Monday 12 September 2016

Frauds in Online Payment Systems

custom application development companies

Nowadays, everything is online. Online shopping, online money transfers and online banking help in saving a lot of time and making our lives easier. These facilities are provided by software development companies in  India by developing online payment system software. However, these same technologies also make life easier for cyber criminals by offering them short and quick ways to steal users’ money. 

Using stolen payment data is an effective and popular way of making a quick profit. Hacking a bank is more time-consuming and expensive and the risk of being caught is higher. By contrast, many individuals use computers with different vulnerabilities, which can be compromised easily. By stealing a comparatively lesser amount from each hacked online banking account, a cyber criminal has a good chance of going undetected. 

Frauds are classified as follows:

  • Online frauds
  • Offline frauds
Online frauds occur when fraudster owns legitimate company to get sensitive personal information and illegally conduct transactions in the existing accounts. Phishing and spoofing are types of online frauds. Online frauds occur when fraudster steals sensitive information of customers such as bank account number, credit card number or other identification and uses it to open new account or performs transaction in the customer/company's name. There are many types of e-frauds in online payment systems and they can occur in following ways:

Account Hacking:

  1. Hacking includes gaining illegal entry into a person computer system during online payment. Fraudster use compromised customer credentials to hack the origination system and misuse it in the legal account holder's name.

Identity Theft:

  1. Identity theft refers to crime in which fraudster illegally gets and uses another individual's personal information in such a way that involves fraud to gain something of value during online transaction.

Phishing:

  1. Phishing is a well-known technique for obtaining confidential sensitive personal information from any customer by posing as a trusted authoring. It is an attack by fraudster to "fish‟ for your baking details through emails having attachment files or hyperlinks to different websites. This e-mail creates a fake image to be sent from legitimate organization to cheat people in order to disclose sensitive information.
  2. On clicking any attachment or the hyperlink residing in e-mail ,the computer system get infected with malware. Now when next online transaction takes place, the malware will activate and steal private and personal financial information which includes credit card numbers, PIN number which is used by fraudster to steal money from the account.

Spoofing:

  1. This attack is about creating a fake or duplicate website for criminal use. The fraudsters  are having fake companies name, logos, graphics and even code. This often takes form of  trade sites where in people would innocently providing personal information to criminals or purchase of a fake product that actually does not exist.

Check frauds:

  1. Check frauds are a major threat to financial security. Electronic check frauds can be easily taken place; the fraudster uses printer, desktop phishing software and scanner. The most common forms of check fraud include altering check, forging endorsement, counterfeiting checks and creating remote checks.

Nigerian advance free fraud:

  1. This e-fraud is the most popular and lucrative fraud. Fraudsters often arrive with bulk mailing or family member email of asking the recipients to enter into business and getting money transferred with huge commission in return. 
  2. Once the contact is established the fraudsters request money in advance which need opening of an account in the bank or paying some fee which leads to troubles and expenses.

Lottery frauds:

  1. One will receive scam emails informing of winning a substantial amount of money in a lottery draw. When the receiver reply's, the sender then asks for bank account details and other personal information so they can transfer the money. These emails are fake and may ask to pay a handling fee that will lead to loss of money and your personal information which may be used in other fraud.

Conclusion:

E-frauds are taking place in online payment systems. So it is becoming a danger for software development companies in India as online payment systems are developed by these companies. There should be encryption algorithms implemented to reduce these e-frauds.

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