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More information can be found in the Cross-border Ecommerce Report - Italy
In Italy, as elsewhere, the growth of ecommerce and mobile commerce brings increasing threat of online and mobile fraud. Carefully tailored fraud prevention measures play an important part in countering fraudsters and protecting genuine consumers.
While Italy remains a country where cash payments dominate, growth in card usage has been stimulated by the Italian government’s ‘war on cash’, which was designed to limit the use of cash to transactions below EUR 1000 in order to restrict the black economy. The increased security offered by chip-and-PIN technology, and the expansion of innovative payment solutions such as contactless transactions, is expected to accelerate this trend.
Italy is one of the largest markets in Europe for open loop prepaid cards, and prepaid and debit cards remain the favoured card types among Italian consumers. These cards guarantee lower fees and commission, and are perceived to offer a higher degree of security and better control of expenses.
In line with card usage, card fraud has grown steadily in the eurozone’s third largest economy in recent years, although Italy’s Ministry of Economy and Finance reported a year-on-year slump in credit card fraud in August 2013. According to FICO, card fraud increased by EUR 1.1 million to reach EUR 56.8 million in 2013. Counterfeit fraud accounts for half of this total (EUR 28.4 million) and is largely attributed to cross-border usage. Domestically, the spread of EMV is expected to lead to a decline in this type of fraud. Card-not-present transactions now account for 25% of fraud (EUR 14.2 million) and lost and stolen cards 18% (EUR 10.2 million).
Verified by Visa is mandated for all ecommerce merchants in Italy, but Italian consumers have a high level of intolerance for delays in transaction processing caused by 3D Secure enrolment. Risk-based 3D Secure authentication, and a combination of 3D Secure with other fraud prevention techniques, are likely to gain favour in future.
Over 50% of Italy’s online merchants are selling into international markets, with fraud losses reportedly higher than for domestic transactions. Effective fraud prevention support is crucial for international expansion and fraud strategies should be developed to take account of the different payment preferences and buying behaviours of consumers in other countries. Access to global fraud data can play a very significant role in enabling effective detection of fraudsters operating abroad.
More information about ecommerce fraud, mobile fraud and online fraud prevention in Italy can be found in the Cross-border Ecommerce Report - Italy
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