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Australian Payment Network Reports 9.2% Increase in Payment Card Fraud

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AusPayNet reports that the e-commerce industry experienced a 9.2% rise in payment card fraud due to the pandemic.

According to a report by the Australian Payments Network (AusPayNet), there is a 9.2% increase in payment card fraud in the last 12 months due to a significant rise in online spending during the coronavirus pandemic. 

With card transactions rising from 4.5% during the same period. However, the fraud rate in 2021 was 57.8 cents on transactions up to  $1,000,  up from 55.8 cents per $1,000 in 2020.  

Card-Not-Present (CNP) scam is particularly affecting digital transactions, as e-commerce businesses experienced a loss of $442 million during the most crucial time of the lockdown situation in various parts of the country. Thus, CNP accounted for 90% of fraud on Australian cards. In addition to this,  Lost-and-Stolen Card (LSC) fraud decreased 9.2%, and skimming scams also reduced by 37.3%.

However, the CEO of AusPayNet, Andy White stated that growing e-commerce trends are driving fraudulent activities.

“Online transactions continue to grow strongly and inevitably this attracts the attention of organized fraud groups,” Mr. White said. “Industry-wide efforts to mitigate CNP fraud will remain critical, but we all need to remain vigilant when transacting online,” he added.

CNP fraud is carried out by using legit card details usually stolen from victims to make online purchases or other online payments without the card being present at the time of the transaction. Customers are not accountable for the financial losses under this scheme and will be refunded, as long as they protect their confidential data.

Due to the rising concerns, the regulatory bodies have coincided to develop CNP Fraud Mitigation Framework for the next year. However, online retailers also agreed upon introducing strong customer verification. This initiative will be backed by advanced technologies to monitor customer activities in real-time.

“We expect to see the full benefit of the CNP framework as we emerge from the pandemic,” Mr. White said.

After the inaugural meeting of AusPayNet’s Economic Crime Forum (ECF), this payment fraud data were published. EFC states that industry stakeholders have to collaborate with the regulatory bodies to counter the economic crimes including payment card frauds, and other financial-related cyberattacks.

“Alongside our focus on CNP fraud, last month we launched our scams strategy. Over the coming year we look forward to working with industry to reduce the impact of scams on vulnerable businesses and individuals,” Mr. White added.

Suggested Read: Holiday Season – The Prime Time for ID Thieves and Financial Criminals

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