What Is Digital Skimming and How Does It Work?

Therefore, this guide is designed to explain how both physical and digital skimming work, who is typically targeted, and how individuals and businesses can protect themselves. Due to global credit card fraud on the rise, understanding skimming techniques is more crucial than ever. Read on.

What Is Card Skimming?

Card skimming is the unauthorized capture of payment card information using hidden physical devices or malicious digital code. There is a big difference in such malicious deeds. Physical skimming occurs at locations like ATMs or gas pumps, where devices secretly read card data, while digital skimming targets online checkout forms through compromised websites. In plain words, thieves typically steal data such as the card number, expiration date, CVV, and sometimes PINs that are easily obtained through eCommerce services. For this and many other reasons, eCommerce fraud prevention is extremely important.

Physical Credit Card Skimming Explained

Physical credit card skimming entails a procedure in which criminals install hidden devices on legitimate card terminals so they can steal card information. A typical skimming setup involves a fake card reader placed over the real slot to copy card data, along with a pinhole camera or fake keypad to capture the user’s PIN. Common skimming hotspots include ATMs, fuel pumps, and point-of-sale (POS) terminals. 

What Is Digital Skimming?

Digital skimming represents the infiltration of malicious code into online payment environments or systems to steal customer payment information. It works in the following manner:

• A malicious or infiltrate script gets inserted into a vulnerable eCommerce website.
• The script silently and uncontrollably captures payment details during the checkout process.
• Stolen data gets sent to a remote server which is seemingly controlled by the attacker.
• In the end, most site owners and users usually remain unaware of the breach.

There are certain tools such as Magecart malware kits where the attacks go unnoticed for weeks, even months. However, if businesses were to resort to using the sophisticated Vellis eCommerce payment processing system, they won’t ever have to worry about having their card information stolen in any device, platform or terminal.

How Criminals Use Skimmed Data

Very often, after stealing card data, criminals often sell it on the dark web or use it directly for fraudulent purchases. What is more, sometimes the data can be used to clone physical cards or commit online fraud. For instance,skimmed cards are typically used by fraudsters to commit card not present fraud where they misuse the transactions and bypass chip security measures.

Real-Life Examples of Skimming Attacks

Some of the most notable real-life examples of skimming attacks were hard to get detected until the damage was severe. For instance, one huge European airline had around 380,000 payment records stolen in a two-week digital skimming attack and got fined over $185M. Also, in one popular US-based retail store, around 500 customers got entangled in card skimming, leading to widespread fraud. These cases underscore the growing threat of both physical and digital skimming attacks, highlighting the importance of robust security measures and prompt detection to mitigate financial losses and protect consumer data.​

Signs Your Business or Card Was Targeted

If you are looking for signs that your business or card as an individual is being targeted, look out for these signs.

Warning signs for individuals:

• Getting unfamiliar charges: Spotting unexpected transactions on your credit or debit card statement indicates your card has been skimmed and tested.
• Card getting declined: If your card is suddenly declined, it could be your bank’s fraud system responding to suspicious activity, possibly due to recent skimming.
• Getting alerts from your bank: Receiving notifications or emails warning about suspicious activity or asking you to verify recent transactions.

Red flags for businesses:

• Receiving customer complaints about unauthorized transactions: Multiple customers reporting fraudulent activity shortly after purchasing from a website or store is a signal of a skimming breach.
• Unusual scripts or changes on checkout pages: Watch for unexplained code, changes in page behavior, or external script calls.
• Irregular traffic patterns: Sudden spikes in traffic to payment pages or connections to unknown domains indicating malicious activity or data exfiltration.

How to Prevent Credit Card Skimming

Ecommerce fraud prevention can be seen as protecting both physical and digital payment environments from skimming attacks. Physically, using tamper-proof terminals, regularly inspecting card readers, and covering the keypad when entering your PIN. Digitally, secure your website with strong firewalls, perform regular code audits, and use real-time fraud monitoring tools to detect malicious scripts.

Physical Prevention Tactics

Inspecting card readers and devices: Check ATMs, gas pumps, and payment terminals for loose parts, unusual attachments, or signs of tampering.

Protecting your PIN: Always cover the keypad with your hand when entering your PIN to block hidden cameras.

Using contactless payments: Select contactless cards or mobile wallets like Apple Pay or Google Pay to avoid inserting your card if possible.

Digital Skimming Prevention

Using secure platforms: Choose reputable eCommerce platforms such as Vellis and keep all software up to date to patch vulnerabilities.

Implementing CSP and SRI: Apply Content Security Policy (CSP) and Subresource Integrity (SRI) to control which scripts load and ensure their integrity.

Performing regular audits: Conducting routine code reviews and security audits to detect unauthorized changes.

The Role of Payment Systems in Skimming Protection

Payment systems play a vastly important role in skimming protection. Vellis eCommerce payment processing system helps reduce exposure to digital skimming by offering secure, fully managed payment solutions. Features like tokenization, hosted checkouts, and PCI DSS compliance protect sensitive data from theft. Therefore, partnering with platforms like Vellis that actively monitor for script injection and threats is key to preventing digital fraud.

Impact of Card Skimming on Businesses

Card skimming could lead to financial losses from chargebacks, fraud reimbursements, and fines. It also damages customer trust, which can result in long-term harm to brand reputation and loyalty. Businesses could also face legal action and penalties if they violate data protection regulations like PCI DSS.

Legal Responsibilities for Skimming Incidents

Businesses must comply with PCI DSS and data privacy laws like GDPR to protect customer payment data. Failing to do so can lead to fines, legal action, and breach notifications. Companies and businesses are ultimately responsible and accountable for securing their payment systems against skimming threats.

FAQs

What is card skimming?

Card skimming entails fraud where criminals obtain card information using hidden devices or malicious scripts.

How does digital skimming work?

Hackers inject malicious code into checkout pages to steal credit card details during online transactions.

Is card skimming still a threat with chip cards?

Yes, especially in card-not-present environments or if a PIN is also compromised.

What are the signs of digital skimming?

Instant fraud reports, new scripts on your site, or unexpected chargebacks can all be indicators.

How can my online business prevent digital skimming?

Regularly scan your site, partner with secure processors, and keep all software up to date.

References

Jcrammbler.com: Digital Skimming: The Definitive Guide For 2025

https://jscrambler.com/blog/digital-skimming-definitive-guide

LinkedIn: The Rise of Digital Skimming: Protecting Yourself from Invisible Cyber Threats

https://www.linkedin.com/pulse/rise-digital-skimming-protecting-yourself-from-cyber-threats-sangrez-gorif

RetailInsightNetwork: New Cyber Threat

https://www.retail-insight-network.com/features/new-cyber-threat-digital-skimming-targets-online-retailers