Card Fraud Losses Reach $21.84 Billion in 2015
Fraud losses incurred by banks and merchants on all credit, debit, and prepaid general purpose and private label payment cards issued worldwide reached $21.84 billion last year.
This means that for every $100 in volume, 6.97¢ was fraudulent, up from 6.21¢ for every $100 in 2014.
Fraud, which grew by 20.6 percent, outpaced volume, which grew by 7.3 percent, according to The Nilson Report, the top trade newsletter covering the card and mobile payment industries.
The U.S. accounted for 38.7 percent or $8.45 billion of gross card fraud losses worldwide, while generating only 22.9 percent of total global purchase and cash volume. U.S. fraud reached 11.76¢ per $100 last year.
Fraud losses occur from counterfeit cards at the point of sale and ATMs, card-not-present transactions, fraudulent applications, lost and stolen cards, and other smaller categories.
Losses to card issuers reached $15.72 billion or 72 percent of gross fraud losses worldwide. Merchants and acquirers lost the remaining $6.12 billion or 28 percent of the total. Issuers absorbed the majority of fraud losses last year. Issuer losses occur mainly from counterfeit credit and debit cards used at the point of sale and ATMs.
“The industry’s best defense against counterfeit fraud are EMV cards and the terminals needed to read their chips,” said David Robertson, Publisher of The Nilson Report. “EMV has been steadily penetrating dozens of countries, but in the U.S. where issuers poured EMV cards into the market, merchants lagged in deploying terminals.”