Payments

10:15 AM
Connect Directly
RSS
E-Mail
50%
50%

Card Fraud Costs U.S. Payment Providers $8.6 Billion Per Year

The first line of defense is encryption, according to an Aite Group report released today.

Card fraud costs the U.S. card payments industry an estimated $8.6 billion per year, according to a report released today by Aite Group. Though this sum is small compared with the $2.1 trillion in total yearly U.S. card volume, this area remains troubling for the industry. Fighting card fraud effectively involves triage and telepathy — picking appropriate battles to fight while anticipating fraudsters' next steps based on the rapidly evolving technological landscape, Aite's analysts say. Card technologies in the United States are unlikely to be universally upgraded anytime soon due to prohibitively high implementation costs and the loss of signature interchange. Given the relative speed and cost efficiency for deployment, the most practical method of mitigating card fraud today would be based around end-to-end encryption, they say.

"Criminals need access to deep seams of card data," said Nick Holland, senior analyst with Aite Group and author of this report, in a statement. "Cutting off the supply of data via a national-level deployment of end-to-end encryption would significantly reduce counterfeit and lost and stolen card fraud."

Comment  | 
Print  | 
More Insights
Register for Bank Systems & Technology Newsletters
White Papers
Current Issue
Bank Systems & Technology Oct. 14, 2014
Bank Systems & Technology's new Must Reads is a compendium of our best recent coverage of customer analytics. Learn what big data means for banks, meet Wells Fargo CDO Charles Thomas, find out how to connect with your Gen Y customers, and more.
Slideshows
Video
Bank Systems & Technology Radio
Archived Audio Interviews
Join Bank Systems & Technology Associate Editor Bryan Yurcan, and guests Karen Massey and Jerry Silva from IDC Financial Insights, for a conversation about the firm's 11th annual FinTech rankings.