CARPINTERIA, Calif. – Fraud losses on payment cards declined in 2017 when compared to the prior year, according to a new analysis.
Fraud losses incurred by payment card issuers, merchants, acquirers of card transactions from merchants, and acquirers of card transactions at ATMs on all credit, debit, and prepaid general purpose and private label payment cards issued worldwide in 2017 were $24.26 billion.
According to The Nilson Report, global card volume (purchases for goods and services combined with cash advances and withdrawals) totaled $34.119 trillion in 2017, meaning that for every $100 in volume, 7.11¢ was fraudulent, down from 7.15¢ per $100 in 2016.
The U.S. accounted for 38.6% or $9.37 billion of the worldwide gross card fraud losses, while generating 23.7% of the global total for purchase volume and cash volume, the Nilson Report stated. U.S. fraud was 11.60¢ per $100 in 2017, down from 11.81¢ the prior year.
All other countries in the world combined accounted for $14.89 billion in fraud losses, equal to 5.72¢ per $100 in volume. This was an increase from 5.69¢ the prior year, the Nilson Report added.
"More than 50% of all card fraud losses worldwide were the result of criminal activity at ecommerce sites where cards are not physically present for the sale, even though card-not-present transactions (CNP) accounted for less than 15% of total payment volume worldwide,” said David Robertson, publisher of The Nilson Report.
Card issuers worldwide experienced $16.98 billion or 70% of gross fraud losses worldwide. The remaining $7.28 billion in fraud losses were incurred by merchants, merchant acquirers, and ATM acquirers, the Nilson Report stated.
Problems From Card-Not-Present
The company added its analysis found losses from counterfeit cards declined in the U.S. and worldwide last year as “EMV cards and EMV-enabled POS terminals and ATMs continued to provide an effective defense.”
Merchant losses to fraud have been increasing in recent years as a percentage of total fraud losses, and that continued in 2017, the Nilson Report said. EMV, which helps issuers cut fraud losses from in-store transactions, can’t protect mail order, telephone order, or ecommerce merchants, the company reminded.
The Nilson Report is projecting that in five years, card fraud worldwide is expected to total $34.66 billion, including $12.12 billion in the U.S. However, fraud as a percent of every $100 is predicted to decline to 6.17¢.