NEW YORK–(BUSINESS WIRE)–SmartMetric, Inc. (OTCQB: SMME) Alarming figures show that businesses are suffering monumental losses due to online fraud. What is also alarming is that rate of growth in online fraud for merchants is in triple figures with an estimated loss for chargebacks alone for the end of 2020 will reach $30 Billion in the United States.
The share of total business revenue lost to fraud increased 279% between 2013 and 2016. On average merchants lost 1.9% of total revenue to fraud in 2016. In 2013 the figure was 0.68%.
Sixty percent (60%) of all credit card fraud attempts in Ecommerce channels were successful in 2016.
One area beleaguering online merchants and the credit card industry is the area commonly referred to as “friendly fraud.” Friendly fraud as far from friendly. It is a euphemism used in the credit card industry for what is essentially “customer fraud.” In the day and age when people would need to walk into a physical business to make a purchase with a credit card, any resulting fraud was termed “friendly fraud” since the person committing the fraud and the merchant would have been in face to face contact with each other. Now that the world has moved to billions of dollars being transacted online there is no human interaction for today’s credit card fraud. So, it is a misnomer to call online based fraud by customers as “friendly fraud.” The fraud is in fact out and out customer fraud. And when 86% of reported, soon to be $30 billion in chargebacks, then this is most definitely not friendly at all.
An additional cost to businesses and card companies online is the number of dollars lost in “card abandonment” at the online site checkout. In order to combat online fraud credit card processors have now ramped up automatic fraud prevention tools that are in turn causing false rejections of credit cards being used by good paying customers with good money in their accounts. It is estimated that 25% of what is called false positive transaction rejections result in the customer abandoning the transaction completely. Imagine owning a large department store and finding out that 1 in 4 of your customers turnarounds and walk out without buying anything because their card is erroneously rejected by the card processor. A quick way to go bankrupt for any business. This doesn’t happen in physical retail stores anywhere near like it happens online, simply because the anti-fraud tools online are so more restrictive of transactions then what happens at a merchant’s terminal in the physical store.
In a nut shell the explosion in online fraud and in addition the unimaginable loss of businesses from good paying customers abandoning online shopping carts because of false card rejections, is causing multi-billions of dollars a year being lost by merchants and credit card issuers in lost sales and outright fraud, said the President and CEO of SmartMetric, Chaya Hendrick.
Without going into too much detail, the SmartMetric biometric activated credit card allows online merchants to fight back against customers who say it wasn’t them who made the transaction (customer fraud) and at the same time validate the legitimacy of the card user thereby allowing for greater acceptance of transactions which will reduce substantially the losses from checkout cart abandonment that is plaguing the online world.
The SmartMetric biometric credit and debit card uses the cardholder’s fingerprint which is read by a nano fingerprint scanner inside the card, to turn on the card prior to insertion into the card reader or ATM. The cardholder’s biometrics are protected since their fingerprint is stored inside their card and never leaves the card at any time. Only the authorized holder of the SmartMetric biometric credit and debit card can use the card…Read more>>