Card fraud costs U.S. payment providers $8.6 billion per year

Card fraud costs the U.S. card payments industry an estimated $8.6 billion per year, according to a report released today by Aite Group. Though this sum is small compared with the $2.1 trillion in total yearly U.S. card volume, this area remains troubling for the industry. Fighting card fraud effectively involves triage and telepathy — picking appropriate battles to fight while anticipating fraudsters' next steps based on the rapidly evolving technological landscape, Aite's analysts say. Card technologies in the United States are unlikely to be universally upgraded anytime soon due to prohibitively high implementation costs and the loss of signature interchange. Given the relative speed and cost efficiency for deployment, the most practical method of mitigating card fraud today would be based around end-to-end encryption, they say.
"Criminals need access to deep seams of card data," said Nick Holland, senior analyst with Aite Group and author of this report, in a statement. "Cutting off the supply of data via a national-level deployment of end-to-end encryption would significantly reduce counterfeit and lost and stolen card fraud."