The European Central Bank (ECB) has reported an eight percent increase in fraud among cards issued or acquired within the Single Euro Payments Area (Sepa) for 2013.
The total value of fraudulent card transactions amounted to $1.44 billion and is the highest in absolute terms for five years, according to a report issued this week by the ECB.
The 2013 figures also showed changes in the type of frauds committed with 66% of the total value (€958 million) resulting from so-called card-not-present (CNP) payments made via the internet, post or phone. Indeed, CNP fraud was the only type of fraud loss to record an increase from the previous year, a rise of 20.6% compared to ATM and PoS fraud which both fell by 13.7% and 7.9% respectively.
The ECB report attributes the fall in card present fraud to the near complete adoption of EMV standards within Sepa and the growing adoption rate among terminals outside of Europe. The report also warns that CNP fraud could continue to rise unless necessary mitigation measures were adopted, such as the guidelines issued by the European Banking Authority (EBA) and the Eurosystem for secure internet payments and card payment oversight respectively.
The ECB's recommendations are supported by a recent report issued by analytical software company FICO based on data from Euromonitor International that recorded a 6% increase in card fraud across Europe for 2014. The FICO report also cites the positive influence of EMV technology in reducing card fraud, highlighting the fact that 47% of fraudulent cross-border debit transactions from the UK involved the US where migration to EMV standards has been beset by delays. The majority of US business must employ EMV technology by October 1st or else face liability for any losses from magnetic strip technology.
“Banks in the UK and most of Europe adopted EMV technology years ago, so it may appear that they have little to worry about from mag-stripe fraud,” says Martin Warwick, FICO’s fraud chief for Europe. “However, the trends suggest that any European plastic card can be targeted, as criminals try to ‘fill their boots’ before the US finally shuts the door on skimming fraud.”