Extra pass codes can defeat card fraud

10/12/2009

Overall, there were more than half a million cases of card fraud in Australia last financial year. There were 481,000 individual fraudulent transactions recorded by the Australian Payments Clearing Association on credit and charge cards for the year, up from 413,000 last year.

The rate of fraud was 0.0245 per cent of all transactions, up from 0.0220 per cent last year. However, the average value of each fraudulent credit/charge card transaction was slightly down for the year, and the total value of fraud compared to the total value of all transactions was also down.

Recent efforts by the card schemes and issuers to improve security and detect possible fraudulent transactions may be starting to pay dividends.

The United Kingdom has recorded its first-ever fall in card not present card fraud in the first half of 2009.

“We are really encouraged by the UK fraud figures,” said APCA chief executive Chris Hamilton.

“I think they are attributing that good result to the two factor authentication introduced by the schemes and extra monitoring by institutions. These are the same things that we are doing here. Institutions are getting really good at real time monitoring of suspicious transactions and the two factor authentication will also help.”

Visa and Mastercard have both introduced additional steps for authenticating transactions and are trying to encourage merchants to participate.

“‘Verified by Visa’ and ‘Mastercard SecureCode’ are obviously the way forward for the industry to deal with CNP fraud,” Hamilton said.

“It is a bit inconvenient to card holders to have to supply an extra pass code but the message we are getting out is that it is important and well worth it in the long run.

Source: The Sheet

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