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The Effect Of COVID-19 On Secure Online Transactions

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By: Nihad Hassan

July 26, 2021

The ongoing COVID-19 crisis has significantly changed how people live, work, and interact with each other. For instance, the massive shift of the workforce to remote working (from home) and enforcing social distancing policy by governments worldwide have impacted consumer buying habits during the pandemic and possibly forever. Using internet technologies to work, study, socialize, and buy products and services has intensified during the pandemic. Digital transformation becomes present in all aspects of our lives. However, it brings many advantages to people. It also draws cybercriminals' attention to exploit it because of the increased attack surface after adopting IT –almost everywhere.

This article discusses the impacts of COVID-19 on online transactions' security and gives examples of new online payment method trends that have become more popular during the pandemic.

How is COVID-19 changing consumer behavior?

The pandemic has affected consumers; behavior in all areas of life. For instance, we've witnessed a rapid digital acceleration "decades in days" in adopting IT technologies. The most noticeable changes were as follows:

  1. A rise in work from home.
  2. Using distance learning solutions.
  3. Most communications (personal and business) become online.
  4. Online shopping becomes preferred over traditional shopping methods (e.g., buying groceries and other daily goods become increasingly online).
  5. Entertainment becomes mostly digital as people cannot go to theaters, restaurants, and other public places.
  6. E-pharmacy & e-doctor spreads at a large scale.
  7. Digital banking becomes the only option for making payments for many companies.

As we note, the new consumer trends are all shifting towards adopting digital technologies in all life areas. This will undoubtedly lead to an equal increase in cyberattacks against digital systems and endpoint devices. Aside from stealing sensitive information, most cyberattacks are commonly conducted to steal money from business organizations and internet users using various tactics.

How does COVID-19 impact the security of online transactions?

The challenges associated with the pandemic has forced most companies to adopt digital payments to remain in business. The following lines mention the most noticeable changes during the pandemic that affect the security of online transactions.

Increased Volume of Digital Fraud in E-Commerce and Online Banking

During the pandemic, the world has witnessed a massive increase in online fraud, including transaction fraud. A study conducted by Oliver Wyman found a 700% increase in phishing attacks globally since March of 2020.

There was a rise in social engineering attacks, especially phishing emails. Phishing attacks were disguised using COVID-19 themes, and many seem to have originated from legitimate, trusted entities such as the World Health Organization (WHO) and the National Health Service (NHS). They offer medical advice or sell healthcare products to convince unaware users to download a malicious attachment or click to visit a URL housing an exploit kit.

The number of transaction fraud also increased as many businesses were urgently forced to shift into online payments without proper cyber defense measures. TransUnion's study found an increased percentage of risky worldwide transactions in the financial services sector by 11% since early March of 2020. A fraudulent transaction is defined as one that has been reviewed or rejected due to fraud indicators.

Data Breach and Cybercrime Increased During the Pandemic

Cybercrime activities have intensified during the pandemic worldwide. A study from the UK found a 31% increase in cybercrime during the pandemic in 2020. For instance, UK businesses have lost over £6.2 million (8.5 million USD) to cyber scams during this year alone. Most cyberattacks were conducted by using phishing emails or via social media messages.

The number of data breaches that relate directly to COVID-19 increased during the previous year. For instance, a recent study published by Verzion found 36 confirmed data breaches identified as being connected directly to the COVID-19 pandemic.

Impact on data protection regulations

The massive shift to digital payments during the pandemic has increased the number of people who use online payment methods to purchase goods and services. This fact generated numerous privacy, data protection, security, and compliance questions about online payment providers' ability and other online merchants to keep their clients' personal information confidential.

Increased Adoption of Tokenized Payments

Tokenized payments become more popular during the pandemic. A Tokenized payment is a physical payment credit card that has been digitally divided into multiple independent payments. For example, digital wallets like ApplePay have become very popular. The e-Wallet allows its holders to purchase without touching the POS device or entering any PIN or other details because of the two-factor authentication inherited in this payment method. Tokenized payment method

Figure 1: Tokenized payment method

New Payment Methods Begin to Appear

The widespread adoption of digital payments has encouraged non-financial providers to adopt easy digital payments to pay for their small products such as foods and coffee. An example is the Starbucks company.


The COVID-19 pandemic has changed many consumer behaviors, which resulted in changing typical payment methods to become digital. This article discussed the impact of the COVID crisis on online payment transactions' safety and mentioned the emerging payment methods that begin to spread during the ongoing pandemic.

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