There has been a massive increase in online credit card fraud, with transactions made using stolen card details hitting USD 417.6 million in 2016 more than doubling since 2011. The 2016 Australian Payments Fraud Data Report also found a 13% increase in card skimming fraud, executed through “ghost terminals, false terminals made to look like real card readers that are not connected to the payments network. For every USD 1000 spent on credit cards, fraud accounted for 74.7 cents, up from 66.9 cents in 2015 and 43.8 cents in 2012.
Transaction activity increased by more than 10% last year, to USD 714.5 billion, of which total fraud accounted for USD 534 million, or 0.074%. It estimates that by 2020, only one-fifth of transactions will involve the input of card details in internet browsers, amid the growth of mobile wallets and sophisticated shopping carts.
Recent increases in card fraud have been driven by identity theft and large-scale data breaches, through malware or phishing attacks, while the widespread adoption of chip technology has made it harder for criminals to operate in the face to face environment.
The report recommended merchants to collect payments through a fully hosted payment gateway provider, avoid shipping re-saleable goods to non-residential addresses, like P.O. boxes and hotel rooms, and only make refunds to the card used to pay for the goods.
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