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Global Card Fraud Losses Reach $11.27 Billion
Monday, August 19, 2013 7:00 AM

All credit, debit, and prepaid general purpose and private label payment cards worldwide generated $21.604 trillion in total volume — combined purchases of goods and services and cash advances and withdrawals — in 2012, up 11.4 percent from the prior year. Issuers, merchants, and acquirers reportedly experienced gross fraud losses of $11.27 billion, up 14.6 percent over the prior year. Of that $11.27 billion, card issuers lost 63 percent and merchants and acquirers lost the other 37 percent.

According to the Nilson Report, gross fraud losses equaled 5.22¢ per $100 in total volume, up from 5.07¢ per $100 in 2011. Although fraud as a percentage of total volume has increased over the last two years, this comes after remaining essentially flat for the prior eight years, and it remains near the historical low.

Fraud as percentage of total volume was lowest for PIN-based debit networks worldwide at 1.10¢ per $100 in total volume. The global card brands — Visa, MasterCard, American Express, UnionPay, Diners Club, and JCB — averaged fraud losses of 6.13¢ for every $100 in total volume.

Card issuer losses occur mainly at the point of sale from counterfeit cards. Issuers bear the fraud loss if they give merchants authorization to accept the payment.