Author
Gerard is passionate about helping organisations understand about cybersecurity and cyber fraud. Through his informative content, he is helping Australians stay protected with secure digital controls.
Published
28/07/2022
Staggering Payment Fraud Statistics You Need to Know
Payment fraud isn’t just bad news for individual consumers; it’s also a huge drain on businesses that are defrauded every year. By 2030, payment card fraud losses are projected to hit $49 billion and it continues to grow rapidly year after year.
Here are some staggering payment fraud statistics that every business should know about to protect themselves from scammers and reduce the burden of payment fraud on their bottom line.
Author’s top picks
- According to the AFP, 78% of businesses experienced attempted or actual B2B payments fraud in 2020.
- Payment fraud is expected to continue increasing and is projected to cost $40.62 billion in 2027.
- Victims of credit card fraud under the age of 60 lose an average of $300 while those over 60 lose $1,100 on average.
- Almost 40% of cardholders do not have email or text alerts from their credit card company or bank enabled.
Payment fraud statistics
Card-not-present fraud is the most significant contributor to overall credit card fraud, accounting for 85% of all fraud on Australian cards.
(Savings.com.au)
Since the pandemic, card-not-present transactions have become more popular as customers and businesses make online transactions. So far card-not-present fraud has become the biggest contributor to overall credit card fraud costing millions of dollars.
E-commerce losses to online payment fraud were estimated at 20 billion U.S. dollars globally in 2021.
(Statista)
Due to the COVID-19 pandemic, movement restrictions were imposed across the globe, leading to an unprecedented increase in e-commerce. This resulted in an opportunity for fraudsters. According to Statista, the growth of online payment fraud is a staggering 14% compared to the previous year.
Fraud perpetrated in Australia using cards issued overseas increased by 16% to $95.4 million.
(AusPayNet)
Each year the Australian Payments Network collects payment fraud data demonstrating how dangerous fraud is on Australian credit cards when used overseas. Australian merchants come across various types of fraud perpetrated such as card-not-present, counterfeit/skimming, lost/stolen, never received, fraudulent application and other forms.
According to the AFP, 78% of businesses experienced attempted or actual B2B payments fraud in 2020.
(Mineraltree)
All sizes of businesses are affected by accounts payable fraud, which primarily occurs as a result of paper-based documents and manual processes. In addition, PYMNTS reveals that 85% of security professionals are unsure whether their organisations have implemented sufficient technology to protect against payment fraud.
92% of fraudulent online transactions in 2017 involved a credit card.
(Review 42)
In 2018, over $24 billion were lost worldwide due to fraudulent credit card transactions. Not only are business transactions being affected, but consumers that rely on business security to safely purchase online goods are impacted.
64% of attempted or actual payments fraud were due to actions of an individual outside the organisation.
(MSCCM)
Payment fraud is a threat that businesses must protect against. To do so, they must educate their employees about payment fraud practices and rely on technology and methods to prevent it. CFOs can start by building a cybersecurity culture to raise awareness of payment threats and risks.
In 2021, checks (66%) and ACH debits (37%) were the payment methods most impacted by fraud activity.
(AFP Online)
Accounts payable departments that rely on traditional methods of payment are more vulnerable to payment fraud and check fraud. Fraudsters typically target AP departments via email, phone, or invoices.
Payment fraud is expected to continue increasing and is projected to cost $40.62 billion in 2027.
(Merchant Savvy)
Payment fraud losses have more than tripled since 2011 and are expected to exceed $40 billion by 2027 according to the Global Payment Fraud report. The financial impact can be devastating to look at for all individuals.
20% of reported payment frauds were carried out by internal and external perpetrators colluding.
(Merchant Savvy)
All CFOs and Accounts Payable (AP) teams should be alert to internal perpetrators, also known as insider/internal threats. Since they have access to company data, employees with malicious intent often cause more harm than external perpetrators.
70% of businesses believe fraudsters committing business payment fraud are ahead of the industry.
(Mastercard)
Every year, scammers come up with innovative ways to scam businesses. The growing threat of payment fraud is taking a toll on the reputation of financial institutions, and consumers are at risk. Fraudulent transactions can occur when fraudsters are impersonating suppliers and vendors through invoices, and executives through phishing tactics.
Online sellers will lose $130 billion to online payment fraud between 2018 and 2023.
(Juniper Research)
Fraudulent online payments account for 44% of finance professionals’ biggest concerns. Unusual purchase orders are a red flag that leads to billing schemes and cash leakages.
Credit card fraud statistics
Data from the Australian Payments Network shows that over the 2017-18 financial year, credit card fraud grew by 4.8% to $565 million – more than five times the amount lost to other scams put together..
(Savings.com.au)
Several financial institutions have partnered with the Australian Cyber Security Centre (ACSC) to combat cybercrime and credit card fraud. To remain reliable, banks are constantly looking for methods to improve secure transactions, including multi-factor authentication (pins, passwords, cards), BPAY, and PayPass.
According to a 2021 annual report, about 50% of all Americans have experienced a fraudulent charge on their credit or debit cards.
(Wikipedia)
Credit and debit card fraud can take many forms. To limit credit card fraud, you should take a close look at your accounts payable processes, set up security standards and policies around the matter as well as invest in technology solutions.
Victims of credit card fraud under the age of 60 lose an average of $300 while those over 60 lose $1,100 on average.
(NCOITP)
The crime of fraud does not end once the fraudster attacks his victims. The aftermath of a credit card fraud can be damaging, as they can now use the information they gathered to steal or misuse it. Fraudsters are always planning how to take advantage even after an attack.
A 75.1% male population with an average age of 34 was found to commit credit card fraud in the United States.
(USSC)
Fraudsters are more likely to be males in their 30s, according to the 2019 United States Sentencing report. However, one shouldn’t assume that all fraudsters are the same age or are just a few individuals. There is no age limit to the types of criminal activity hackers engages in. A device or network is all that is required to perpetrate such malicious acts.
In 2021, credit card fraud made up 389,737 reports of the top 5 types of identity theft.
(FTC)
Other than Credit card fraud, there are other types of fraud, including government documents fraud, benefits fraud, loan/lease fraud, bank fraud, and employment/tax-related fraud. Fraudsters have a range of methods they can use to steal money from your bank account.
Fraud on bank and credit card transactions rose 9.2% to $490 million over the 2020-21 financial year.
(ABC News)
If you discover a fraudulent withdrawal from your bank account, contact your bank immediately. It may be able to prevent further withdrawals from occurring. You may be able to stop fraudulent transactions from happening if you report the matter to the bank quickly enough.
In 2014, CNP fraud on Australian cards rose 42%, to $299.5 million (AUS), with two-thirds of this amount ($200.7 million) a result of overseas transactions.
(US Payments Forum)
this amount ($200.7 million) a result of overseas transactions. (US Payments Forum)
More and more consumers are relying on electronic and online transactions as one of the most preferred Card-Not-Present transactions. There are, however, a few drawbacks such as the lack of card protection in the case of large data breaches leading to fraud.
Nearly half of all American adults have had a fraudulent charge on their credit/debit cards with more than one in three card holders having experienced card fraud more than once.
(Security.org)
Multiple fraudulent charges are common in the United States. According to research, 23% of respondents say they had a fraudulent charge on a credit card at least once, whereas 9% of individuals had been charged over 4 times.
Almost 40% of cardholders do not have email or text alerts from their credit card company or bank enabled.
(Security.org)
For small businesses, it is vital to invest in security options for payments. Set up security alerts and email notifications to protect your business. Additionally, the use of complex passwords combined with pin codes can stop 99% of attacks.
Aussie card details were up for grabs on the dark web, selling between $1.40 and $26 with about 80% of the card details for sale.
(CyberSecurityConnect)
Hackers have found a way to find cards without damaging databases, and their numbers are also being sold on the dark web. Hackers can do this using brute force attacks, which is the process of having computers guess your passwords in a short amount of time before finding the right combination.
(Mozo)
To reduce your risk of online payment fraud, the Australian Payment Network suggests that you employ your financial institution’s fraud prevention options at all times. For instance, this involves fraud alerts that push notifications through to your phone anytime your account is used.
Authorised push payments (APP) fraud statistics
According to the figures from banking trade body UK Finance, APP fraud rose from £208 million in the first half of 2020 to £355 million.
(Finextra)
Authorised Push Payments (APP) fraud is currently rampant in the UK. APP fraud is a scam involving fraudsters tricking their victims into willingly making bank transfers to the fraudulent account. This type of fraud is the most common among financial professionals.
In 2020, banks paid £207 million of the £479 million total cost of APP fraud, amounting to 43%.
(Finextra)
Businesses must verify an account number, BSB or invoice before they can confirm payments. One way to mitigate the risk of APP fraud is through verification. Verifying identity before payments of both parties is crucial for payment security.
A total of £57.1 million was lost to purchase scams in 2020, with the vast majority of losses being from personal accounts.
(UK Finance)
One of the most common scams that lead to APP fraud is a business email compromise (BEC). This involves an impersonator submitting a fake invoice to your account department, requesting that you send the payment and informing you that your account details have changed. Without any form of verification or phone call-back procedure, you’ll never know for sure where your money has gone.
93% of fraudulently obtained transfers are sent over a Faster Payments network so the banks have little time to intervene and prevent the criminal from moving the funds.
(Payments Card and Mobile)
During the first half of 2017, Australian companies were the second most popular target for BEC scams such as CEO fraud. In other words, more than 27% of global BEC attacks were in Australia.
Combined losses reached $227 million in 2021, compared to $128 million lost to business email compromise reported from the previous year.
(IT News)
According to reports from Scamwatch, large enterprises suffered a median loss of $4200 whereas smaller companies lost an average of $8000 to BEC scams and payment redirection. Emails are the main distribution channel used to perform this scam.
Counterfeit/Skimming fraud statistics
(CreditDonkey)
Skimming is a popular technique by which fraudsters steal credit card details by using a device attached to an ATM or a merchant’s terminal. Credit card counterfeiting is more common than people think. Using this information, a counterfeit card is then created to commit fraud.
Counterfeit/skimming fraud dropped by 34.1$ to $11.1 million reaching another record low in Australia.
(AusPayNet)
The prevalence of counterfeit/skimming fraud in Australia has declined since the adoption of digital payments. The COVID-19 pandemic illustrates that restrictions and lockdowns have accelerated the previously occurring shift towards online payment channels. Due to the increased use of online transactions, fraud continues to increase.
Counterfeit/Skimming incidents were the second largest category accounting for 32% of all fraud.
(AIC)
Over 50% of all fraud cases in Australia are related to Card-Not-Present transactions, according to the Australian Institute of Criminology. Small businesses have found methods to make payments securely through the use of Apple Pay, Samsung Pay, and Google Play.
According to APCA, almost $35 million was skimmed from Australian-issued credit, debit and charge cards both in Australia and overseas in the financial year from 1 July 2009 to 30 June 2010.
(Crime Prevention NSW)
This decrease in Counterfeit/skimming fraud is believed to be the result of financial institutions responding to a series of skimming attacks on ATMs and EFTPOS terminals. In addition, the gradual implementation of EMV chip technology has reduced skimming fraud on Australian-issued credit cards.
