CARPINTERIA, Calif. — Global losses from credit, debit and prepaid card fraud reached $11.27 billion, an increase of 14.6% over the year before, according to a new report.
According to The Nilson Report, a payment industry newsletter, card issuers accounted for 63% of the losses, while merchants accounted for the rest. Of the total, $5.33 billion of the losses occurred in the United States, a 14.5% increase over 2011; card issuers accounted for 64% of losses, while merchants accounted for 36%. Overall, the United States accounted for 47.3% of global card fraud losses, but generated only 23.5% of total volume. According to the report, the disparity is due to the United States having the lowest percentage of cash as a percent of total volume in the world, with exception to Canada; the absence of EMV cards, which have special chip technology on the card, also contributes to losses.
"Adoption of EMV at the point of sale is the strongest defense against counterfeit cards," Nilson Report publisher David Robertson said. "EMV adoption would not only help U.S. issuers, but also issuers in other parts of the world that continue to put mag-stripes on their cards to accommodate POS terminals in the United States. Fraudsters are willingly paying a premium for stolen mag-stripe data from EMV card countries in order to create counterfeit cards for use in the United States."
The global brand cards — Visa, MasterCard, American Express, UnionPay, Diners Club and JCB — averaged fraud losses of about 6 cents per $100 in total volume.