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More information can be found in the Cross-border Ecommerce Report - the US
As ecommerce and mobile commerce continue to grow across the US, the world’s largest economy sees more than half of all global payment card fraud (51%, according to Business Insider), at a cost of USD 7.1 billion in 2013. Data breaches at major retailers in the same year added USD 500 million to total US fraud costs. This is a very large market for merchants and fraudsters alike, and with much to play for.
To put US card fraud in the context of payment volumes, Nilson estimated that, in 2012, the US accounted for 23.5% of global payment card volume, but 47.3% of card fraud.
High fraud levels can be attributed to the fact that US consumers are multiple cardholders, but also to the country’s continued reliance on magnetic stripe technology. The US remains the only country in which counterfeit-card fraud is consistently growing.
The introduction of EMV technology is being driven both by fraud losses domestically and by the issue of global acceptance of cards issued in the US. Visa and MasterCard are pushing US retailers and acquiring banks to upgrade to the ‘chip’ standard in the next year and a half and Aite Group has suggested that, by the end of 2015, 70% of US credit cards will feature the new chips.
This is expected to lead to a decline in the US share of global card fraud in the coming years – and to a migration of fraud to card-not-present transactions. Effective online security measures will be required to avoid the experience of European markets in this respect.
There is already ample evidence from leading US online merchants of the efficacy of robust, real-time fraud prevention solutions in reducing online fraud levels and costly chargebacks. The pressure to introduce effective security to online channels can only be expected to increase, in light of recent data breaches and the continuing rise in account takeover fraud. According to Unisys, nearly 60% of US consumers surveyed say that a security breach involving their personal or credit card data would make them less likely to do business at a bank or store that they commonly use.
Mobile phone penetration is high in the US and forecasts indicate that 50% of users will be conducting financial transactions over mobile by 2015. According to eMarketer, the US mobile commerce spend was USD 42.14 billion (16% of retail ecommerce sales) last year. This is a massive market in development and, with above average fraud rates on mobile payments, it will require the careful application of fraud prevention tools and techniques that are tailored to the channel and can address its particular consumer authentication and verification challenges.
More information about ecommerce fraud, mobile fraud and online fraud prevention in the United States can be found in the Cross-border Ecommerce Report - the US
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