the industry.

“While this is good news, history has shown us that when we interrupt fraudsters, they will often look for other, easier ways to trick people out of their hard-earned money.

“This means we must always remain vigilant as we keep our members’ money safe.”

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