Despite credit card fraud growing at a rate of 20 percent in the United States and 65 percent in Europe as a percentage of total transaction volume, card fraud is miniscule and virtually immeasurable, according to a recent study by Datamonitor, New York.
The study also said that while credit card fraud doubled last year in the United Kingdom, fears that the Internet is a gold mine for criminals is highly exaggerated. Despite the worldwide price tag of $2 billion, card fraud is being fought successfully by a number of methods, including voice and fingerprint recognition systems and smart cards.
Still, credit card issuers and banks must embrace safety measures and educate cardholders about online payments, the study said.
“Card issuers must look beyond short-term costs and realize the long-term benefits of chip cards,” the report said. “Card issuers must educate their customers as to the security of online payments.”
The report also said that as Europe increases the use of smart cards, criminals may turn to the United States, which has yet to adopt the technology on a large scale.
Also, as e-commerce grows, there is concern that e-payment fraud will increase along with it.
“Internet fraud, though small, is thought to account for a significantly higher proportion of fraud than the total value of transactions would imply,” said the study. “As the Internet grows, the concern is that the current rate of fraud will be maintained and a boom in e-payment fraud will be witnessed.”
The study noted that education is the best protection against card fraud, both online and offline. It suggests that consumers keep their personal information secure and use their cards in reputable stores and Web sites.
“Over half of online fraud is thought to take place on adult content Web sites,” the study said. “Informing cardholders about these high-risk areas and how to spot them will help combat fraud.”