European Central Bank reveals sharp decline in card fraud

The information included in the report was provided by 20 card payment scheme operators, and it offers insight into some of the most important card fraud trends. In 2021, this type of fraudulent activity followed a downward trend, falling to its lowest level since the start of the data collection procedure. 

It constituted 0.028% of the total value of card payments made using cards issued in the Single Euro Payments Area (SEPA), adding up to EUR 1.53 billion from a total value of EUR 5.40 trillion. In 2019, card fraud added up to EUR 1.87 billion from a total value of EUR 5.16 trillion. The highest share of card fraud observed to date was 0.048% in 2008.

The different types of card fraud

There are two primary types of card fraud, namely card-not-present fraud and card-present fraud. The first type involves remote fraud via online or telephone payments. In this case, fraudsters use card credentials obtained via phishing or other scams. With card-present fraud, bad actors use counterfeit cards at retail outlets or ATMs. 

In 2021, card-not-present fraud accounted for around 84% of the total value of card fraud, but it declined by 12% when compared to 2020 due to the implementation of strong customer authentication under the revised EU Payment Services Directive (PSD2). As for card-present fraud, it declined by 6% in 2021 when compared to 2020 thanks to the global roll-out of industry standards that helped minimise opportunities to commit magnetic stripe counterfeit fraud. 

The report also reveals that most of the card fraud in 2020 and 2021 involved cross-border transactions. Specifically, cross-border transactions accounted for 11% of the total value of card payment transactions, but they also accounted for 63% of the total value of card fraud in 2021.

The ECB is also keeping a close eye on the digital euro

In May 2023, the European Central Bank has invited identification and authentication experts to help develop rules for the digital euro. The announcement also revealed that the Chair of the Rulebook Development Group is setting up several dedicated workstreams to support the draft digital euro scheme rulebook. This planned digital currency from the EU will be stored in the EU Digital Identity Wallet, with support for peer-to-peer transactions.  

For now, authorities are setting up a workstream to establish the identification and authentication requirements for the digital currency. Impact assessments for different existing approaches to identification and authentication will also be analysed as part of the workstream.