The UK saw Europe’s largest annual jump in card fraud losses for 2015. Most of the 18% rise in losses came from online transactions, reflecting the growth in this channel, the ease of accessibility to funds and lower risk for criminals, and the theft of personal data through cybercrime. The online map, based on data from Euromonitor International, shows that card fraud rose in 10 of the 19 countries studied, with Greece, Denmark, France and Russia posting the highest rises after the UK.
The FICO and Euromonitor interactive card fraud map compares fraud loss trends across the UK region.
The rise in UK card fraud equates to an additional £88.5 million lost. Some 75% (£66.7 million) of that increase was in card not present (CNP) fraud, and £42.4 million of CNP fraud came from e-commerce. The UK contributed about 43% of the total card fraud losses across the 19 European countries studied.
FICO says the increased rate of personal data compromise through data breaches was one likely cause, but that customer expectations for a seamless purchasing experience also had an influence.
Card fraud losses across the 19 countries were 10 percent higher than in 2014. CNP fraud was the dominant fraud type.
FICO says the financial services industry will either have to find a way to make data useless to criminals, or make more use of fraud detection analysis.
As a share of total card payments for the researched markets in Europe, total value lost to fraud declined from .08% to .06% from 2010 to 2015 reflecting innovation in card payment security. However, the method of value lost to fraud is shifting to target the transition to online retailing.
The UK, Denmark and France were among the markets where the value lost to fraud as a share of total card payment value did not decrease, and will benefit the most from additional security measures for card payments, and additional investments from merchants and issuers.
The further projected increase in online payments over the forecast period suggests additional security measures will be required throughout Europe. While the decline in counterfeit cards has been significant from uniform EMV adoption, there has yet to be a similar effort to secure the online space. If greater security measures are not adopted to combat card not present fraud, the broader advance of card payments over paper alternatives could be negatively impacted.
Following the Russian Federation’s more than 500% increase in total card payment value came a 130% increase in total value lost to fraud from 2010 to 2015.
For a market that has made the transition of consumer payments from paper to card and electronic alternatives a priority in recent years, increasing the security of transactions must remain a priority to increase consumer confidence in payments.
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