News

US debit card fraud down 28 percent in year following EMV rollout

August 15, 2017

In the time since the fraud liability shift for most debit transactions in October 2015, an estimated 80 percent of U.S. debit cards have been converted to chip cards.

The immediate result was a drop of approximately 28 percent in fraud rates from 2015 to 2016, according to the 2017 Debit Issuer Study commissioned by Pulse, the ATM and debit network owned by Discover Financial Services.

Still, the 12th edition of the study confirmed that fraud continues to challenge issuers. Financial institutions in the U.S. lost an estimated $900 million to debit card fraud in 2016. 

Mobile wallet enrollment findings from the study show that:

• 3 out of 4 issuers now support debit cards being loaded into at least one mobile wallet;
• mobile wallet enrollment among consumers has increased, with Apple Pay remaining the most popular of the big three "Pays," which also include Android Pay and Samsung Pay;
• enrollment of debit cards in Apple Pay increased 80 percent in 2016; but
• the use of debit cards in mobile wallets remains low; the three Pays account for only about one-quarter of 1 percent of U.S. debit transactions.

The study also found that debit transactions continue to grow:

• transactions in 2016 rose at an average rate of 7 percent year-over-year according to issuers polled in the study;
• the number of debit transactions per active consumer card reached a record high of 23.6 per month in 2016, a 6 percent increase year over year; and
• the number of debit cards increased 1 percent year-over-year.

"This year's study confirms that debit remains a core part of the expanding payments landscape, even as new forms of payment emerge," said Steve Sievert, Pulse executive vice president of marketing and brand communications. "The average consumer now uses their debit card 39 percent more often than they did in 2010 — and for more transactions of lower value, indicating that debit is a fundamental financial tool for their everyday lives."

The 2017 Debit Issuer Study was commissioned by Pulse and conducted by Oliver Wyman, an independent management consulting firm. The study polled 50 financial institutions that collectively have issued approximately 134 million debit cards. The sample is representative of the U.S. debit market in terms of institution type, geography and debit network participation.