Mobile payment channels have become lucrative for criminals targetting businesses and consumers in South Africa.
Fraudsters are committing more online crimes in South Africa
The COVID-19 pandemic resulted in the rise in digital payment methods. This coincided with the e-commerce boom and opened customers to more detailed fraud risks.
Those committing fraud now have more opportunities to take advantage of consumers, according to LexisNexis True Cost of Fraud Study. The results of the survey revealed that these risks are especially frequent in South Africa.
LexisNexis says the average transaction volume through mobile channels in Mzansi almost tripled since 2019. A similar level of transaction volumes as credit or debit cards are payments processed through digital or mobile wallets.
Third-party app usage has almost doubled. Fraud via mobile web browsers, however, still accounts for the largest share.
Fraud is expensive for businesses
Director of fraud and identity EMEA of LexisNexis Risk Solutions Jason Lane-Sellers said that Fraud is expensive for businesses.
“Fraud has become more expensive for businesses in part because the volume of both human and bot-originated fraud continues to target transactions at scale. The other side of the story is that consumer transaction habits are changing, and cybercriminals are adapting to these behavioural patterns. With more consumers using a variety of channels to transact, there is no one-size-fits-all solution for businesses wanting to authenticate digital identities and reduce fraud losses,”
South Africa has the lowest rate of fully integrated digital customer experience operations
Detection and prevention of fraud approaches in SA are far behind the Europe, the Middle East, and Africa (EMEA) average. Approximately 21% of merchants in South Africa as well as financial institutions have FULLY integrated their digital customer experience operations with fraud prevention.
This is the lowest rate among all other regions that were surveyed, reports Business Insider.
Shoprite alerts customers of a potential data breach
In related news, it was previously reported that a warning was released by the Shoprite group on Friday, 10 June, indicating a potential data breach. The suspected breach may include the names and identity numbers of customers.
The breach could also impact money transfers involving Eswatini, Namibia and Zambia.
Shoprite confirmed that an SMS will be sent to customers in South Africa affected by the potential data breach. The message will be sent to the cell number provided by the customer at the time of the transaction. In addition, the group has launched an investigation into the data breach.
The Information Regulator has been notified and access to the impacted areas of the network has been shut down, according to Shoprite. Read the full story here.