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The Cross-Border Ecommerce Community (CBEC) enables Merchants, Payment Service Providers, ISOs and Acquiring Banks to access valuable content about mature and developing markets that can support strategic decision-making. Read more

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United Arab Emirates

Ecommerce fraud and online fraud prevention in United Arab Emirates

Read below about payment fraud, online fraud and fraud prevention in the UAE

More information can be found in the Cross-border Ecommerce Report – UAE

Card use in the UAE is on the increase – and so, too, is card fraud. As ecommerce expands, banks and merchants will need to adopt tailored fraud prevention measures to counter fraudsters and protect genuine consumers.

In June 2014, the UAE topped the list of countries with credit card fraud, with 44% – up from 36% in 2012 - claiming to be victims of fraud in the previous five years. The same survey found that 35% of the population had received a replacement card due to fraud or data breaches during the past year.

Emirates 24/7 recently reported an increase in the number ATM frauds using skimming devices and cameras. It has also been reported by the UAE Central Bank (June 2014) that in one week USD 411.000 was taken illegally via ATM transactions. There remains a customer education issue with regard to this type of fraud, as survey information shows that 17% of customers make a note of their PIN and carry it with their cards.

As measures were put in place to combat fraudulent transactions, in 2013 it was reported that there was an issue with ‘false rejects’ - with one in four people having a card payment declined because the bank incorrectly thought it was fraudulent. Such ‘false positives’ are a critical issue in fraud prevention as banks and merchants need to ensure that genuine customers are able to transact smoothly, without delay, while fraudsters are identified and prevented from doing so.

Frost and Sullivan have described ecommerce as the UAE’s fastest growing business and, in the last quarter of 2014, 83% of UAE residents made purchases online. Contributory factors to online payment growth have included increased internet penetration, a rapid increase in mobile penetration and ‘government initiatives encouraging a digital lifestyle’.

Growth in online business has brought new fraud issues to prominence and reports indicate that a significant percentage of users are conducting internet banking or online shopping without security software or on a public computer. A recent article in Arabianbusiness.com stated that there is poor awareness of the dangers of cybercrime in the UAE.

Continued profitable ecommerce growth will require both that consumers are educated in simple security and fraud prevention techniques, and that merchants and banks respond quickly and effectively to secure transactions, prevent fraud and protect the customer experience.

More information about ecommerce fraud, mobile fraud and online fraud prevention in the UAE can be found in the Cross-border Ecommerce Report – UAE.