Some recent reports are saying that credit card fraud has dropped. According to the latest, but not officially released, CyberSource report, U.S. and Canadian fraud losses are down 18% to $3.3 billion this year. That doesn’t appear to coincide with a drop in retail sales. The same report says that the fraud rate is down to an unprecedented 1.3%. That is an eleven-year low. These are interesting statistics and perhaps I can provide a bit of insight on why there is a sudden and significant drop.
I’m sure that more awareness and more extensive implementation of fraud screening has a lot to do with it. A service like IP Geo-location is one of the quickest and easiest fraud screening methods available and merchants are catching on. There’s also no doubt that the newest weapon against fraud, device reputation has had an impact.
Maybe, and hopefully, PCI compliance has had the biggest impact. I reported back in September that the payment industry is now forcing compliance on even the smallest merchants. I’d be willing to bet that almost every merchant, large and small, either is compliant or has gotten a notice that they have to be or they’ll be fined large sums.Like it or not, October is the cut-off date. PCI compliance can be expensive in terms of dollars and time, but I support it because I believe that if properly implemented it will reduce fraud and this year’s statistics seem to verify that.
But is the rate really down this year? Merchants, I’d like to hear your take on this so feel free to leave a comment!
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