The entire world has been rocked by the conflict in Eastern Europe. The payments space is no exception there.
Historic sanctions that have already been levied against Russia in response to the violence. Russian banks have been restricted from using SWIFT to process payments, and card networks like Visa, Mastercard, and Amex have all suspended operations in the country.
It’s been widely speculated that Russia may enlist cybercriminals to help offset the impacts of these moves. They’ve already started targeting the defense space. Other economic sectors may not be safe, either.
Risk Posed by Organized Cybercrime Operations
The idea of “state-backed Russian cybercrime” has gotten a lot of traction in political discussions over the past decade. It has a partisan sheen to it. But, if we look past that, there are some objective truths we need to consider.
There was a general economic malaise hanging over Russia during the 1990s. There was a rapid drop in many quality of life indicators in post-Soviet Russia. Life expectancy in Russia, for instance, dropped from 70 in 1988 to just 64 by 1994. At the same time, there was a tremendous surge in organized crime and corruption as state-owned assets were sold off to budding oligarchs.
But, against this backdrop, there was the rapid growth of the digital economy. Many people in a newly-capitalistic, but economically-stagnant Russia saw opportunity in the illicit side of the digital economy. This is why the country gained an early reputation for their sophisticated cybercrime outfits.
Fast-forward to the present, and it’s no surprise that Russia is a major source of high-level cybercrime, such as ransomware attacks on multinational conglomerates. Russian groups have been implicated in dozens of previous state conflicts. There have also been countless credit card fraud rings and phishing campaigns believed to originate in the country.
So, what does this all mean for US businesses? In short: we could see a spike in fraudulent activity over the coming weeks and months.
Potential Ramifications for Fintech
Cybercrime tends to be a ready consequence of financial hardship, which Russia has experienced before and is certainly feeling now. The last round of retaliatory sanctions imposed on the country in 2014, cost them around $50 billion a year.
Having launched themselves into yet another tenuous financial position, the Russian state could seek out cybercrime groups as a source of sanction-proof revenue. In terms of global standing, Russia has very little to lose. So, we should probably expect an increase in the tempo of attacks against targets in the US and elsewhere.
We continue to monitor the situation in Ukraine closely in order to best help our clients stay secure in what may be a difficult time for cybersecurity across the globe. But, we may see an increase in all types of digital crime in the coming days, weeks and months.
How could this end up affecting American businesses? Generally, it’s through an uptick in fraud.
We could see credit card scams, identity theft, and more. I urge companies to double-check any security systems they have in place and make sure that staff are aware of the potential for a spike in attacks.
At Chargebacks911, we will do everything we can to keep up to date with the evolving situation. We’ll be keeping our customers updated with any relevant information as it comes in.
Increase Your Security
As the situation escalates and Russia’s aggression continues to earn global ire, the US and its allies will be inclined to put more pressure on Russia. That must include countering its “cybercrime industry.”
Companies of all kinds will need to harden their defenses. Fraudsters will always capitalize on market vulnerabilities. And, in times of conflict, the likelihood is elevated tenfold.
Wise best practices should encourage every merchant to be aware of the potential impacts of this situation, and also be prepared to combat them. A few tips to improve your security include:
- Using Fraud Prevention Tools: Examples are AVS (Address Verification Services) CVV (Card Value Verification) numbers, biometric authentication, and two-step verification.
- Improving Customer Service: Online chat bots and website forms are a great way to be available for your customers 24/7, without late-night staffing. Additionally, the easier you are to reach and deal with, the more fraud you can catch, and the fewer disputes and chargebacks you are likely to receive.
- Keeping Tight Records: The better your record keeping, the more efficient and well-covered your evidence, should you need to fight an illegitimate transaction.
- Getting Help: Let’s face it, merchants are very busy people. Even the best-staffed companies on the planet still experience fraud and chargebacks. In these trying times, expert advice can make a huge difference for your bottom line.
