Australian businesses are losing an average of 74.7 cents per $1,000 transacted to card fraud, a noticeable increase a year earlier.
According to the Australian Payments Network (APN)’s Australian Payments Fraud 2017 report, total card fraud in Australia in 2016 totalled $534 million – well up on the $461 million recorded a year earlier.
The boom in e-commerce and chip technology is also leading to rapid increases in the rate of card-not-present (CNP) fraud, which accounts for the bulk of all card fraud recorded nationally.
Interestingly, while overseas card fraud accounted for high monetary losses ($242.1 million), domestic card fraud saw by far the highest rate of growth, soaring by 28 per cent year-on-year to reach $175.6 million.
“Fraudsters continue to use a variety of techniques. These include malware and phishing attacks to capture sensitive card data or cardholder passwords, and masking tools to try and bypass the risk-based rules used in fraud analytics products,” the report noted.
It points to a range of measures which are being pursued by the payments industry to combat this rise in fraud. As well as fraud detection tools and updating industry guidelines, there is an increasing move to three- or four-digit verification coding, new online authentication tools and tokenisation, whereby sensitive card information is replaced by a token that is of no value to fraudsters.
However, APN noted that while the half a billion dollars’ worth of losses incurred is substantial, it remains miniscule compared to the total volume of card and cheque transactions made.
The $540,200,415 in total fraud recorded in 2016 represents just 0.03 per cent of the staggering $1.869 trillion – yes, trillion – transacted on cards and cheques last year.
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.