The US is famous for having one of the worst track records when it comes to dealing with certain types of payment fraud. Data from 2013 revealed that America lost more money from credit card fraud than the rest of the world combined.
Last year, it was revealed that the US is the last G20 country to adopt EMV technology and that 67 per cent of UK-issued card fraud is from the US. These staggering statistics are bound to change dramatically once the country migrates to EMV technology this autumn.
But what about mobile payments? If the US is so slow to react to credit card fraud that has been around ever since cards were introduced, how is the country tackling much more modern, and therefore much more complex fraud?
According to Mercury, the U.S. Government pegs online financial fraud at 13.1 million cases each year – resulting in $18 billion in losses and mobile payments account for a growing proportion of this lost capital.
Mercury says merchants are attempting to fight fraud but they need help. According to the company, only 24 per cent of them use complete fraud platforms, 16 per cent deploy device identification software, and just 15 per cent implement ID authentication solutions.
More interestingly, Mercury says that according to local law enforcement, which traditionally is the first point of contact in fraud cases, investigations of less than $2000 rarely move forward.
Mercury says the total value of mobile payments is steadily rising. Its value in 2013 was $32 billion, $52 billion in 2014 and $67 billion this year.
Whilst mobile payments account for 14 per cent of merchant transactions, they also make up 21 per cent of fraud. A staggering number given the relative novelty of the technology.
Each fraudulent dollar
For every fraudulent dollar connected to a particular merchant, it can end up costing $3.34, including restitution, internal investigation and assistance to government cases.
It will be interesting to see what changes after the EMV liability shift is rolled-out this autumn; perhaps it will have a knock-on effect in terms of people becoming more security savvy, or it will simply mean that more money and manpower is freed-up to tackle online payment fraud.
The problematic US EMV rollout and the larger question: Is EMV actually protecting retailers against fraud?
In this guest post, Vlad Branin, VP, Professional Services, Zooz, talks about the ins and outs of US EMV adoption: process of rolling out and the specific benefits.
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