Japanese credit card companies are gearing up to cultivate demand for smartphone-based funds settlement services in Southeast Asia, where many people still lack such basic financial services as banking and credit cards.

Aeon Financial Service will launch a smartphone-based payment service in Cambodia as early as April. Users will pay for shopping and send money with a smartphone app and e-money offered by the company. The riel-denominated e-money will be purchasable at malls of sister company Aeon Mall and elsewhere.

The unit of Japanese retail giant Aeon sees strong demand for electronic funds settlement services in Cambodia, where maintenance fees discourage many locals from having bank accounts. By keeping fees for merchants low, the company aims to encourage more stores to offer the service. The initial target is set at signing up 300,000 to 500,000 users by 2020.

JCB is working to launch a smartphone-based credit card payment service in Thailand around 2019. The user will pay for a purchase by simply scanning its QR code with a smartphone camera. The company hopes that the service will help increase its credit card customers among the middle class.

The Association of Southeast Asian Nations is home to some 600 million people, nearly five times the Japanese population. ASEAN’s overall per capita gross domestic product amounts to a tenth or so of Japan’s. But many see great future potential for electronic funds settlement services in Southeast Asia, given its fairly low bank and credit card usage.

That Chinese rivals have yet to establish a presence in many parts of ASEAN is also driving Japanese credit card issuers to move into the region.

The number of identity fraud victims has increased by 8 percent (rising to 16.7 million U.S. consumers) over the last year, a record high since Javelin Strategy & Research began tracking identity fraud in 2003, according to a press release about the report.

The study found that despite industry efforts to prevent identity fraud, fraudsters successfully adapted to net 1.3 million more victims in 2017, with the amount stolen rising to $16.8 billion. With the adoption of EMV cards and terminals, the types of identity fraud continued to shift online and away from physical stores. The complexity of fraud is also on the rise as criminals are opening more new accounts as a means of compromising accounts consumers already have, according to the press release.

“Fraudsters are growing more sophisticated in response to industry’s efforts to implement better security,” Al Pascual, senior vice president, research director and head of fraud and security for Javelin Strategy & Research, said in the press release. “Fortunately, there are a variety of digital tools that consumers can leverage to stay better informed on the status of their identities and accounts, and to ultimately stay better protected.”

The study found the following:

• Record high incidence of identity fraud — In 2017, 6.64 percent of consumers became victims of identity fraud, an increase of almost one million victims from the previous year. This increase was driven by growth in both existing non-card fraud and account takeover.
• Account takeover grew significantly — Account takeover tripled over the past year, reaching a four-year high. Total ATO losses reached $5.1 billion, a 120 percent increase from 2016. Account takeover continues to be one of the most challenging fraud types for consumers with victims paying an average of $290 in out-of-pocket costs and spending 16 hours on average to resolve. This translates to more than 62.2 million hours of time consumers lost in 2017. That is enough time for more than three million people to binge watch the first and second season of Stranger Things.
• Online shopping presents the greatest fraud opportunity — EMV is driving more fraudsters to seek online channels for fraud. Card Not Present Fraud is now 81 percent more likely than point of sale fraud, the greatest gap Javelin has observed.
• Fraudsters are getting more sophisticated — Fraudsters are getting more sophisticated in their attacks and using more complex and difficult to detect monetization schemes. One-and-a-half million victims of existing account fraud had an intermediary account opened in their name first. This is 200 percent greater than the previous high.

Gemalto, the digital security company and payment card supplier, announced news on Wednesday (Feb. 7) that it is joining forces with Entrust Datacard, a provider of identity and secure transaction technology solutions, to provide a Software-as-a-Service (SaaS)-based instant issuance solution for U.S. financial institutions.

In a press release, the companies said that instant issuance began to make its mark in 2006 and has now become important for financial institutions to integrate into their portfolio. Gemalto highlighted research from market research firm Aite Group, which said that from 2017 to 2021, the number of financial firms in the U.S. to implement instant issuance will increase to 5,483 from 3,312 — a 55 percent increase in the adoption rate of financial companies.

“The ability to instantly issue a card in a branch was a luxury in the past, but as more and more issuers implement this capability, it is slowly moving from a nice-to-have to a must-have,” said Aite Group’s Tiffani Montez in the press release.

According to Gemalto, under the deal, Entrust Datacard’s instant issuance solution will be integrated with Gemalto’s SaaS platform to lower the barriers of entry for financial institutions of any size. With the solution, the wait for a new card is nearly eliminated. Gemalto noted that cards instantly issued at bank branches increase activation rates by 82 percent and usage rates by 32 percent. Additionally, Entrust Datacard’s printers are installed on site at the branch. EMV cards that can be personalized and printed on demand are then possible. The issuance software is hosted remotely by Gemalto’s cloud-based SaaS infrastructure.

“With both Gemalto and Entrust Datacard’s strong experience in the banking and payment industry, we’ve been able to apply that expertise to bring instant issuance to market,” said Paul Kobos, SVP Banking and Payments, North America, Gemalto, in the press release. “The SaaS aspect really sets the solution apart from others in the field, and financial institutions of all sizes will be able to reap the benefits.”

The US Secret Service is warning that ATM jackpotting has finally hit American shores, with crooks using a known malware strain to cash out older Diebold units.

According to security blogger Brian Krebs, the Secret Service began warning financial institutions last week that stand-alone ATMs in places like pharmacies and big box retailers have been targeted in recent days.

The crooks seem to be using a strain of malware called Ploutus.D to hit Diebold Opteva 500 and 700 series ATMs, says Krebs, citing a source. In a security alert, Diebold says that the attacks appear to be similar to a spate that hit Mexico last year.

The Secret Service says that the criminals – masquerading as ATM service technicicans – use endoscope medical devices to look inside cash machines and find the spot where they can attach a cord to link a laptop to the ATM’s computer. They then install malware and force the ATM to spit out its cash.

Diebold recommends that operators controll access to areas used by personnel to service the ATM and implement two-factor access control mechanisms for service technicians.

This is thought to be the first time that jackpotting has been carried out on US soil but the technique has long been deployed in other parts of the world. Europe saw a surge in the number of ATM black box attacks – where devices are attached to machines and command cash outs – in the first half of 2017.

There were 114 across 11 countries over the six months, more than 300% up on the 28 seen in H1 2016, according to the European Association for Secure Transactions (East), which estimates related losses of EUR1.5 million.

– Finextra –

From next April, online shoppers across Europe will be able to use biometrics, such as fingerprints or facial recognition, to identify themselves at the checkout when they pay with Mastercard. With smartphones now near ubiquitous, the vast majority of consumers and banks are eager to ditch passwords in favour of biometric authentication.

Research from Mastercard and Oxford University last year found that 93% of consumers prefer using their fingerprints or faces over passwords for validating payments, while 92% of bankers also want to adopt biometrics.

Mastercard Identity Check, which lets people use biometric identifiers, such as fingerprint, iris and facial recognition to verify their identity using a mobile device during online shopping and banking activities, is already available in 37 countries.

But with new EU regulatory requirements on authentication coming into force through PSD2, the card firm says that banks across the continent must offer the biometric option by April 2019.

Javier Perez, president, Mastercard Europe, says: “Biometric technologies perfectly match consumers’ expectations of getting the secure payment solutions of tomorrow, in line with the increased digitalisation of lifestyles. This can significantly benefit consumers, retailers and banks by improving the purchase experience and better securing the transaction.”

– Finextra –