Dive Brief:
- Fraud losses in card payments will keep rising over the next decade, culminating in $403.88 billion of losses worldwide over the next ten years, industry research firm Nilson Report predicted this month.
- The U.S. will be particularly hard hit mainly in transactions where the card is not present, such as in e-commerce payments, according to a Nilson press release earlier this month. That payments category is the most fraught in regions all over the world, Nilson said.
- "Criminals from outside the US do business inside the US because American merchants and card issuers are reluctant to impose the strictest fraud fighting technologies," Nilson Report Publisher David Robertson said in the Jan. 6 release.
Dive Insight:
Losses due to payments fraud have been growing in recent years, particularly in light of the increase in e-commerce sparked by the COVID-19 pandemic that began in late 2019. The impact has been keenly felt by U.S. companies and consumers.
The Federal Trade Commission said last year that U.S. fraud loss reports, including those related to payments, topped $10 billion for the first time in 2023. That was a 14% increase in losses over 2022.
In its report this month, Nilson put a finer point on those losses with respect to payments. Worldwide payment card fraud losses rose 1.1% in 2023, over the prior year, to $33.83 billion, the report said.
On the positive side, that increase was much smaller than the 4.7% global growth in spending at merchants and cash withdrawals from ATMs in 2023, the report noted. However, on the negative side, the U.S. has become a big target for such fraud. And that’s despite a worldwide improvement in fighting fraud, the release said.
The U.S. accounted for about a quarter of worldwide card spending, but endured about 42% of global fraud losses, Nilson said.
The amount of money lost to fraud, relative to overall card transactions, declined to 6.58¢ per $100 in 2023, compared to 6.81¢ per $100 in 2022, Nilson said. But that doesn't stop the overall loss figures from climbing.
"The industry keeps growing," Roberson said by email. "So even though fraud fighting is strong and steadily improving, secular growth in card sales keeps the dollars lost from declining."
