Debit and credit card fraud is more common than ever but in some countries, like the United States, the problem is much more prolific.
One recent survey finds that 27% of cardholders (debit, credit and prepaid) around the world have experienced fraud in the past five years. Rates of fraud vary across countries but in Mexico and the United States are more prone to fraud with 44% and 42% of respondents there saying they've experienced card fraud.
The report from Aite Group and ACI Worldwide, which surveyed over 5,000 consumers in 17 countries, notes that U.S. consumers are heavy card users--"more card use means a greater likelihood for card fraud."
Another reason the U.S. ranks high on the fraud list: It is not on the EMV standard. EMV is short for Europay, Mastercard and Visa. It is a standard followed by most European countries to ensure card security via microchip in credit and debit cards.
"EMV provides an extra layer of security for consumers which have helped drop the fraud levels down in Europe," says Mike Braatz, senior vice president, payments fraud, and ACI Worldwide.
The EMV standard is expected to begin in the U.S. beginning in 2013 but Braatz says it will take several years before it's fully implemented. Why? Systems across the country need to be updated to read and accept the chips. Issuing banks like Bank of America, Citi, JPMorgan Chase and others would have to update their ATMs and card systems, for instance.
EVM could help explain why most countries with the lowest frauds in the survey are primarily European. The Netherlands and Sweden are at the bottom of the card fraud list with just 12% of consumers there experiencing fraud in the last five years.
Perhaps not so surprising is that credit card fraud is more common than debit card fraud in most of the 17 countries. But again the U.S. and Mexico have the highest rates there with 37% of respondents experiencing credit card fraud. Just 8% of consumers in The Netherlands reported the same.
Mexico's high fraud rates can be attributed to among other things its high levels of organized crime and drug cartels. "It also has easy access to U.S. cities along the border where counterfeit cards and fraudulent accounts can be used," says Braatz.
In Canada, the percentage of cardholders impacted by credit card fraud is only 19%, far lower than its North American neighbors, but still almost one out of every five people.
When it comes to debit card fraud the United States comes in fourth place with 20% of consumers there reporting fraud in the last five years. That's behind 25% in Mexico, 24% China and 21% in India.
At the bottom is Germany with just 6% of its consumers reporting debit card fraud.
Perhaps more concerning is the fact that 14% across the survey saying they've experienced debit of credit card fraud more than once during the past five years. That's up from 6% in the 2011 survey--a statistically significant increase, Aite Group says.
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