18 June 2015


The latest Australian Payments Clearing Association report [PDF] on Australian payment systems fraud indicates that the overall proportion of fraud in credit card transactions has increased from 33.7¢ per $1000 to 58.8¢ per $1000 since 2009, with $387 million fraudulent credit card transactions in 2014. 77% of that activity was overseas, primarily online.

The total value of fraud on cards  accounts for 0.06 per cent of the amount spent using cards and 0.026 per cent of the total number of card transactions.

In 2014 fraud rates on "card-not-present" transactions (inc online and over-the-phone transactions) increased to around $300 million. The overall value of online transactions using credit and debit cards in 2014 was up by 5 per cent to $657 billion.

The report indicates that card skimming  has declined by 25% since 2009.

Fraudulent use of lost and stolen cards was flat at around $33 million.

The rate of cheque fraud fell from 0.6 cents to 0.5cents in every $1,000 transacted. The overall amount of cheque fraud fell by 9 per cent to $6.5 million, against a 1% increase to $1,229 billion in the total amount transacted on cheques.

The report notes
The payments industry has implemented a range of measures to help prevent card-not-present fraud. These include:
  • additional information to verify that the card details are valid and that the person  providing them is the genuine cardholder – such as the 3 or 4 digit code written on the card itself, and the stronger online authentication tools: American Express SafeKey, MasterCard SecureCode or Verified by Visa; 
  • fraud detection tools used by merchants,card schemes and financial institutions to identify risky or unusual purchases made with the card; and
  • requiring that merchants comply with the Payment Card Industry Data Security Standard (PCI DSS) to strengthen data security and reduce the risk of card details being stolen.
The industry is also undertaking a major structural upgrade to payments technology known as Tokenisation. This technique replaces sensitive information, such as a card number, with a non-sensitive replacement value making it much more difficult for criminals to steal and make use of card details. Tokenisation is expected to have a significant effect on reducing card-not-present fraud once it is widely rolled out.