New payment checks at online checkouts are proving invaluable as Nationwide Building Society reports it is protecting its members from an additional 2,000 cases of online card fraud a month. Despite the fact that some transactions now take a little longer, new research from Britain’s biggest building society reveals more than two thirds (68%) of people are happy for a slight delay if it is more secure.
Nearly all online card fraud 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. However, despite this, people still worry more about losing their card and it being used online (59%) than worry about their details being compromised and used this way (41%), according to the poll of 2,000 people1.
While Strong Customer Authentication (SCA) was first introduced by debit and credit card providers back in September 2019 across a small proportion of payments, it was only on 14 March that the service was rolled out across all online purchases. SCA requires those shopping online to authenticate it is them making the purchase by responding to a push notification sent to their mobile banking app or by inputting a one-time passcode sent to their mobile phone.
Nationwide’s data shows that 70 per cent of its members complete the SCA check using their mobile banking app, while 21 per cent authenticate using a one-time passcode sent via a text message. It is important that people keep the contact details held by their bank or building society, including their mobile phone number, up-to-date. This is especially important if people don’t use the mobile banking app, otherwise there may be issues when they go to check out when shopping online.
Member data from Nationwide shows that 28 per cent of all purchases are now made online – an increase of 52 per cent compared to five years ago. However, the growth in convenience of online shopping needs to be met with stronger security to ensure people can spend safely and in confidence.
Early data shows that 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 – a figure that is likely to be replicated across the industry.
Nationwide’s research shows that 42 per cent say that SCA makes them feel safer when shopping online, while more than a quarter (27%) said the extra security it provides meant they are more likely to shop online.
While the majority of payments are able to complete since SCA was introduced, around a fifth (21%) of people have previously reported a problem, according to the research. Despite the deadline having passed, merchants who are not yet compliant will see their transactions declined. However, this is improving day by day.
Beyond this, the main issues people face include not having updated their bank or building society with up-to-date contact details – meaning they couldn’t get the code (8%). Seven per cent said not having their phone with them to get the code or use their banking app was an issue, while the same amount (7%) face problems with; not having sufficient mobile phone signal for the code to come through in time.
To support members, Nationwide offers a range of options to be able to complete the SCA check, including:
- Authentication using the mobile banking app
- One-time passcode via text
- One-time passcode using the card reader
- One-time passcode via a landline
- One-time passcode via email
Matt Cox, Chief Product Owner for Digital Payments at Nationwide Building Society, said: “Many people prefer the convenience of online shopping and, while merchants strive to make the checkout experience as quick and easy as possible, we generally accept that a small delay is worth it when it comes to our security and personal details.
“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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