Card Fraud On The Decline In France

There aren’t a lot of instances in the payments space of reports being released that show fraud rates on the decline.

But at least in France, the fraud rate for transactions fell for the first time in more than a dozen years. In fact, the annual report from the Observatory for Payment Card Security, published in July, reported that the fraud rate for transactions in France declined to .043 percent in 2014. This amount represented a value of 234.6 million euro (roughly $258.64), which was a slight drop from 2013’s figure of .046 percent, or 238.6 million euro (roughly $263.05).

Most importantly, the fraud rate for transactions in France fell for the first time since 2003.

Even more interesting was that the fraud rate for POS payments has also been on the decline for several years, and remains at an extremely low number. The report shows that 2014’s figures show fraud was .010 percent, which was also down from 2013’s figures of .013 percent. This decline came at a time when hacks on payment terminals are becoming more common.

And contactless payments? Well, that rate held steady, the report indicated.

The fraud rate for contactless payments — a new statistic to this year’s report — was at .015 percent. It was noted that the figure was half the rate of ATM withdrawals (.034 percent).

“It is noteworthy that virtually all the recorded cases of fraud were attributable to theft or loss of the card. On this topic, the Observatory points out that transaction ceilings limit the amount of fraud that cardholders can sustain in contactless mode and that holders will always be refunded by their bank in the event of unauthorized transactions,” concluded the Observatory’s report.

“The Observatory also stresses that so far contactless technology itself does not seem to have presented weaknesses for fraudsters to exploit. Furthermore, holders can always ask their bank to temporarily or permanently deactivate a card’s contactless capability or to provide a payment card that does not offer this capability,” the summary of the report continued.

As for the fraud rate for all cards issued, that figure stood constant at .069 percent, despite the increase in transactions. Card payments in France in 2014 totaled 575.9 billion euro (roughly $635.2 billion). In terms of the value of fraud, that figure rose 19 billion euro (roughly $20.9 billion), from 2013 to 2014.

Also in the declining fraud figures were the stats from fraud for card-not-present-payments. This figure dipped for the third year in a row, down to .248 percent from .269 percent. It was noted in the report that the rate was still much higher than the other fraud rates.

“The decline was aided by increased use of strong authentication for transactions, which in turn was supported by greater take-up of 3D-Secure type solutions by e-merchants (60 percent use such solutions compared with 43 percent in 2013),” the report concluded.

“Even so, against a backdrop of vigorous growth in online payments, the nominal value of online payment fraud continued to rise slightly to account for two-thirds of the total value of domestic fraud, whereas online transactions make up just 11.6 percent of the total value of card payments,” according to the report.

In its guidance, the Observatory also noted that “widespread introduction of strong authentication solutions remains a priority and will make it possible for participants to comply with guidelines from the Eurosystem and the European Banking Authority on the security of internet payments.”

That deadline is set to come into effect Aug. 1 of this year.

“These guidelines build in an assessment of the risks linked to the use of cards in online payments, in order to promote the emergence and use of authentication solutions that combine protection and ease-of-use for holders and merchants alike,” according to the Observatory’s report.

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