Around 80 per cent of non-EU fraud against EU payment cards is committed in the United States | Europol
This Europol criminal threat assessment (pdf document – OCTA 2011: EU ORGANISED CRIME THREAT ASSESSMENT) is fascinating. It covers everything including drugs, smuggling, human trafficking and weapons.
But the financial section is what caught my eye. I have been vocal for years that it is time for banks to offer payment cards with only a chip and with no magnetic stripe. The detainment of the stripe is a classic case of building a compromise product based on the needs of the minority.
First the financial impact:
The EU is the world’s largest market for payment card transactions. In 2009 organised crime groups derived more than 1.5 billion euros from payment card fraud in the EU.
Now that we are almost in 2012, and 3 years later it is a safe bet that number will be higher. In my view it is unconscionable that banks permitted this to occur while the solution to a large percentage of that crime lies in their hands, while they hide behind regulations created by the card companies (ie themselves). That cost is a net cost and loss to society in some way, and it has to be covered by consumer and social costs at some point.
Some more statistics that are astounding but not at all surprising. (non-EMV compliant means countries that have yet to adopt chip cards.)
Since such data cannot be misused in countries in which chips are required, organised crime groups have deployed cells to non-EMV compliant regions. As a result, half the fraudulent withdrawals made with cloned EU payment cards are currently made outside the EU.
Around 80 per cent of non-EU fraud against EU payment cards is committed in the United States.
This means that in effect, Banks are allowing the country that retains miles and gallons to drive their payment card strategy.
Relevance to Bankwatch:
I want my bank to give me a chip only card. The implication is that I cannot use it at some (fewer and fewer) merchants and third party ATM’s. I can live with that inconvenience.