CARPINTERIA, Calif.–Card-related fraud losses worldwide reached $27.85 billion in 2018 and are projected to rise to $35.67 billion in five years and $40.63 billion in 10 years, according to a new forecast from The Nilson Report.
The company said those figures refer to 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 around the globe.
Losses of $27.85 billion in 2018 were up from $23.97 billion the year before, The Nilson Report said.
The United States accounted for $9.47 billion in fraud losses in 2018. Even though cardholders in the U.S. generated only 21.54% of $40.582 trillion in global card volume in 2018, U.S. companies incurred 33.99% of total card fraud losses worldwide, according to The Nilson Report.
But there was some good news: U.S. fraud losses amounted to 10.83¢ for every $100 in cardholder spending, which was a decline from 11.12¢ per $100 the previous year, the company said.
"While fraud as a percentage of all card dollar volume declined for the second year in a row, criminals saw double-digit growth in the money they were able to steal from the system. Card fraud netted criminals $3.88 billion more in 2018 than in 2017," said David Robertson, Publisher of The Nilson Report.
Methods of Fraud
Losses to fraud incurred by payment card issuers worldwide reached $19.21 billion. Issuers accounted for 68.97% of gross fraud losses worldwide. Merchants, merchant acquirers, and ATM acquirers accounted for the other $8.64 billion or 31.03% of the total, The Nilson Report said.
According to the company’s analysis, issuer losses occurred when criminals took over valid accounts, cards were lost or stolen or counterfeited, new accounts were opened with the intent to commit fraud, accounts were opened using a mix of valid and bogus information (synthetic fraud), cardholders or their family members made purchases and then disputed the charges (friendly fraud), and a few smaller categories.