According to a recent study done by The Nilson Report credit card fraud losses worldwide reached $27.85 billion in 2018 and are projected to rise to $35.67 billion in five years and $40.63 billion in 10 years. US Companies incurred 33.99% of total fraud losses worldwide and LexisNexis is saying US retail fraud attempts have doubled YoY – and tripled since 2017. Card issuers accounted for 68.97% of gross fraud losses worldwide, while merchants, merchant acquirers and ATM acquires accounted for the other 31.03% of the total.
Over the past four years, U.S. Banks have replaced most traditional magnetic stripe credit cards with new EMV cards – short for Europay MasterCard Visa – that store data on an embedded computer microchip that makes the cards more difficult to counterfeit. With magnetic stripe, banks usually absorbed the cost when a fraudulent transaction was made with a counterfeit card, but retailers were stuck with the cost when lost or stolen cards were involved, amounting to billions of dollars each year. The switch to EMV has come at considerable expense to retailers, if a chip reader is not available the retailer is responsible for the fraud. $30 billion in the US alone was spent by the retailer on equipment, software and installation for the EMV readers.
The move to EMV was prompted, in part, by data breaches in which credit card numbers were stolen. But the chip only confirms that the card is not counterfeit and does nothing to protect card information stored in databases or being transmitted for payment processing. With the advancement in technology there are other ways to pay in person whether it be with a smart phone or smart watch, but these all link back to a credit or debit card. Fraudsters now, more than ever, have multiple avenues, devices, and techniques with which to exploit online shoppers and online retailers.
This way you don’t have to give away personal data like every time you create an online shopping account and you don’t constantly need to check your bank account for suspicious transactions. You are also less at risk to be victim to online identity theft or finding that your login data is being sold on. Imagine you have your card details linked to one of those accounts.