Interac Debit losses, due to skimming, have continued a six year drop setting a new record low of $11.8 million in total losses to financial institutions in 2015.
Fraud exploitation occurring in Canada accounted for only $2 million, or 17 percent of total losses – a drop of 40 percent from the $3.4 million of domestic fraud reported last year. The number of cardholders that were reimbursed has also been drastically cut to 25,000 Interac Debit cards, from a high of 239,000 in 2009.
In 2008, the Canadian payment card industry began a widespread migration to chip technology, which enabled Interac debit cards to store and process data with greater security. Unlike magnetic stripe-based debit cards, Interac chip debit cards use cryptography to communicate with the point-of-sale terminal to carry out security checks and ensure card validity. Since the migration to chip technology in 2009, the Interac network has seen a drop of 92 percent from fraud losses due to skimming ($142 million in 2009 versus a low of $11.8 million in 2015).
Finding it increasingly difficult to commit fraud on Interac debit cards in Canada, criminals have begun migrating their fraudulent payment card activity to international non-chip environments and card-not-present exploitation on credit cards and other networks’ debit products.
Chip technology is the backbone of Interac Flash, the contactless enhancement of Interac Debit. As a result, Interac Flash enabled cards have increased protection against skimming, counterfeiting, and transaction replay types of fraud, including electronic pick-pocketing. While not all contactless payments products are created equal, Interac Flash has all the same security features as Interac Debit, including EMV-based chip processing, Interac Zero Liability, plus the added protection of small transaction limits. Typically, no single transaction can be more than $100 and the total spend can not exceed $200 before the cardholder must enter their PIN.
While the number of Interac Debit and Interac Flash cards in market is growing, fraud is continually shrinking. Of all the active debit cards last year, only 0.09 percent of cardholders were affected by fraud. In 2015, more than $347 billion flowed through the Interac network across 5.91 billion transactions. When you compare the fraud numbers, 0.003 percent of total transaction amount was fraudulent with only 0.0005 percent occurring inside Canada.
For a complete archive of more than 60,000 articles published since 1995 search the CardFlash.com library.