PALO ALTO, Calif. - A new analysis from Frost & Sullivan reveals that losses to card fraud totaled $7.9 billion in 2004 and is estimated to reach $15.5 billion in 2009. Those losses are pushing EMV adoption throughout most of the world.
According to a news release, EMV migration has been driving the world toward a common payment standard and is the main tool to fight fraud. Payment associations have set EMV migration deadlines or liability-shift timelines for all key regions, and banks and merchants are migrating to smart cards to avoid risk.
"However, many regions with low fraud levels like the United States and Australia lack a valid business case to make the huge investment for upgrading their existing payment infrastructure to accept chip cards," added Frost & Sullivan Research analyst V. Aravindh. "This situation could change as fraud migrates to these countries from neighboring regions who have secured themselves with EMV."
Last year, cross-border fraud increased rapidly in countries like Germany and Italy, since the United Kingdom and France are on their way to fully implementing EMV. Similarly, ATM fraud has seen a surge in the U.S. in the last year, with Canada and Latin America securing their debit cards by chip-enabling them.
The last few years also have seen a phenomenal growth in the number of phishing sites. Through phishing a fraudster collects PINs, passwords and credit card details from unsuspecting victims. "The United States accounts for more than half the illegal sites on the Internet and losses to online fraud are greater than $500 million annually," Aravindh said.
Card associations are taking preventive measures to win back consumer confidence in online payments, which includes putting systems in place like "SecureCode" by MasterCard and "Verified by Visa" authentication for Visa cards.
For more information, visit www.frost.com.
Read also, EMV: When will it hit the United States?
