The European Central Bank (ECB) and the European Banking Authority (EBA) have released a joint report on payment fraud, providing a detailed assessment of data reported semi-annually by payment service providers across the European Economic Area (EEA). The report covers various payment instruments, including credit transfers and card payments.
Key Findings:
– The total value of fraudulent transactions in the EEA amounted to €4.3 billion in 2022 and €2.0 billion in the first half of 2023.
– Most payment fraud, both in value and volume, was associated with credit transfers and card payments. In the first half of 2023, card fraud accounted for 0.031% of the total value and 0.015% of the total number of card payments. Similar fraud rates were observed for e-money transactions.
– Fraud rates were significantly lower for other instruments, particularly credit transfers (0.001% in value and 0.003% in volume). Impact of Strong Customer Authentication (SCA):
The report underscores the positive impact of the strong customer authentication (SCA) requirements introduced under the revised EU Payment Services Directive (PSD2). Transactions authenticated through SCA exhibited lower fraud rates than non-SCA transactions, especially for card payments. Notably, fraud rates for card payments were ten times higher when the counterpart was located outside the EEA, where SCA is not legally mandated.
Distribution of Fraud Losses
The report also reveals that losses from payment fraud vary by instrument and country. Most card fraud (71% of total value in the first half of 2023), as well as a significant share of credit transfer and direct debit fraud (43% and 47% respectively), involved cross-border transactions.
These findings highlight the importance of robust authentication measures and the need for continued vigilance in monitoring and preventing payment fraud across the EEA.
