Australians love technology and enjoy using it to make online transactions. Developments in technology, new entrants and innovation in payments have altered the retail payments landscape.
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This is a good thing for businesses and consumers, however as much as we embrace innovation, the non-negotiable element which will drive adoption - and therefore economic growth - is customer trust and safety.
Digital payments have allowed significant innovation which consumers are keen to embrace.
Ninety seven per cent of Australian small businesses are connected to the internet, however they are the target of 43 per cent of all cybercrimes - and that number is increasing.
These attacks effect productivity, disrupt business activities, and cause loss of revenue.
Around 53 per cent of small businesses identify hacking as a major concern related to e-commerce, with 89 per cent having at least some concern.
Given many people now carry little or no cash, the reliability of electronic payment services has become critical to the smooth functioning of our economy.
COVID-19 has also fundamentally changed habits, including driving greater online payments.
People are coming to terms with the realities of our interconnected world and what this means for work, social interaction and buying habits.
Interestingly, payment card fraud has declined as spending by card has increased.
More than $819 billion was transacted on Australian cards in 2019, an increase of 3.9 per cent on the prior year.
Fraud accounted for 0.057 per cent of that total, down from 0.073 in 2018.
Physical card fraud, such as card counterfeit/skimming, has fallen by 15 per cent to a record low of $16.8 million.
This is mainly due to the introductions of EMV chips on all Australian cards.
This innovation is virtually impossible to reproduce by fraudsters. Internet e-commerce transactions are susceptible to card-not-present (CNP) fraud, which occurs when valid card details are stolen and then used to make purchases or payments without the card, online or by phone.
This accounts for about 87 per cent of all Australian card fraud. CNP transactions in Australia grew by 16 per cent in 2019 to $220 billion, while CNP fraud dropped by almost 18 per cent to $403 million - less than 0.2 per cent of transactions.
Cybercriminals are pivoting their methods to take advantage of the pandemic, rapidly adapting in response to changes in the current environment.
It's up to all of us to remain vigilant and have a safe and trustworthy online shopping experience.
Nigel Phair is director of UNSW Canberra Cyber.
