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With relatively high fraud levels, carefully tailored fraud prevention measures play an important part in helping French merchants to counter fraudsters and protect their genuine consumers.
In 2013, total fraud in France increased from the 2012 level of EUR 450.7 million to EUR 469.9 million according to the annual report of the French Observatoire. Over the same period, online fraud increased from EUR 109.4 million to EUR 125 million. Around two thirds of domestic card fraud takes place via the internet, as compared to 11% of payments.
While France pioneered the national roll out of smart cards to control fraud, EMV adoption has been relatively slow. According to FICO, France has the highest level of fraud as a percentage of card sales in Europe and France and the UK together account for 62% of the European fraud in total.
France also has the highest lost-and-stolen card fraud level in Europe, accounting for 28% of the total fraud ‘mix’. 66% of this total comes under the category of ID theft, including account takeover and fraudulent card applications. Fraud prevention measures to identify and tackle account takeover fraud will be particularly relevant in this market. Ecommerce sales continue to grow strongly in France, driven by a significant increase in the number of merchant sites, stimulating demand through competition in price and service. In May 2014, Fevad reported that there were 144,000 online shopping sites, a 21,000 increase over the previous 12 months.
Cumulated with this growth in ecommerce, there has come an associated rise in online fraud levels. Fraud in card-not-present payments accounted for 9.2% of the value of domestic transactions and 61% of the total value of domestic fraud in 2012. Many French retailers are keen on expanding internationally and see ecommerce as a cost effective route to market. Still, strong cardholder authentication and fraud prevention tools are critical to manage the associated risks. Similarly, fraud rules tailored to the mobile channel are essential as ReD is seeing relatively high rates of attempted mobile fraud across vertical sectors in France. Rules specifically designed for the mobile channel are critical to ensure that merchants can take full advantage of mobile commerce growth.
More information (including sources) about ecommerce fraud, mobile fraud and online fraud prevention in France can be found in the Cross-border Ecommerce Report - France
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