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Online Fraud Prevention in Japan

Ecommerce fraud and online fraud prevention in Japan

Read below about payment fraud, online fraud and fraud prevention Japan

The growth of ecommerce and mobile commerce bring increasing risk of online and mobile fraud to Japan. Carefully tailored fraud prevention measures play an important part in countering fraudsters and protecting genuine consumers.

Credit card fraud in Japan has fallen from a high of USD 300 million in the 1990s due, in large part, to the introduction of EMV and the arrival of international fraud prevention providers. 
54% of major financial institutions issued chip cards in 2011 and the government is aiming to increase this to 80% by 2016.

Identity theft is a significant issue in Japan and, with it, account takeover and phishing attacks. In April 2014 it was reported that there were 50 cases of theft from online accounts held by Japanese businesses that month, with nearly JPY 200 million stolen – more than the total over the previous 12 months. In the same month, a subcontractor working for Yokahama bank had used personal data including PINs to withdraw USD 234,000 from 48 accounts.

Just as elsewhere, fraudsters have moved online and the Japanese Consumer Credit Association reported online credit card fraud of USD 65 million in 2011, a significant increase from 2010. This is likely to significantly understate the problem since a great deal of card fraud is not reported, with acquirers preferring to take the loss rather than jeopardise highly valued customer relationships.

Japanese consumers are generally comfortable with online shopping – enjoying the access it provides to larger merchants – and they are well protected from liability for online losses. Latest estimates point out that 75% of the population in Japan shop online. With 102 million internet users, the penetration rate stands at 80%. In 2013 there were 76 million ecommerce customers.

While online shopping accounted for just 5% of credit card transactions in 2013, both the number of transactions and the level of associated fraud can be expected to grow and Japanese merchants need to be better informed about online fraud prevention techniques.