Nowadays, many countries have accepted using a digital signature to help companies and organizations increase their services and other related business operations processes. Along with this, businesses also use technology in enhancing their workflow and management operations.
Besides using digital signatures, the PSD2 or Payment Service Providers Directive going into effect across Europe has seen some difficulties in implementation for some merchants and issuers. Due to some actors like higher costs and long implementation cycles have resulted in high cart abandonment rates across the continent regarding e-commerce. Additionally, some of the strong customer authentication methods can still be vulnerable to fraud.
The principles behind passwordless authentication ux and strong customer authentication regulations are sound and designed for fraud prevention. However, not all implementation methods are equal, as some multi-factor authentication methods are stronger than others.
Fraudulent acts today may involve tech savvy tricks, and social engineering that can get around the fraud prevention measures of MFA that serve as the heart of strong customer authentication. There are three primary ways fraudsters seek to bypass strong customer authentication. One of these is social engineering attacks like phishing or man in the middle (MITM) attacks designed to trick users into providing personal information like usernames and passwords.
Another primary means of fraud is SIM swapping, wherein the fraudster pretends to be the mobile phone owner while they contact the phone company and lying that they have a new SIM card to activate on the account. Lastly, malicious accessibility is a fraud wherein hackers exploit a known software or firmware vulnerability called a zero-day exploit. In a zero-day exploit, hackers discover a vulnerability in a particular software before fraud prevention measures are used to address it.
Issuers, third parties, as well as online retailers should pay closer attention to such a points of weakness, in specific strong customer authentication methods, to create more practical and effective measures that help prevent fraud for customers in the online world.
For more information about strong customer authentication that boosts fraud prevention, here is an infographic to help you secure private authentication for the future – LoginID.