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With the expansion of cashless payments, as encouraged by the government, damage from credit card abuse has skyrocketed.
The public and private sectors should work together to strengthen measures to increase the security of cashless payments.
The amount of damage caused by credit card abuse in Japan in 2023 rose to about ¥54 billion, up 370% from 2014.
Phishing scams in particular are becoming conspicuous.
It is said that in many cases, emails from parties posing as financial institutions or online shopping site operators are sent to individuals to lead them to fake sites. On those sites, they are asked to enter their credit card number and other information, which is then used to purchase goods online and resell them for cash.
These fake sites are so sophisticated that it is difficult to distinguish them from genuine ones. The damage is increasing and cannot be left unchecked.
With the aim of improving convenience for consumers, the government has been strongly encouraging the use of cashless payment methods, such as credit cards and electronic money, with the goal of increasing the proportion of cashless payments to 40% by 2025.
The amount of credit card use in particular has been growing due to such factors as the expansion of online shopping. It reached ¥105 trillion in 2023, about 60% higher than five years prior.
However, the current situation cannot be said to be healthy, with the combination of enhanced convenience and increased risk of fraudulent use. The government has a responsibility to take every possible measure to ensure security as it takes the lead in promoting cashless payments.
The Economy, Trade and Industry Ministry has established a public-private sector council to prevent credit card abuse. The council consists of credit card companies, such as JCB Co. and Credit Saison Co., as well as associations of payment providers, among other parties.
To prevent purchases from being made with stolen card information, the council said it will urge the introduction of a system in which a password that can only be used for a short period of time is sent to the owner’s cell phone during the preliminary stages of payment. The owner is asked to enter the password to confirm their identity.
Since the card information alone will not be able to be used to make purchases, this system can deter fraud. In Europe, where this system is increasingly being introduced, the rate of abuse of credit cards is declining. The introduction of this system should be hastened in Japan as well.
It is important for users to be more vigilant. They should be careful not to follow instructions in suspicious emails and not to enter card information carelessly.
In some cases, cardholders are said to not be immediately aware of abuse of their cards. It is advisable to check statements frequently to see if there are any payments that one does not recall.
It is also important for the police to work to uncover criminal activities, such as purchases using stolen card information.
