US Card Fraud Disproportionately High Last Year0
The United States now accounts for 47 percent of global card fraud even though it generates only 27 percent of the total volume of purchase transactions.
Some specific numbers: payment fraud losses in the United States were 3.56 billion dollars last year. Of that, issuers absorbed 60 percent of that amount, while merchants absorbed the other 40 percent.
Why does the US have such a disproportionate percentage of fraud? Nilson Report publisher David Robertson cited more secure EMV chip technology in an interview with Reuters: “We have a disproportionate percentage of the global total, and a considerable part of that is because we have an old infrastructure. The US will account for a steadily rising share of the global total until it embraces chip-based card security.”
The facts back up Robertson’s opinion. The UK Cards Association recently released the UK’s fraud numbers, announcing that card fraud is at an eleven year low. This makes sense, as the UK was one of the first countries to adopt chip-based EMV payments cards (although still behind their Gallic cousins). They were first introduced in 2003, and fraud has fallen every year since.
Both pieces of fraud news provide even more of an impetus for the United States to move to EMV chip cards. With Visa’s recently announced plans to accelerate the migration to EMV chip technology and the adoption of mobile payments, this process is expected to start soon.
Rapid adoption of EMV in the US will most certainly decrease this country’s share of worldwide fraud. Fraudsters would seek to steal from easier targets, such as e-commerce sites. And since the US is home to the largest web merchants in the world, I wouldn’t be surprised if these merchants started using EMV to secure online payments as well. So, with two birds, one stone.
What about you, do you think we’ve reached the tipping point? Is it only a matter of time before chip banking cards are the norm in the U.S.?