Imagine walking through the airport with your wallet securely in your pocket and getting a phone alert from your bank notifying you that your debit card in being used. You feel for your wallet and it’s right there in your pocket. You take it out, look inside and your debit card is right where it belongs. Is the bank wrong? Was the alert a mistake? Not likely. What’s more likely is that at some time prior to that moment someone with a Radio Frequency Identification (RFID) reader and a Near Field Communication (NFC) wireless transmitter stood within six inches of you, while you made a purchase, and stole your debit card information.
It was undetectable and it took only seconds. These RFID readers can be purchased online or even downloaded to a phone via an app. Yes, an app. This means that in seconds and for very little money, a criminal could own the tools to steal your identity.
Once they have your information it can either be used to make purchases online, sold to another criminal or used to create a new card for in-store purchases. According to Nilson Report, one of the top trade newsletters covering the credit card payment industry, in 2015 global fraud on credit, debit, and prepaid cards totaled 16.31 billion and is expected to exceed 35.5 billion in 2020.
So, who pays? We all do. The cost of fraud affects the bottom line of retailers and this cost is passed on to the consumer in the form of higher prices. The cost of fraud also affects the profitability of banks and this cost is passed on to the consumer in ways we can’t even imagine.
Some ways that we know about are in the form of higher fees and lower interest rates. And all of this is the cost of the internet, the cost of information. OK so, maybe the internet is not robbing us blind but, it certainly is making it easier for criminals to hone their craft and the result of that is higher costs for everyone.