The Toronto ‘Smash and Grab’ payment terminal scam – And the new payment era that could combat it
Toronto small business owners have been hit by a payment terminal scam where thieves snatch the items from stores and refund money onto stolen credit cards.
One business had five terminals stolen with criminals using a distraction technique often used by organized crime syndicates.
The scam is symptomatic of a growing trend in petty financial crime, which could have consequences to how Canadians pay for goods in person.
Smash and grab
The spate of robberies that hit Toronto this summer has taken local business owners by surprise with their aggression and quickness.
In an article with the Toronto CTV news, the CEO of International Pool and Spa Centers, Alan Kideckel, told of how thieves stole five payment terminals from his stores using a professional technique that makes him believe they’re linked to organized crime.
Once stolen, the terminals, usually from stores that sell expensive items, are used to refund money onto stolen credit cards. Then, the criminals go to a local bank machine and withdraw the cash.
The police have obtained photos of the suspected thieves from Kideckel and other business owners and hope to have a successful conclusion to their investigations before long. The case is high priority, with the police service estimating a total of $15,000 to have been taken in just a few days.
The global payment shift
Scams like this add more credence to the online payment industry which continues to grow across the world.
Many businesses have moved land-based operations online, a digital shift that has been accelerated by the pandemic. It’s led to a rise in digital wallets, online payments and, of course, cryptocurrency.
Digital payments are more secure than credit card or cash transactions, with most using multi-layered security methods to guard against fraudulent use. Cards and cash, on the other hand, can be robbed, lost or forged.
Not only that, but digital payments allow individuals to do things that they can’t do in person. They can buy products that are out of reach in the physical world. Canadians can play US Powerball online, for example, something that’s otherwise impossible; they can buy cryptocurrency, or instantly transfer money to different countries.
This increased security and flexibility is fuelling a rapid shift toward virtual payments and could see payment terminals falling out of use in just a few years, just like cash.
A post-terminal era
The pandemic has already sped up the use of contactless payments; those transactions that use Near Field Communications (NFC) technology between your smartphone and a terminal – but the next step will sidestep the need for any terminal at all.
Modern mobile payment solutions are opening the door for mobile-to-mobile payments between stores and their customers. These also use NFC tech, but a special store smart device replaces the traditional terminal.
This brings three big benefits. First, it’s built within an app: a much more cost-effective and practical way for the store owner to take payments. Second, it removes limitations on how many transactions it can process. Finally, it’s much more secure: there are no terminals to rob, like in the Toronto crimewave, and no PINs involved.
The idea isn’t just pie in the sky, either. There are already store-friendly solutions, like Surfpay, that are available for stores to onboard.
Taking one step further, smart grocery carts, pioneered by Amazon and Whole Foods in the USA, will allow customers to skip the checkout process altogether. Instead, the cart tracks and calculates the value of the items you leave the store with, then deducts it automatically from your bank account.
While it’s yet to become commonplace, many experts believe it will not just make terminals but physical payments themselves things of the past.
Too good to be true?
While cutting-edge payment methods excite us with their quick and secure features, there are also several potential pitfalls to consider.
Perhaps the most damaging is the fact that people who need to use cash won’t be able to, or at least will find it very difficult to. These might include homeless people or domestic abuse victims who rely on cash as a means to survive away from the prying eyes. Having a record of everything they spend may just make a bad situation worse.
A general complaint could also be that it’s very easy to lose track of spending. The less we have to do for a transaction, the less real it feels: counting out $100 in cash registers with us more than tapping ‘confirm’ to a virtual payment or simply walking out the store without doing anything at all. Shopaholics may find this new tech damaging to their bank balance.
Yet, the simple fact is that if incidents like the Toronto terminal scam keep happening, payment providers and store owners will be extra keen to introduce technology that protects their bottom line – and a new era of smart payments looks like it holds the answers.
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