According to the latest FICO banking analytics blog, 25 years ago, European payment card fraud losses were at 15 basis points. Chances are that the actual numbers were considerably higher, since fraud reporting had not developed to the level it is today. Since then, commercial payment card volume has increased ten-fold. Such growth is usually accompanied by an increase in all forms of fraud and abuse, as evidenced for example in the telecommunications industry.
Nevertheless this did not happen in the payment industry. To the contrary, European card fraud losses are currently four basis points or less. That’s a 75% drop in 25 years! The fraud rate is one quarter of what it was!
FICO believes that there are several reasons for this success. The main two, are the implementation of the chip and the introduction of increasingly sophisticated fraud prediction systems, which alert the issuer (and acquirer) in real time by scoring the authorization request.
To read the full story click on the link: FICO Bankinganalyticsblog