Global card fraud losses reach USD 11.27 bln in 2012

According to data from The Nielson Report, card issuers have accounted for 63 percent of the global fraud losses and acquirers accounted for 37 percent of those losses. Major card brands such as Visa, MasterCard, American Express, Diners Club, UnionPay and JCB have registered fraud losses of 6.13 cents for every USD 100. The same source shows that gross fraud losses have jumped to 5.22 cents per USD 100 in 2012.

Research also points out that the US has amounted to 47.3 percent of global card fraud losses, but generated only 23.5 percent of total volume. One contributing factor to that disparity is that the US has the lowest amount of cash as a percentage of total volume than all other world regions except Canada. Cash withdrawals, which are protected by PINs, have substantially lower fraud losses. This lowers overall fraud losses as a percent of total volume.

The absence of EMV cards and terminals in the US contributes to fraud losses. The US is the only region where counterfeit card fraud continues to grow consistently. US issuer losses due to counterfeiting have accounted for 26.5 percent of global fraud losses in 2012. The US also has high CNP fraud losses because it leads the world in online sales. Smaller merchants who do not invest in fraud-fighting tools are particularly vulnerable.

The survey also mentions that the adoption of EMV at the point of sale is the strongest defense against counterfeit cards. EMV adoption would not only help US issuers, but also issuers in other parts of the world that must continue to put mag-stripes on their cards to accommodate POS terminals in the US. Fraudsters willingly pay a premium for stolen mag-stripe data from EMV card countries in order to create counterfeit cards for use in the US.