The increase in digital payment methods has reduced the use of physical cash in majority of the countries because citizens can literally purchase things at anytime, anywhere provided their cards or mobile phones are within reach.
One major problem with this trend is card theft because often times a card is stolen and used in completing transactions unauthorized by the card owner. for instance, my wallet was stolen at the city centre last month and I panicked immediately I noticed because my credit and debit cards were in the wallet. within few minutes, my credit card was maxed out and my debit card that had my salary was used to purchase goods on an international E-commerce app, I made attempts to block the cards immediately I noticed the alerts. However,the transactions had already been completed, I reached out to my account team and raised a theft report to the police. I ended up paying a 500£ on one of my cards. On the other hand,if my wallet had contained only physical cash the anxiety and stress that followed would have been minimized because there is a limit on the amount of cash residents can carry around.
A practical solution would be multi-layered security by using the persons transaction history to determine which transactions to be flagged. for example, if a card holder frequently visits a superstore and seldomly uses the card in a high end store,then all of a sudden,there is a transaction generated from Indian that transaction should be flagged and a notification is sent to the card holder for verification that will reduce the level of card frauds signficantly.
In conclusion, financial institutions to ensure that card security is tightened with two factor authentications as well has using transaction insights to identify sudden transactions.