If you think that credit card fraud is going up, you’re right, according to the new Nilson Report, last year losses were a whopping $16.31 billion, while the total credit card volume worldwide was $28.844 trillion. Losses are slated to keep going up, predicted to total $35 Billion by 2020.
If you just look at the global all-purpose brand– UnionPay, Visa, MasterCard, JCB, Discover/Diners, and American Express – the total amount they made was $23.777 trillion, up 14.8%, while losses outpaced gains, totaling $15.45 billion, up 18.5%.
Losses were a result of a wide range of activities, including fraudulent applications, counterfeit cards, lost and stolen cards, cards never received, and cards that were not present at time of checkout.
Fraud in the U.S up, up and away
The U.S made up 48.2% or $7.86 billion of the payment card losses, yet we only created 21.4% or $6.187 trillion in revenue last year. What does this mean in the real world? For every $100 spend on a payment card, $12.97 was fraudulent, while globally for every $100 spent, $5.65 can be counted toward fraud.
Lack of EMV conversion, is seen as one of the reasons why losses in the U.S were high. “Multiple factors contributed to that gap,” said David Robertson, Publisher of The Nilson Report. “Nothing mattered more than the lack of an EMV-compliant infrastructure.”
EMV conversion holds the keys
EMV technology is moving forward in the U.S, and it is seen as a way to stop the hemorrhaging through fraud for consumers and banks. EMV, or chip based technology, is reportedly harder for hackers to counterfeit, and this is pivotal considering that 49% of all fraud was due to counterfeiting last year around the world.
With issuer’s in the U.S being hit hard with losses that were a direct result of counterfeiting – counterfeiting was responsible for $3.89 in billion in losses last year. These losses were also fueled by data center breaches, which gave hackers access to tens of millions of stolen card account numbers, along with other kinds of personal data.
Consumers and issuers are expected to keep taking hits until 2020, when it’s predicted that they will begin declining. According to the report from 2015 to 2020, total card fraud worldwide will go up $183.29 billion, and in 2020 be more than $35.54 billion. In dollars and cents this means for every $100 spent between 2015-2020, $5.74 will be fraudulent, and then in 2020 it will decline to $5.26.