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Card fraud in the UK

By davebirch posted Apr 26 2007 at 8:23 AM

[Dave Birch] Following from Paul Marsh of APACS, I thought I'd post a few figures.  The basic UK picture is that online banking crime is going up while card and cheque fraud is falling.  The APACS figures that Paul was kind enough to discuss with us show that card fraud losses fell by three per cent in the past year to £428m, a decrease of nearly £80m over the past two years.  But online banking fraud is up 44% from £23.2m in 2005 to £33.5m in 2006.  As had been hoped, chip & PIN has reduced card fraud at POS.  As had been expected, some of this fraud has been displaced into Card-Not-Present (CNP) channels to the extent that CNP now accounts for half of all fraud.  Fraud on UK cards overseas has increased because the stripes are counterfeited and the PINs are then used to withdraw cash at foreign (non-chip & PIN) ATMs.  To put total fraud losses further into context, however, losses as a percentage of plastic card turnover are now below 10 basis points compared to 14 basis points before the chip & PIN migration.  Cheque fraud fell by another quarter.

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The march of chip & PIN continues.  More than 340 million payment smart cards shipped in 2006, complying largely with the EMV standard.  There has been a dramatic increase of the share of DDA (Dynamic Data Authentication) within EMV cards - which more than doubled - to now represent more than 27% of all EMV cards shipped in Q4 2006.  Note: this dramatic increase has bypassed the UK, where almost all cards are SDA (Static Data Authentication).  Open platform cards (comprising cards based on Java Card and Multos) now account for almost 10% of the global shipments and, most relevant to some of my recent work with card issuers in Europe, 12% of the cards shipped have their data storage capability enabled at issuance for value-added applications, such as: loyalty, access control, ticketing, etc.  So, cards have better security (sufficient to add PKI and other security-based applications), they're beginning to ship with more memory for non-payment uses and they're starting to become multi-application platforms.

These opinions are my own (I think) and presented solely in my capacity as an interested member of the general public [posted with ecto]


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