By David Poole, Business Developer Director at MYPINPAD.
I was fascinated to read the latest fraud figures as reported in The Nilson Report this week. Worldwide card fraud is up 15% to $16b in 2014. Read that again – $16b that could potentially solve some austerity problems not to mention poverty. I dare say many organisations would love to be reporting >15% top line revenue growth.
The USA accounted for 48% of these losses. But a very important detail should not be omitted; this figure is over 21% of the purchase volume only. While this globally represents 5.65 cents in every $100 spent, the USA has more than doubled that at 12.75c per $100, and over the last five years the figure has increased each year.
The Nilson Report wisely suggests that the main cause of this rise in the US is the lack of EMV -compliant infrastructure. If implemented correctly, EMV capable card acceptance technology will help reduce this significant figure.
Nonetheless, personally I feel that while EMV adoption in the USA is going to curtail the production of fraudulent cards, it is not going to fundamentally halt the trend.
The gap between USA fraud levels and the rest of the world has been present since the 1990s. In other words, since the rest of the world adopted PIN as opposed to signature. Debit PIN fraud in USA represents a mere 1.30c per $100, the lowest rate found in the report
Of course many factors are at play here but fundamentally PIN adds an entire second factor of authentication and can be used to secure physical, mobile and e-commerce transactions alike. It is an effective system that is working without question in Europe, and which protects all stakeholders in the payment chain.
That’s why I firmly advocate two things: firstly the USA is mad not to universally adopt PIN and, secondly, the industry should embrace the technology of MYPINPAD which enables secure use of PIN on any mobile device and combine it with other authentication factors such as biometric to make the payment world much more secure for e- and m-commerce. What’s not to see?