Card Fraud Steady Despite eCommerce Surge – AusPayNet
(30 August 2022 – Australia) Payments industry efforts to fight payment card fraud are proving successful as card fraud rates stabilise despite a surge in online card payments, Australian Payments Network (AusPayNet) reports.
The payments self-regulatory body revealed in its annual Australian Payment Fraud 2022 report that despite card payments expanding by eight percent to A$865 billion and online spending by 8.2 percent to A$53 billion, the incidence of all card fraud rose at a slower pace, by 5.7 percent to A$495 million for the year.
Importantly, the rate of fraud on Australian card payments in 2021 was steady at 57.3 cents per A$1,000 of spending, compared to 58.6 cents in 2020. Stabilisation of the fraud rate coincides with AusPayNet’s introduction in 2019 of the CNP Fraud Mitigation Framework to counteract rising rates of CNP fraud. The framework encourages merchants to accelerate uptake of secure technologies offered by banks, card schemes and payment service providers/gateways such as real-time monitoring, machine learning, tokenisation and strong customer authentication. In the three years prior to the introduction of the framework (2016-2018) the fraud rate averaged 74.3 cents per A$1,000 spent.
Card-not-present (CNP) fraud (mainly linked to online purchases) accounted for 91 percent of all fraud on Australian cards in 2021, reflecting the migration of fraudulent activity to the online environment as eCommerce becomes more popular with consumers and grows. In the groups annual Targeting Scams Report, the Australian Competition and Consumer Commission (ACCC) estimated that Australians lost over A$2 billion to scams in 2021.
“The CNP framework has prompted merchant adoption of technologies to detect and prevent fraudulent transactions. Criminal groups continue to target online transactions partly because that’s where the growth in card spending is, but also because avenues for skimming and other types of card fraud have become more difficult to perpetrate since the introduction of EMV chip technology” said AusPayNet CEO Andy White.
“The signs are that industry collaboration is beginning to have an impact on the incidence of CNP fraud but there is a long way to go. Financial institutions, merchants and consumers all have a role to play in being alert to the threat of fraud and taking simple steps to prevent it. At the same time, as the industry sharpens its focus on combatting card fraud there are signs that criminal groups now see scams as the next frontier for illicit gains” Mr White added.