Is going cashless more secure?
The increasingly extensive use and development of online, mobile and alternative payments has resulted in a steady decline in the use of cash as a means of payment. In fact, well over half of all transactions in the UK in 2014 were cashless. Ecommerce is advancing at such a pace that Denmark has even begun steps to legislate for becoming an entirely cashless society in the future.
The transformation of the payments world into a cashless society stands to benefit the economy in a multitude of ways. The widespread adoption of debit card, contactless, and online and mobile payments offers a quick and hassle-free way for customers to pay.
Meanwhile, businesses save money as cashless transactions reduce the need to transport cash, cutting the staff time spent on handling cash. It also eases the security risk, as this humorous example from Sweden illustrates. Transactions that are made electronically are automatically recorded, meaning that it becomes easier to put an end to the ‘grey economy’ that is not taxed or monitored by government.
Cash payments are increasingly being seen as ‘suspicious’ due to the relative anonymity it allows its handlers in comparison to online payment transactions, which leave a digital trail. However, criminals are using stolen identities online to take advantage of burgeoning alternative payment options to obtain and sell illegal goods via the black market under the radar of government monitoring. In the French terror attacks in early 2015, Amedy Coulibaly fraudulently obtained a loan that enabled him to fund his horrific attacks in Paris.
This is an extreme example, but showcases the hugely significant impact of rising online fraud, particularly when carried out under a false or stolen identity. Marrying technological intelligence with human intelligence provides the strongest defence against fraud, using machine learning to track anomalous changes, supported by a knowledgeable human review of activity. This helps give a comprehensive overview of fraud patterns, profiles, country of origin and more, enabling merchants to adapt their business strategy to help identify genuine customers and allow them to shop securely.