European Fraud Trends Point to Online Payments Risk
Blog: Enterprise Decision Management Blog
FICO has just published the interactive European Fraud Map infographic, based on data from Euromonitor International. The following is a guest post from Kendrick Sands, Senior Analyst – Consumer Finance at Euromonitor, on the trends shown for European card fraud in 2015.
As a share of total card payments for the researched markets in Europe, total value lost to fraud declined from .08% to .06% from 2010 to 2015, reflecting innovation in card payment security. However, the method of value lost to fraud is shifting to target the transition to online retailing.
The UK, Denmark and France were among the researched markets where the value lost to fraud as a share of total card payment value did not decrease and will benefit the most from additional security measures for card payments. The US$1.3 billion lost to fraud in these three markets in 2015 provides an incentive for merchants and issuers to further invest in fraud reduction measures. Although total value lost to fraud increased throughout Europe, the method of fraud varied by market. Card not present value lost to fraud increased in the UK, while lost cards accounted for the greatest increase in France and Denmark.
The further projected increase in online payments over the forecast period suggests additional security measures will be required throughout Europe. While the decline in counterfeit cards has been significant from uniform EMV adoption, there has yet to be a similar effort to secure the online space. If greater security measures are not adopted to combat card not present fraud, the broader advance of card payments over paper alternatives could be negatively impacted.
Following the Russian Federation’s more than 500% increase in total card payment value came a 130% increase in total value lost to fraud from 2010 to 2015. For a market that has made the transition of consumer payments from paper to card and electronic alternatives a priority in recent years, increasing the security of transactions must remain a priority to increase consumer confidence in payments.
You can follow Kendrick Sands’ blog posts at http://blog.euromonitor.com/author/kendrick-sands.
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