Report: CNP fraud to balloon to $7B by 2020
Iovation, a provider of device intelligence for authentication and fraud prevention, has teamed with research and advisory firm Aite Group to release a new study, “EMV: Issuance Trajectory and Impact on Account Takeover and CNP.”
The report forecasts that card-not-present fraud will cost retailers and financial institutions $7.2 billion in the United States by the end of 2020, according to a news release about the study
The report also projects that the cost to financial institutions of account takeover losses — i.e., a fraudster poses as a customer, gains control of that individual’s account and makes unauthorized transactions — will increase from $644 million in 2015 to more than $1 billion by 2020 in the U.S.
Also by 2020, counterfeit card fraud for card-present transactions will fall from a high of $4.5 billion in 2016 to less than $1 billion in 2020, the report projects. This figure is based on the report’s assumption that 81 percent of credit and 57 percent of debit cards in the U.S. will be EMV capable by the end of 2016.
“As the U.S. migration to EMV progresses, the combination of continued strong growth in e-commerce, ready availability of consumer data and credentials in the under-Web, and disappearing counterfeit fraud opportunity will create a perfect storm that will result in a sharp rise in CNP fraud,” said Julie Conroy, research director at Aite Group.
Conroy went on to say, “CNP fraud is already on the rise, and the problem will get worse before it gets better.”