US accounted for 48 percent of losses on card fraud

According to new figures from The Nilson Report, fraud losses incurred by banks and merchants on all credit, debit, and prepaid general purpose and private label payment cards issued worldwide reached USD 16.31 billion in 2014 when global card volume totaled USD 28.844 trillion. This means that for every USD 100 in volume, USD 5.65 cents was fraudulent.

In the US, fraud losses equaled USD 12.75 cents for every USD 100 in total volume in 2014. Fraud in all other regions combined was only USD 3.73 cents per USD 100. EMV technology provides protection against losses from counterfeit cards, which accounted for 49% of all card fraud losses worldwide in 2014. US issuers were slammed by losses due to counterfeiting, fueled by data centre breaches that made available tens of millions of stolen card account numbers as well as personal cardholder identification information. US issuer losses due to counterfeiting of USD 3.89 billion in 2014 accounted for 23.9% of all global fraud losses.

Of the total USD 16.31 billion lost to fraud in 2014, card issuers worldwide absorbed 62%. Merchants accounted for the other 38%. In the US, card issuers lost USD 4.91 billion and merchants lost USD 2.95 billion before other costs are factored in.

The introduction of EMV, while stemming losses from counterfeit fraud, will likely lead to a surge in card-not-present fraudulent transactions over the telephone and on the Web. For 2015 through 2020, Nilson is forecasting a continued surge in losses to USD 183.29 billion. In 2020, global card fraud will likely exceed USD 35.54 billion.