Figures from this month’s Nilson Report show that global card fraud figures reached $21.84bn in 2015 and is predicted to keep rising. These fraud losses come from a number of sources including counterfeit card fraud, CNP fraud, “friendly” fraud and fraudulent applications.
Ecommerce continues to boom across the world at unforeseen rate. WorldPay recently predicted that global ecommerce figures would hit $2.4tn by 2019. It’s an incredible prediction but if recent history is anything to go by, that figure will no doubt be higher by 2019.
There does then, seem to be a dichotomy in ecommerce. Fraud is growing at a huge rate but it is not impacting on the growth of ecommerce. Consumers are still flocking to laptops and mobile to shop, transact and live their financial lives. It would seem that fraud is not having an impact on the popularity of ecommerce. At least, not yet.
However, everything has a tipping point, a point where enough is enough. Take EMV in the US, for example. For years the USA lagged behind in EMV adoption. EMVCo figures from Q1 of 2014 showed that while 96.33% of all card transactions in Europe Zone 1 (all of Europe apart from countries in the former Yugoslavia and former Soviet Union) were made using EMV standard cards; in the US, this figure was a mere .003%.
Of course, in October 2015, the liability shift took place in the US. From then onward merchants who did not have EMV enabled payment devices would not be insured against fraud they suffered from cards.
It was estimated that the total costs of making the US EMV compliant would be $8.65bn and this figure was one of the key barriers on the route to EMV adoption in the US. However, by 2014, the volume of card present fraud in the US had exceeded this cost and it was decided by the industry that the time was now right to implement EMV.
As for what the tipping point for CNP fraud ecommerce will be, we cannot be certain. But we can be certain that there is one and that when it is reached, the industry will look towards new standards to making online commerce safe without losing its essential convenience.
MYPINPAD are ready for this challenge. Our solutions provide security without compromising on user experience, exactly what is needed to fight global fraud.