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6 Fraud by Type of Card
6 Fraud Inside vs. Outside U.S.
7 Growth in Fraud vs. Card Volume
7 Card Fraud Projected Worldwide
8 Acquisitions in Loyalty
10,11 Latin America’s Largest Issuers
of General Purpose and Visa/
Mastercard Cards
2 – 4 Fast Facts
4 Investments & Acquisitions
September 2017
INSIDE CHARTS
Card Fraud Losses Reach $22.80 BillionPayment card issuers, merchants, acquirers of card transactions
from merchants, and acquirers of card transactions at
automated teller machines (ATMs) incur losses to fraud. Last
year, gross fraud losses reached $22.80 billion, up 4.4% over
2015. Costs incurred by issuers, merchants, and acquirers for
their operations, call centers, and chargeback management are
not included in that amount.
Fraud is measured against the total worldwide volume of
goods and services purchased combined with cash advances
and withdrawals from credit, debit, and prepaid card products.
Total volume is generated by all general purpose and private
label global brand and domestic-market-only credit, debit, and
prepaid cards worldwide. Last year, total volume reached
$31.878 trillion. That figure includes ATM withdrawals outside the global networks. It does not include spending on dozens of
noncard alternative payment systems used for ecommerce such
Six Group Payment ServicesCombined cardholder and merchant account processing transactions handled by Six Payment Services reached 3.60 billion last year. The company dominates the payment card processing business in Switzerland, Austria, and Luxembourg and handles
Retriever Medical Payments Acquiring
Last year, Retriever Medical/Dental Payments acquired $3.79 billion in card payments on behalf of U.S.-based healthcare providers. The company, which ranked 52nd largest based on Visa/Mastercard dollar volume among U.S. acquirers, is the largest that
Collinson Expands Card-Linked OffersCollinson Group has expanded in the U.S. with the purchase of select assets of Linkable Networks, provider of technology that supports card-linked offers on both self-service and SaaS-based platforms. Terms were not disclosed.
American Express Loans for Small BusinessesMerchant Financing, a noncard loan product for small businesses in the U.S., was launched by American Express in 2011. It permits merchants that accept American Express card products to obtain six-month, one-year, or two-year financing on up to $2 million.
First Data Disbursements to Debit CardsThe largest U.S. acquirer based on the number of merchant locations served sees opportunity for new transaction processing business by linking insurance companies, marketplaces, medical insurance companies, and online lenders wanting to make payouts
Top Card Issuers in Latin AmericaThe 50 largest general purpose payment card issuers in the Latin America and Caribbean (LAC) region ranked by spending for goods and services collectively accounted for $1.114 trillion in purchase volume in 2016. Collectively that group issued ‘06 ‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16‘07
4.78¢
4.75¢4.46¢
4.81¢ 4.82¢5.07¢
5.22¢5.45¢
6.21¢
6.97¢7.15¢
© 2017 The Nilson Report
Card Fraud Worldwideper $100 of Card Volume
> see p. 9
> see p. 9
> see p. 5
> see p. 8
> see p. 8
> see p. 5
> see p. 6
VISIT US ONLINE AT WWW.NILSONREPORT.COM
FOR 47 YEARS, THE LEADING PUBLICATION COVERING PAYMENT SYSTEMS WORLDWIDE OCTOBER 2017 / ISSUE 1118
© 2017 HSN Consultants, Inc. THE NILSON REPORT
Conferences & Seminars
Cashless Payments Summit TRUSTECH 2017: November 28-30, 2017. The Palais des Festivals de Cannes, French Riviera, Cannes, France. Estimated attendance: 13,000+. Cost for the three-day conference is $1,100. Subscribers to The Nilson Report will receive a €200 discount. (Use code TTPAR1.) Contact Martin Blossier at Comexposium, 33 (1)
7677-1368, [email protected]. Register at www.trustech-event.com.
Finovate Middle East 2017: December 4-5, 2017. The Intercontinental Festival City Hotel, Dubai, UAE. Estimated attendance: 400+. Cost for the two-day conference is $1,395. Subscribers to The Nilson Report will receive a 20% discount. (Use code FKV2345NRT.) Contact Tyler Ferst at The Finovate Group,
(646) 895-7329, [email protected].
Register at https://finance.knect365.com/finovate-middle-east/.
Central European Digital Payments 2017: December 12-13, 2017. The Novotel Warszawa Centrum, Warsaw, Poland. Estimated atten-dance: 320. Cost for the two-day conference is $515. Subscribers to The Nilson Report will receive a 10% discount. (Use code CDEP Nilson.) Contact Kama Milewska at
Agencja Promocji Inicjatyw Gospodarczych,
48 (507) 199-793, [email protected]. Register at www.conkarta.pl.
THE U.S. SUPREME COURT has agreed to review a federal appeals court ruling that allowed American Express to continue to enforce an agreement in its contracts with merchants barring them from steering Amex cardholders to Visa, Mastercard, or Discover cards. Eleven states asked the top court to review the lower court decision.
DISCOVER cardholders can facilitate Cashback Bonus redemption for a statement credit through Apple Pay in just two touches. Discover is the first large credit card issuer to offer the ability to redeem rewards after a purchase through Apple Pay. Szabolcs Paldy is VP of e-business at Discover,
(224) 405-1747, [email protected],
www.discover.com.
HAWK INCENTIVES, a Blackhawk Network business, offers a prepaid Mastercard card for promotions and incen-tives. The Mastercard card is issued by MetaBank and can be added to major mobile wallets. Theresa McEndree is VP
of Marketing at Hawk Incentives, (972) 538-3902,
www.bhengagement.com.
TOUCHNET INFORMATION SYSTEMS, a business unit of Global Payments, provides technology that colleges and universities use to centralize and manage campus commerce including online tuition payments, ecommerce, and in-person purchases. Global Payments has expanded Touch-Net’s reach from the U.S. to Canada, the U.K., Western Europe, Hong Kong, Singapore, Australia, and Brazil. Daniel Toughey is SVP at Touchnet, (913) 310-1202, daniel.
[email protected], www.touchnet.com.
FISERV’S Instant Issuance Advantage wireless tablet technology enables bank or credit union tellers to greet cus-tomers and verify their identity in the lobby and offer them the opportunity to access personal information to instantly receive a permanent Mastercard-branded EMV-compliant debit card. Hal Cline is Director, Output Solutions at Fiserv,
(540) 751-0162, [email protected], www.fiserv.com.
IPAYMENT CAPITAL, a new business unit of merchant services provider iPayment, was established to offer merchant cash advance services to the company’s 137,000 small and midsized customers. Tomo Matsuo is SVP,
(818) 540-6596, [email protected],
www.ipaymentinc.com.
MERCHANT CONSULTING GROUP payment processing has been integrated into Parklolo’s cloud-based platform that establishes a communication channel for parking lots and drivers. Jonathan Arst is CEO at MCG, (978) 744-9090,
www.merchantconsultinggroup.com.
FICO has released new card-not-present payment card fraud detection models based on analysis of more than 4 billion transactions. The models will be available to FICO Falcon platform customers at no additional charge. TJ Horan is VP
for Fraud Solutions at FICO, (858) 369-8118, tjhoran@
fico.com, www.fico.com.
CAYAN has added EMV certification with TSYS to the Genius point-of-sale platform it offers retailers. EMV certification has also been achieved with Chase, Elavon, First Data, Vantiv, and Worldpay. Rachel Trueblood is SVP Marketing
at Cayan, (617) 607-4593, [email protected],
www.cayan.com. Tim Munto is Group Executive, Merchant
Services Segment at TSYS, (502) 693-1821, tmunto@
tsys.com, www.tsys.com.
SIX PAYMENT SERVICES, a card account and merchant account processor to customers in Switzerland, Austria, and Luxembourg, has deployed Inform’s Risk Shield fraud preven-tion and AML compliance technology to protect acquiring and card issuing businesses. Andrej Eichler is Managing
Director–Head Financial Industry Services at Six Payment
Services, 41 (58) 399-3212, [email protected],
www.six-payment-services.com. Andreas Meyer is EVP at
Inform, 49 (2408) 9456-5000, andreas.meyer@
inform-software.com, www.inform-software.com.
FAST
FACT
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INTERNATIONAL PAYMENT SERVICES (IPS) in Bahrain will purchase
BPC Banking Technologies’ SmartVista payment processing platform. Financial
institutions use SmartVista to manage credit and debit card issuing and ATM
acquiring. Ebrahim Janahi is CEO at IPS, (973) 1751-6004, [email protected], www.ips-inter.com. Angelo Bertini is SVP, Mng. Dir. at BPC Banking Technologies, (971) 5055-15090, [email protected], www.bpcbt.com.
ICCREA BANCA in Italy will open 70,000 POS terminals immediately, and
150,000 terminals eventually, to JCB cards. Antonio Galiano is Head of E-bank at Iccrea Banca, 39 (6) 7207-6143, [email protected], www.gruppobancarioiccrea.it. Tsuyoshi Notani is Managing Director at JCB Int’l, 66 (2) 256-9151, [email protected], www.jcbeurope.eu.
AMERICAN EXPRESS CANADA has launched Cobalt Card, a credit card
designed for young professionals. Cardholders earn 5x the points on food and
drinks, including groceries, making Cobalt Card Canada’s highest ongoing
points accelerator. Cardholders earn 2x reward points on travel and transit
including flights, hotels, subway fares, taxis, and gas. With a monthly fee of
$10, cardholders can earn up to 40,000 bonus points. Anne Parkhill is Director of Consumer Charge Products, (437) 836-5196, [email protected], www.americanexpress.ca/get-cobalt.
MASTERCARD’S Early Detection System alerts issuers to card accounts that
are stolen or exposed in data breaches. Using network insights, predictive
capabilities, and a combination of internal and external data sources, Early
Detection System sends an alert to issuers and quantifies the level of risk of a
card account. The issuer determines its next steps, which can include monitor-
ing transactions more closely to issuing a replacement card. Ajay Bhalla is President of Enterprise Risk and Security, 44 (207) 7557-5043, [email protected], www.mastercard.com.
MAHINDRA COMVIVA will be the technology partner for Panama-based
Geva Group, which will offer mobile financial services to telecom operators,
banks, financial institutions, and consumer packaged goods companies in
Central America and the Caribbean. Srinivas Nidugondi is SVP and Head, Mobile Financial Services at Mahindra Comviva, 91 (80) 4340-1913, [email protected], www.mahindracomviva.com.
UAE EXCHANGE INDIA offers a co-branded prepaid card in partnership with
YesBank. The card operates on the RuPay merchant acceptance network. UAE
Exchange offers foreign exchange, outward remittance, money transfer, air
ticketing & tours, loans, insurance, and share trading from 370+ direct
locations in India. Jos Babu is National Head-Digital at UAE Exchange India,91 (484) 2364274, [email protected], www.uaeexchangeindia.com.
SEMAFONE, provider of compliance and data security technologies for con-
tact centers, has achieved compliance with the latest Payment Card Industry
Data Security Standard-PCI DSS V3.2. Tim Critchley is CEO at Semafone, 44 (845) 543-0822, [email protected], www.semafone.com.
INGENICO EPAYMENTS offers the Ingenico Payment Solution for Market-
places, which collects all funds on behalf of the marketplace operator. Opera-
tors become agents of Ingenico, a licensed payment service provider. The new
service also handles KYC requirements, onboarding of new sellers onto the
platform, and commission management. Ludovic Houri is VP Product, 33 (6) 0715-4992, [email protected], www.ingenico.com/ePayments.
© HSN Consultants, Inc. 2017 THE NILSON REPORT 2OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
in
Asia-Pacific, United States, Europe, Latin America, Middle East-Africa, and Canada
1,073 Card Issuersfrom 114 countries in all world regions
282 Merchant Acquirersfrom 78 countries in all world regions
Figures include cardsincirculationandspending for
credit & debit
Order Todaywww.nilsonreport.com/specialreport
David Ross has been appointed Vice President of Business Intelligence
at PSCU, (727) 572-8822, [email protected]. Vijay Sondhi, formerly at
Visa, has been appointed Managing Director at FT Partners, (415) 992-8838, [email protected]. Matthew Maguire has
been appointed Chief Data Officer at CO-OP Financial Services, (909) 296-2796, [email protected]. Mark Bishopp, formerly
at BofA Merchant Services and Vantiv, has been appointed CEO at Amaryllis, (347) 922-1071, [email protected]. Koen Vanpraet, formerly at Credorax and GlobalCollect, has been appointed CEO at
PaySec, 32 (4) 7525-5382, [email protected]. Jason King has been
appointed Senior Vice President Sales, Enterprise Development at
Apriva, (702) 539-9950, [email protected]. Peter Caparso, formerly at
Adyen, has been appointed President, North America at Checkout.com, (617) 932-7000, [email protected]. Paul VanderMarck has
been appointed Managing Director at Financial Technology Partners, (415) 992-8839, [email protected].
Management Changes
© 2017 HSN Consultants, Inc. THE NILSON REPORT 3OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
Company Buyer/Investor
Amount
Country(mil.)
BILL PAYMENTS
Bill.com undisclosed round 1 $100.0 U.S.
CARD MANUFACTURER
Catalyst Card Co. private placement 2 * U.S.
CRYPTOCURRENCY
Korbit equity round 3 $80.0 South Korea
Luno Series B 4 $9.0 Singapore
Utrust pre-ICO round 2 $1.5 U.S.
HARDWARE
Posera FingerPrints POS SICOM 5 $12.2 Canada
LENDING
Cashplus senior debt facilities 6 $40.5 U.K.
Vai undisclosed round 7 * U.K.
LOYALTY
GreenJinn undisclosed round 2 $0.8 U.K.
Linkable Networks Collinson Group 5 * U.S.
MERCHANT ACQUIRING
Anovia Payments undisclosed round 8 * U.S.
iZettle debt funding 9 $35.4 Sweden
NMI equity round 10 * U.S.
Omise Series B+ 11 * Thailand
Pivotal Payments equity round 12 * Canada
Red Dot Payment Series B 13 $5.2 Singapore
MOBILE PAYMENTS
Ant Financial CK Hutchison 14 * Hong Kong
Dialogue Oxygen8 5 * Australia
Giftagram undisclosed round 15 $2.2 Canada
Glance Technologies private placement 2 $1.1 Canada
Seamless (Seqr) Tikvah 16 * Sweden
MONEY TRANSFER
Paul Merchants Ebix 5 $40.7 India
Remit2India UAE Exchange 5 * India
Company Buyer/Investor
Amount
Country(mil.)
TNG Series A 17 $115.0 Hong Kong
PREPAID CARD
Raise marketplace Series C 18 $60.0 U.S.
Swych Series A 19 * U.S.
PROCESSING
Fin. Transmission Net. debt fi nancing 2 $1.5 U.S.
GoCardless undisclosed round 20 $22.5 U.K.
ICP Paarl and Operando 5 * Germany
Mobi724 undisclosed round 21 $0.8 Canada
Nets consortium 22 $5,300.0 Denmark
NRT Technology Sightline Payments 5 * U.S.
NRT/Sightline Fifth Third Bank 23 * U.S.
Paywizard undisclosed round 2 * U.K.
Pineapple Payments equity round 24 $35.0 U.S.
Rezzcard Mobility Capital Finance 5 * U.S.
Vindi undisclosed round 25 $1.8 Brazil
SECURITY
CashShield Series A 26 $5.5 U.S.
TrustCommerce undisclosed round 8 * U.S.
SOFTWARE
Flux seed funding 27 $1.5 U.K.
YayPay undisclosed round 28 $5.3 U.S.
*Terms not disclosed. 1 Including JPMorgan Chase. 2 Investors not disclosed. 3From NXC. 4Led by Balderton Capital. 5Acquisition. 6 Including Natwest/RBS. 7 From Berliner Volksbank. 8From Waud Capital. 9 From European Investment Bank. 10 From Francisco Partners. 11Led by Krungsri Finnovate. 12Led by Novacap. 13Including GMO Venture Partners. 14Formed a mobile payments joint venture. 15Led by FIS Holdings. 16Increased its equity stake to 14.6% of voting shares. 17Led by NewMargin Capital. 18Led by New Enterprise Associates. 19From UAE Exchange. 20From Accel, Balderton, Notion, and Passion Capital. 21From BDC Capital. 22Agreed to be sold to Hellman & Friedman, Advent International, and Bain Capital. 23Undisclosed equity investment in the new merged company. 24From Providence Strategic Growth. 25From Criatec2 fund. 26Led by GGV Capital. 27Led by ProFounders. 28Led by QED Investors.
© 2017 The Nilson Report
Investments & Acquisitions September 2017
CRYPTOMATHIC has been granted a global patent (KR20170005400(A)) for a method and system for generating an esignature with the highest level of nonrepudiation. Guillaume Forget is Coinventor and Managing Director, 49 (892) 3513-5930, [email protected], www.cryptomathic.com.
COMPUTOP, a payment service provider, supports clients with a decryption-only service for encrypted payments. The decryption enables banks, retailers, and others that have not connected to the Computop Paygate omnichannel platform to accept point-to-point encryption secured payments. Ralf Gladis is CEO, 49 (951) 980-090, [email protected], www.computop.com.
The chart below lists 41 acquisitions and investments that occurred in 13 countries in September 2017. The largest transaction involved Nets, which agreed to be sold to a consortium of private equity firms. Of the 41 transactions, the monetary value of 18 were not disclosed.
In the first nine months of 2017, The Nilson Report identified 430 acquisitions and investments in 45 countries. See prior issues below, which identify where charts can be found. Prior issues: 1117, 1115, 1113, 1111, 1109, 1107, 1105, 1103
Investments & Acquisitions—September 2017
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focuses exclusively on healthcare payments. Its compound annual
growth rate in payments acquired over the last five years has been 20%.
Retriever Medical benefits from organic growth in the healthcare sector, where businesses of all sizes attempt to receive payment for services at the time they occur. It is also helped as an increasing number of U.S.
employers adopt healthcare plans with higher deductibles and out-of-pocket expenses.
U.S. healthcare spending is expected to grow 5.8% annually from 2017 to 2022, which is stronger growth than
the previous five-year period. Out-of-pocket
healthcare spending is projected to expand 5.1% per year during that time.
Retriever Medical owns card acceptance contracts with healthcare billing companies, hospitals, clinics, and more than 17,000 physicians and dentists who have individual practices. It is
connected to additional healthcare facilities through a joint venture with TSYS Merchant Services that began in August of this year. Retriever Medical uses Vantiv, TSYS, and Worldpay as settlement partners into Visa and Mastercard.
Outside sales teams of merchant service providers (MSPs) find new clients for Retriever Medical, which recently built an inside sales team to approach the more than 50,000 individual medical and dental practices it doesn’t yet serve.
Retriever Medical also plans to grow from acquisition of the healthcare customers of MSPs that
business in 33 countries for bank and merchant customers.
Six Payment Services operates as a pure third-party processor after the sale this month of its credit card issuing business in Austria to Easybank (Bawag). Six gained that business in 2013 when it purchased PayLife in Austria. Last year, merchant processing generated 33% of all transactions handled by Six Payment Services. Recent acquisitions will nearly double the merchant side of its business.
Last month, Six bought the merchant acquiring and processing business of Aduno, its largest competitor in Switzerland. Aduno handled $8.40 billion in purchase volume in 2016. Aduno had operating income of $99.5 million last year.
In July of this year, Six Payment Services expanded its merchant services business in Germany with the acquisition of girocard network operator VÖB-ZVD Processing, a subsidiary of Deutsche Postbank. Last year VÖB-ZVD processed more than one billion domestic girocard debit card transactions. Six did not purchase VÖB-ZVD Netzbetrieb Frankfurt,
which provides management services for 70,000 POS terminals.
Payment Services is a business unit within Six Group, which also provides transaction processing for Swiss Exchange, the third largest stock exchange in Europe. Other Six Group businesses are Securities Services, Financial Information, and Global IT.
Six Group’s business units are fairly balanced in terms of earnings generated before interest expenses and taxes. However, Payment Services is the largest unit when measuring operating income, which was $900.1 million last year, equal to 48.1% of total Six Group revenue. Operating income for Payment Services was up 6.8% for the first half of 2017.
Six Group has paid dividends to its 130 bank owners every year since being formed in 2008 with the merger of Telekurs and SIS Group. Payment Services holds $1.60 billion on its balance sheet and plans to use its cash to make additional acquisitions. Jürg Weber is Division CEO at Six Payment Services in
Zurich, Switzerland, 41 (58) 399-2227, jurg.weber@six-
group.com, www.six-group.com.
Prior issues: 1087, 1081, 1072, 1064, 1062, 1061, 1049
Payment Services holds $1.60 bil. on its balance sheet.
Retriever Medical Payments Acquiring from page 1...
Six Group Payment Services from page 1...
> see p. 6
© 2017 HSN Consultants, Inc. THE NILSON REPORT 5OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
as Klarna, SafetyPay, Sofort, and iDeal, or QR code-based mobile payment systems including Alipay and WeChat Pay.
Gross fraud losses for all card-based payment systems worldwide equaled 7.15¢ per every $100 of total volume last year, up from 6.97¢ per $100 in 2015. Losses to fraud have increased as a percentage of total volume every year since 2010 when they fell to an all-time low of 4.46¢.
American Express, Diners Club/Discover, JCB, Mastercard, Visa, and UnionPay—the global general purpose brands—accounted for $26.044 trillion or 81.7% of total worldwide card volume in 2016. Global brand card fraud reached $20.18 billion last year, up 10.3% from $18.30 billion in 2015. Fraud in 2016 was equal to 7.75¢ of every $100 in global brand volume, up from 7.12¢ in 2015, when global brand volume was $25.718 trillion. Global brand cards incurred 88.5% of total gross fraud losses worldwide for all types of cards in 2016.
There are 75 domestic-market-only general purpose card brands worldwide. They can be debit
or credit or both. Brands include Maestro, Star, Pulse, Nyce, Accel, Interac, RuPay, BC Card, Elo, girocard, Dankort, Hipercard, Banricompras, Redcompa, epal/eftpos, KB Kookmin, Samsung Card, J-Debit, Shetab, Mada, Allatm, SmartPay, Tcard, KNet, eCash, Pago Bancomat, Clave, Infonet, ATH, Cartes Bancaires, Bancontact/Mister Cash, Mir, and others. Domestic-market-only credit and debit card volume reached $3.107 trillion in 2016, up 5.9% over 2015. Fraud reached $650.8 million in 2016, an increase of 7.7% over 2015. Domestic-market general purpose card fraud accounted for 2.9% of gross card fraud worldwide.
Private label cards usable only at select stores, fuel locations, airlines, medical facilities, and elsewhere generated $782.79 billion in total volume in 2016, up 3.3% from $758.05 billion in 2015. Fraud in 2016
do not focus on medical payments. It also plans to grow transaction processing volumes by offering its HIPAA- and PCI-compliant gateway through joint ventures similar to what it has done with TSYS.
Retriever Medical recently formed Rectangle Health,
a division focused on larger physician groups with multiple sites as well as insurance and billing companies that need
more comprehensive payment management services than smaller, single-location practices.
Private equity firm TA Associates holds a 49.9% stake in Retriever Medical.Dominick Colabella is Director at
Retriever Medical/Dental Payments,
Inc. in Valhalla, New York, (914) 298-
2004, [email protected],
www.retrievermed.com.
Global 1 20.18 26,043.77 7.75¢
ATM 2 1.48 1,944.00 7.63¢
Domestic 3 0.65 3,107.14 2.09¢
Private Label 4 0.49 782.79 6.22¢
Fraud Volume Per $100Type ($bil.) ($bil.) in Vol.
Fraud by Type of Card 2016
$22.80bil.
© 2017 The Nilson Report
1 Visa, Mastercard, UnionPay, JCB, American Express, Discover/Diners. 2 From transactions processed by nonglobal networks such as Cirrus and Plus. 3 Maestro, Elo, RuPay, Interac, Cartes Bancaires, and 70 others. 4 Includes store, gasoline, airline, medical, prepaid (U.S.), and ACH (U.S.).
’07
‘08
’09
‘10
’11
‘12
’13
‘14
’15
’16
Fraud Inside vs. Outside the U.S.Cents per $100 in Total Volume
3.22
3.59
3.79
3.91
3.65
3.69
4.86*
5.55*
5.69*11.81*
11.76*
10.71*
11.42
9.99
9.39
7.93
7.95
7.07
6.40
3.59
e ects e anded global co erage. © 17 The ilson e ort
Card Fraud Losses Reach $22.80 Billion from page 1...
Retriever Medical Payments Acquiring from page 5...
...plans to grow by offering its gateway through joint ventures.
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was $486.8 million, up 4.4% from 2015.
ATM transactions handled outside of the global general purpose card networks generated $1.944 trillion in volume in 2016, up 2.4% from 2015. They incurred $1.48 billion in fraud losses, also up 2.4%.
The U.S. generated 23.9% of total global purchase and cash volume in 2016 but accounted for $9.00 billion or 39.5% of the worldwide gross card fraud losses. U.S. fraud was 11.81¢ per $100 last year, up slightly from 11.76¢ the prior year. Fraud in all other countries combined amounted to $13.80 billion, equal to 5.69¢ per $100 in volume, up from 5.55¢ the prior year. Brazil, Canada, Mexico, and Russia continued to have greater fraud problems than the U.S. in terms of basis points of total volume.
Card issuers worldwide experienced $16.13 billion or 70.7% of gross fraud losses worldwide. The remaining $6.67 billion in fraud losses, which amounted to 29.3% of the total, were incurred by merchants, their acquirers, and ATM acquirers.
Card issuer losses occur from counterfeit credit and debit cards used at the point of sale and at ATMs, account takeover, lost/stolen cards, fraudulently opened accounts, including synthetic fraud, where accounts are opened using a combination of bogus and valid information, and a few smaller categories. Friendly fraud, which involves valid cardholders disputing valid charges with the aim of keeping goods but not paying
for them, occurs in every country. Friendly fraud is difficult to quantify and almost impossible to
mitigate. Issuers dump losses into several fraud categories.
Losses from counterfeit cards were down in the U.S. and worldwide as EMV cards and EMV-enabled POS terminals and ATMs continued to provide an effective defense against counterfeit cards. In the U.S.,
issuer losses from counterfeit cards were almost 60% below 2014 levels.
However, U.S. acquirers continued to have trouble with counterfeit cards carrying account numbers from other countries, particularly Canada. Those U.S. merchants that had not yet converted POS terminals to EMV were targets of criminals.
Primary account numbers, expiration dates, and PINs stolen by hackers from merchants, processors, and other places including ATMs fueled fraud losses, as has been true over the last few years. The U.S. is notorious for data breaches. However, breaches occur in every country where large merchants or their processors store card data or criminals remotely hack individual Level 4 (under one million transactions annually) merchants, particularly restaurants.
Skimming devices, which continue to get smaller and harder to spot visually, contributed to an increase in counterfeit losses at ATMs in most world markets except Europe.
The U.S. accounted for 23.9% of volume and 39.5% of fraud.
> see p. 12
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Card Fraud Worldwide Projected ($bil.)
‘10 ‘11 ‘12 ‘13 ‘14 ‘15 ‘16 ‘17 ‘18 ‘19 ‘20 ‘21 ‘22 ‘23 ‘24 ‘25
©2017 The Nilson Report
30%
25%
20%
15%
10%
5%
0%
Growth in Fraud vs.Total Card Volume Worldwide
© 2017 The Nilson Report
‘08 ‘09 ‘10 ‘11 ‘12 ‘13 ‘14
Fraud
Volume*
‘15
e ects currenc uctuations s. . . dollars.
‘07 ‘16
© 2017 HSN Consultants, Inc. THE NILSON REPORT 7OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
Linkable Networks does not sign deals with card issuers. It works with loyalty companies including Lolo and FanBank that provide rewards or cash back on purchases at select merchants as part of their customer loyalty programs. Linkable’s technology
works at the individual product or Sku level for merchandise purchased. Transactions are tracked through API integrations
Linkable maintains with Visa and American Express. Linkable can track the success of offers for consumer packaged goods and other products in any type of media—TV, print, video, online, mobile, social network, and in-store.
Collinson delivers merchant-funded online offers to more than 30 clients around the world and card-linked offers in-store to British Airways, Avios Group, and Virgin Atlantic in the U.K. Assets from Linkable give Collinson the capability to significantly expand the media it can offer its customers.
Visa, Mastercard, Diners Club, and American Express work with Collinson to add Priority Pass airport lounge privileges (1,079 lounges in 120 countries) as an enhancement to premium card accounts. Priority Pass is
one of four airport lounge programs owned and operated by Collinson. The others are Lounge Club, Lounge Key, and Airport Lounge Development (ALD). Collinson invests in and operates its own airport lounges through ALD.
Collinson’s latest cardholder enhancement for travelers stuck in airports owing to flight delays includes instant lounge access.
Collinson Group’s loyalty businesses operate as Welcome Real Time, ICLP, and Latitude. The company is reviewing its multibrand structure as it looks for stronger opportunities for card-linked offers across its lines of business. Collinson’s business-to-business sales involve 20 million customers of its corporate clients. The company also sells products and services directly to consumers. Mark Jackson is Head of Financial
Services at Collinson Group in
London, U.K., 44 (778) 831-5824,
www.collinsongroup.com.
On loans of at least $35,000, a percentage of the merchant’s monthly American Express card receivables can be used to repay the loan before the remainder is settled into its bank account. Top uses of Merchant Financing loans are large investments and debt consolidation.
Working Capital Terms from American Express was launched in October 2016. It is a short-term (30, 60, or 90 days) vendor-invoice financing product available to all small business owners who are American Express Open cardholders. Open is a business unit American Express created more than
25 years ago to designate products and services made available in the U.S. to small businesses.
American Express Business Loans is the newest loan product for small businesses. It offers anyone who has an American Express Open card a loan from
$3,500 to $50,000, with repayment over one, two, or three years. The annual percentage rate borrowers pay varies from 6.98% to
19.97%. Beta tests show that debt consolidation will be a popular use case.
After completing an application online, approval for American Express Business Loans is given in
Amex does not use credit bureaus to assist in underwriting.
Company BuyerAmount
(mil.) Country
RetailMeNot Harland Clarke $629.5 U.S.
Income Access Paysafe $30.0 Italy
Cartera Commerce Ebates * U.S.
Chatter Commerce Rakuten Viber * U.S.
Edenred Innervation * So. Africa
Edo Interactive Augeo * U.S.
Exclusive Connection$ Excentus * U.S.
Expert Pers. Shopper IBM * U.S.
Groupon Malaysia KFit * Malaysia
Linkable Networks Collinson * U.S.
Paribus Capital One * U.S.
ProLogic Retail AppCard * U.S.
Zen Shopping Shop.co * U.S.
*Terms not disclosed. © 2017 The Nilson Report
Acquisitions in LoyaltySept. 2016 – Sept. 2017
Collinson Expands Card-Linked Offers from page 1
American Express Loans for Small Businesses from page 1
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to consumer debit card accounts. First Data believes it can be the lowest cost provider in the new
business of making payments directly to debit card accounts. It will use links to Visa, Mastercard, Star, Nyce, Accel, and Pulse to complete payments.
Visa and Mastercard are two-message networks that can provide guaranteed funds in 30 minutes or less. Star (which is owned by First Data), Nyce, Accel, and Pulse are single-message networks that operate in real time.
First Data can also deliver funds in real time to Green Dot and Money Network prepaid cards. First Data owns Money Network.
An enterprise sales team will offer the direct-to-debit card service to property, casualty, life, and auto insurance companies as well as to technology companies that pay freelance workers. Special sales teams are approaching medical insurance companies.
Direct-to-debit card payments save senders the expense and time associated with preparing and mailing paper checks as well as with payments sent through an
automated clearing house. Those payments are handled in batch format, which always triggers a number of customer service calls that add to their cost.
In time, First Data will offer the direct-to-debit card service outside the U.S. The technology links already exist, including to UnionPay in China and RuPay in India. Those links come from the Acculynk acquisition First Data made earlier this year.
First Data is working to solve compliance issues before launching services, which could include deducting funds from a U.S. debit card and instantly
funding a debit card in China or India.Ashish Bahl
is Executive
VP, Global Debit Solutions at First
Data in Atlanta, Georgia, (678) 778-
5200, [email protected],
www.firstdata.com.
less than a minute. American Express does not use any information from a credit bureau to assist in underwriting.
Amex will market Business Loans to cardholders when they make their card account payments online, through email communication, and via direct mail. Monthly loan repayments can be automatically deducted from a bank account or paid online.
American Express sees considerable opportunity in loan products for small businesses and says more will be brought to market. It believes its closed-loop network provides an advantage in speed of approval as well as in risk management over traditional banks
and online lenders. American Express is testing extended term loan products for small businesses in markets outside the U.S. Gina Taylor Cotter is Senior VP & General Manager,
Global Commercial Financing at American Express in Los
Angeles, California, (212) 640-2000, gina.g.taylor@aexp.
com, www.americanexpress.com.
740.4 million credit, debit, and prepaid consumer and commercial cards. Brands included American Express, Diners Club, Discover, Maestro, Mastercard, and Visa as well as 5 that were domestic only. Issuers from 11 countries were represented among the top 50. Venezuela led with 10 issuers. Argentina had 9 and
Brazil had 8 banks on the list, Mexico had 6 banks, and Chile had 5.
When measuring only Mastercard and Visa cards, the top issuers collectively accounted for 77% of the cards issued in Latin America and the Caribbean.
...believes it can be the lowest cost provider in the new business.
First Data Disbursements to Debit Cards from page 1...
> see p. 12
Top Card Issuers in Latin America from page 1...
© 2017 HSN Consultants, Inc. THE NILSON REPORT 9OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
1Includes HSBC. © 2017 The Nilson Report
Rank Issuer, CountryPurch. Vol.
(mil. $U.S.)Cards(000)
Purch. Vol per Card ($U.S.)
1 Itau Unibanco Brazil 71,313.2 39,775 1,793
2 Banco Bradesco Brazil 1 46,933.9 74,402 631
3 Banco do Brasil Brazil 39,911.5 17,963 2,222
4 Banesco Venezuela 30,344.6 2,475 12,260
5 Banco Santander Brazil 25,843.4 10,474 2,467
6 BBVA Provincial Venezuela 17,792.1 3,445 5,165
7 Citibanamex Mexico 13,600.7 7,520 1,809
8 BBVA Bancomer Mexico 12,251.8 5,624 2,179
9 Banco Occidental Venezuela 11,809.6 1,176 10,044
10 Caixa Economica Federal Brazil 11,251.0 6,584 1,709
11 Banco Macro Argentina 10,145.3 2,162 4,692
12 Banco Santander Rio Argentina 7,490.2 8,138 920
13 Banco Santander Chile 6,990.3 1,804 3,876
14 Banco Mercantil Venezuela 6,491.3 1,912 3,395
15 Banco Galicia Argentina 6,064.1 3,905 1,553
16 BBVA Frances Argentina 5,684.2 3,224 1,763
17 Banco Santander Mexico 5,627.8 3,354 1,678
18 Banco de Venezuela Venezuela 5,559.8 1,973 2,819
19 Banco Falabella Chile 5,544.1 2,647 2,095
20 Banco de Chile Chile 4,614.3 1,773 2,602
21 HSBC Mexico 4,392.0 1,867 2,352
22 Banorte Mexico 4,154.3 2,070 2,007
23 Banco CSF Brazil 3,730.2 15,152 246
24 Banco Provincia Argentina 3,624.2 2,046 1,771
25 Bancolombia Colombia 3,507.7 2,124 1,651
26 Diners Club Ecuador 3,371.4 740 4,557
27 Banco Exterior Venezuela 2,881.4 399 7,222
28 Bancaribe Venezuela 2,742.7 392 6,997
29 BAC Credomatic Costa Rica 2,636.8 625 4,216
30 HSBC Argentina 2,577.4 1,465 1,759
31 Banco Nac’l de Credito Venezuela 2,491.0 176 14,114
32 Banco Davivienda Colombia 2,424.8 1,328 1,825
33 Citibank Brazil 2,375.1 1,034 2,297
34 Banco Popular Puerto Rico 2,278.6 642 3,552
35 ICBC Argentina 2,266.9 1,196 1,895
36 Banco de Credito BCP Peru 2,254.7 998 2,260
37 Banco de la Nacion Argentina 2,227.0 1,950 1,142
38 Banco de Credito e Inver. Chile 1,986.6 937 2,119
39 Inbursa Mexico 1,867.0 2,130 877
40 Banco Hipotecario Argentina 1,831.8 1,548 1,183
41 Banco Popular Dominican Republic 1,576.0 446 3,534
42 Banco General Panama 1,564.3 152 10,275
43 Banco Colpatria Colombia 1,527.2 1,281 1,192
44 CAT Admin. de Tarjetas Chile 1,439.4 2,342 615
45 Cetelem Brazil 1,426.1 3,225 442
46 Interbank Peru 1,415.9 956 1,482
47 Banco Ripley Chile 1,340.2 3,373 397
48 Banco Patagonia Argentina 1,268.5 941 1,348
49 Banco Falabella Colombia 1,238.9 1,173 1,057
50 Banco de Bogota Colombia 1,232.4 1,070 1,152
Credit Card Issuers in Latin America
Visa, Mastercard, American Express, Diners Club, JCB, and general purpose domestic consumer and commercial credit cards. 1Includes HSBC. 2Also St. Lucia, Antigua, St. Vincent, Nevis, and Grenada. © 2017 The Nilson Report
Debit Card Issuers in Latin America
Rank Issuer, CountryPurchase Volume
(mil. $U.S.)Cards(000)
Purch. Volper Card ($U.S.)
1 Banesco Venezuela 253,833.0 6,067 41,838
2 BBVA Provincial Venezuela 177,781.2 3,634 48,927
3 Caixa Economica Federal Brazil 25,979.0 97,768 266
4 Banco Bradesco Brazil 1 25,607.0 86,265 297
5 Itau Unibanco Brazil 22,365.3 37,489 597
6 Banco Mercantil Venezuela 21,212.5 3,877 5,472
7 Banco do Brasil Brazil 20,640.6 52,109 396
8 Banco de Venezuela Venezuela 16,461.0 5,069 3,247
9 Banco Santander Brazil 13,847.8 42,486 326
10 BBVA Bancomer Mexico 12,244.6 19,496 628
11 Bancaribe Venezuela 12,074.1 714 16,909
12 Citibanamex Mexico 8,971.2 24,170 371
13 Banco Occidental Venezuela 7,765.6 549 14,142
14 Banorte Mexico 7,407.3 13,601 545
15 BancoEstado Chile 6,554.0 10,505 624
16 Banco Exterior Venezuela 6,238.3 688 9,071
17 Bancolombia Colombia 5,769.4 8,428 685
18 Alelo Brazil 5,491.0 5,308 1,034
19 Banco Santander Mexico 5,295.5 10,573 501
20 Banco Nac’l de Credito Venezuela 3,669.3 848 4,325
21 Banco Santander Chile 3,563.1 3,311 1,076
22 HSBC Mexico 3,438.8 7,707 446
23 Banco de la Nacion Argentina 3,215.9 5,757 559
24 Banco Bicentenario Venezuela 2,885.1 464 6,216
25 Banco de Credito e Inversiones Chile 2,797.9 1,625 1,722
26 Banco Santander Rio Argentina 2,761.0 4,900 563
27 BISA Puerto Rico 2,637.7 1,031 2,559
28 Banco Provincia Argentina 2,503.6 3,821 655
29 Banco de Chile Chile 2,157.3 2,164 997
30 Banco de Credito BCP Peru 2,073.2 5,685 365
31 Banco Nacional Costa Rica 1,981.7 2,113 938
32 Banco Galicia Argentina 1,951.7 2,552 765
33 BFC Banco Fondo Comun Venezuela 1,869.3 1,180 1,583
34 Scotiabank Mexico 1,851.2 3,031 611
35 Banco de Costa Rica Costa Rica 1,701.6 1,566 1,087
36 Banco Davivienda Colombia 1,595.3 3,644 438
37 BBVA Frances Argentina 1,546.2 2,201 702
38 Banco Popular Puerto Rico 1,471.2 720 2,043
39 FirstBank Puerto Rico 1,458.5 408 3,574
40 Banco Caroni Venezuela 1,293.5 293 4,411
41 BBVA Continental Peru 1,110.5 3,856 288
42 Banco Falabella Chile 1,095.3 737 1,485
43 BBVA Colombia 1,080.3 2,971 364
44 RBC Royal Bank Trinidad & Tobago 2 1,014.6 565 1,796
45 Banco Caja Social Colombia 1,006.2 2,028 496
46 Banco de Bogota Colombia 895.8 2,724 329
47 Inbursa Mexico 884.9 1,479 598
48 Cartao BRB Brazil 859.5 1,530 562
49 CorpBanca Chile 857.8 567 1,512
50 Banco Patagonia Argentina 830.3 1,884 441
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General purpose: Visa, Mastercard, Maestro, American Express, JCB, Diners Club, UnionPay, and domestic general purpose consumer and commercial credit, debit, and prepaid cards. Visa/Mastercard results exclude Maestro and cards that carry only the Plus or Cirrus brands. 1Includes HSBC. © 2017 The Nilson Report
General Purpose Cards Visa & Mastercard
Issuer, Country‘16
RankPurch. Volume
(mil. $U.S.)‘16
RankTotal Volume(mil. $U.S.)
‘16Rank
Cards(000)
‘16Rank
Purch. Volume(mil. $U.S.)
‘16Rank
Total Volume(mil. $U.S.)
‘16Rank
Cards(000)
Banesco Venezuela 1 284,177.6 1 301,507.1 15 8,542 3 50,613.5 7 51,679.5 21 4,028
BBVA Provincial Venezuela 2 195,573.2 2 248,572.8 17 7,078 8 17,792.1 13 18,501.9 25 3,445
Itau Unibanco Brazil 3 93,678.5 3 229,159.2 3 77,263 1 64,665.1 3 83,914.3 3 42,530
Banco Bradesco Brazil1 4 72,540.9 4 149,541.1 1 160,667 4 50,004.5 1 117,468.4 1 120,829
Banco do Brasil Brazil 5 60,552.2 6 78,297.2 4 70,072 2 54,324.2 5 58,681.4 2 61,411
Banco Santander Brazil 6 39,691.2 8 66,716.4 5 52,959 5 31,676.3 8 42,020.3 4 30,086
Caixa Economica Federal Brazil 7 37,230.0 13 37,230.6 2 104,352 9 13,857.9 16 13,858.5 7 15,732
Banco Mercantil Venezuela 8 27,703.8 10 43,920.1 23 5,789 21 6,491.3 31 6,867.8 46 1,912
BBVA Bancomer Mexico 9 24,496.5 7 74,755.7 7 25,120 6 24,444.6 4 74,703.7 6 25,120
Citibanamex Mexico 10 22,571.9 5 93,222.3 6 31,690 7 22,422.4 2 91,529.9 5 27,472
Banco de Venezuela Venezuela 11 22,020.8 14 35,950.9 18 7,042 24 5,559.8 34 6,021.8 42 1,973
Banco Occidental Venezuela 12 19,575.1 15 26,734.0 55 1,725 15 7,921.1 24 9,078.6 63 1,098
Bancaribe Venezuela 13 14,816.8 20 18,674.7 72 1,106 34 2,742.7 53 2,801.2 91 392
Banorte Mexico 14 11,561.7 9 52,537.4 8 15,671 10 11,561.7 6 52,537.4 8 15,671
Banco Santander Mexico 15 10,923.3 12 38,446.8 10 13,928 11 10,848.2 9 38,346.7 10 13,859
Banco Santander Chile 16 10,553.3 22 15,117.3 26 5,115 19 6,664.0 30 7,254.8 50 1,565
Banco Santander Rio Argentina 17 10,251.2 21 17,417.8 11 13,038 14 8,869.3 14 16,020.9 11 10,100
Banco Macro Argentina 18 10,196.4 29 10,740.5 27 5,061 12 10,157.9 20 10,701.8 19 4,990
Bancolombia Colombia 19 9,277.1 11 39,894.3 13 10,552 30 3,149.2 35 5,600.8 40 2,158
Banco Exterior Venezuela 20 9,119.6 23 14,732.2 73 1,087 13 9,119.6 15 14,732.2 64 1,087
Banco Galicia Argentina 21 8,015.8 24 13,960.0 20 6,457 18 7,120.5 17 13,060.0 14 5,887
HSBC Mexico 22 7,830.8 17 24,291.2 14 9,574 16 7,830.8 10 24,291.2 12 9,574
BBVA Frances Argentina 23 7,230.3 28 11,778.8 24 5,425 17 7,230.3 18 11,778.8 17 5,425
BancoEstado Chile 24 7,225.0 16 26,385.0 12 11,590 88 671.0 89 921.6 65 1,085
Banco de Chile Chile 25 6,771.6 26 12,285.3 30 3,937 22 6,278.9 26 8,638.5 36 2,344
Banco Falabella Chile 26 6,639.4 38 8,183.7 35 3,384 20 6,639.4 28 8,183.7 26 3,384
Banco Nac’l de Credito Venezuela 27 6,160.3 35 8,879.2 76 1,025 38 2,491.0 54 2,606.8 126 176
Banco Provincia Argentina 28 6,127.8 19 18,906.6 21 5,867 23 6,127.8 12 18,906.6 15 5,867
Alelo Brazil 29 5,491.0 42 5,491.0 25 5,308 25 5,491.0 36 5,491.0 18 5,308
Banco de la Nacion Argentina 30 5,442.8 36 8,339.5 16 7,708 39 2,227.0 59 2,257.7 45 1,950
Banco de Credito e Inversiones Chile 31 4,784.6 30 9,746.6 43 2,562 26 4,784.6 21 9,746.6 35 2,562
Banco de Credito BCP Peru 32 4,327.9 18 21,362.7 19 6,683 27 4,191.3 11 21,063.8 13 6,629
Banco Davivienda Colombia 33 4,020.1 25 13,517.9 28 4,972 46 2,010.7 51 3,077.4 60 1,187
Banco Popular Puerto Rico 34 3,749.8 52 4,087.9 64 1,362 29 3,501.6 44 3,809.0 55 1,284
Banco CSF Brazil 35 3,730.2 56 3,730.2 9 15,152 28 3,730.2 46 3,730.2 9 15,152
Banco Bicentenario Venezuela 36 3,557.6 47 4,890.0 102 526 47 1,907.1 62 1,955.8 148 85
Diners Club Ecuador 37 3,371.4 58 3,539.8 91 740 — — — — — —
BAC Credomatic Costa Rica 38 3,356.2 43 5,222.4 57 1,657 33 2,841.3 40 4,665.9 54 1,382
ICBC Argentina 39 2,906.4 48 4,526.6 49 2,101 31 2,906.4 41 4,526.6 41 2,101
BISA Puerto Rico 40 2,845.1 46 4,960.4 70 1,154 32 2,845.1 38 4,960.4 61 1,154
Citibank Brazil 41 2,770.5 62 3,324.4 60 1,575 50 1,758.6 57 2,304.9 58 1,268
Inbursa Mexico 42 2,751.8 45 5,069.3 33 3,609 37 2,632.0 39 4,949.6 28 3,239
HSBC Argentina 43 2,726.9 59 3,423.2 42 2,706 36 2,635.0 48 3,331.3 34 2,633
Banco Nacional Costa Rica 44 2,682.3 37 8,267.7 47 2,257 35 2,682.3 27 8,267.7 39 2,257
Banco Popular Dominican Republic 45 2,135.2 44 5,156.9 66 1,281 40 2,135.2 37 5,156.9 57 1,281
Banco de Bogota Colombia 46 2,128.3 32 9,261.0 31 3,794 41 2,128.3 22 9,261.0 22 3,794
BFC Banco Fondo Comun Venezuela 47 2,121.3 50 4,198.5 65 1,316 124 252.0 137 263.2 136 135
Banco de Costa Rica Costa Rica 48 2,117.2 70 2,282.7 56 1,675 42 2,117.2 58 2,282.7 48 1,675
Banco Patagonia Argentina 49 2,098.8 40 6,245.7 41 2,825 43 2,095.8 32 6,242.7 33 2,821
BBVA Continental Peru 50 2,087.8 39 7,539.7 29 4,298 44 2,087.8 29 7,539.7 20 4,298
Top General Purpose/Visa/Mastercard Card Issuers in Latin America 2016
© 2017 HSN Consultants, Inc. THE NILSON REPORT 11OCTOBER 2017 / ISSUE 1118 / THE NILSON REPORT
Shimming, while not a big problem, was a new criminal activity in 2016. Shimming devices placed in ATMs enable criminals to capture data from EMV card transactions.
Issuer losses to account takeover was a growing trend. There was also marginal growth in fraudulent applications. Because the theft of personally identifiable information is largely a U.S. problem, no other region in the world has the same degree of problems with fraudulent accounts and account takeover fraud.
Merchant losses to fraud have been increasing in recent years as a percentage of total fraud losses, and that continued in 2016. EMV, which helps issuers cut fraud losses from in-store transactions, can’t protect mail order or telephone order (MOTO) or ecommerce merchants. There was an increase in MOTO fraud in 2016 relative to ecommerce fraud. Ecommerce fraud increased in Latin America, led by Brazil, which incurred a lot of fraud from cross-border transactions.
Large U.S. merchants benefit from layers of fraud fighting protection, and this helped the U.S. region keep card-not-present (CNP) fraud relatively flat in 2016 over 2015 when measured in basis points. However, CNP fraud overtook counterfeit as the largest category of all fraud losses in the U.S. More than half of all fraud losses among general purpose card brands in the U.S. were tied to CNP fraud.
By 2021, card fraud worldwide is expected to total $32.96 billion even though fraud as a percent of every $100 is predicted to decline to 7.02¢. By 2025, card fraud losses worldwide are projected to reach $43.78 billion, including $14.41 billion in the U.S.
Better tactics and technology to combat criminals attempting card-not-present transactions will define
fraud fighting for merchants in coming years. Keeping CNP losses in check will involve merchants and issuers worldwide aggressively supporting 3D Secure 2.0 to increase cardholder authentication. Issuers will help protect themselves and merchants by deploying behavioral and physical biometrics. Behavioral biometrics capture data input typing styles unique to each cardholder. These were introduced in 2016 and are being widely tested this year. Large issuers are expected to deploy them in 2018, particularly in the U.S. where issuers need stronger protection against the use of stolen personally identifiable information to fraudulently open new credit and debit card accounts.
The 50 largest credit card issuers in LAC generated purchase volume of $414.91 billion from 254.1 million cards. Average spending per credit card was $1,633 annually.
The 50 largest debit card issuers in LAC generated purchase volume of $713.60 billion from 502.2 million cards. Average spending per debit card was $1,421 annually.
Historically, some countries in Latin America have had significant swings in rates of inflation and currency devaluations versus the
U.S. dollar, which affect conversion from reported local currencies to U.S. dollars. Currently, Venezuela is in that situation. Foreign exchange rates have been slow
to keep up with inflation, which gives an inaccurate picture of the devaluation of the local currency to the U.S. dollar. In addition, the central government in Venezuela manipulates currency conversion rates. Consequently, this ranking, which is based on volume, not card transactions, inflates the position of Venezuelan banks versus issuers in other countries.
By 2021, card fraud worldwide is expected to total $32.96 bil.
The top 50 debit issuers had $713.60 bil. in purchase volume.
Card Fraud Losses Reach $22.80 Billion from page 7
Top Card Issuers in Latin America from page 9
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© 2017 HSN Consultants, Inc. THE NILSON REPORT All Rights Reserved. Reproducing or allowing reproduction or dissemination of any portion of this newsletter in any manner for any purpose is strictly prohibited and may violate the intellectual property rights of HSN Consultants, Inc. dba The Nilson Report.
David Robertson, PublisherOctober 16, 2017
