Andrei Cazacu’s Post

SCA's Impact on Reducing Payment Fraud Today, the European Central Bank (ECB) and the European Banking Authority (EBA) published a joint Report on Payment Fraud revealing some important insights: 💰 The total value of payment fraud across the EEA was €4.3 billion in 2022 and €2.0 billion in the first half of 2023. Most fraud involved credit transfers and card payments. 🔒 Strong Customer Authentication (SCA) requirements have been highly effective. Fraud rates for SCA-authenticated transactions are significantly lower, especially for card payments. In fact, card fraud rates are ten times higher for transactions outside the EEA where SCA isn’t mandatory. 🌍 Most card fraud (71% of total value in the first half of 2023), along with a large share of credit transfer and direct debit fraud (43% and 47% respectively) involved cross-border transactions. SCA is proving that strong regulations can make a big difference in protecting our financial transactions. A big thank you to the ECB and EBA for their continued efforts and insights in making our payment systems safer and more secure. The full report can be found here

Important Insights from the Latest EBA & ECB Payment Data Report. The joint report from the EBA and ECB highlights key findings on payment trends and fraud for H1 2022, H2 2022, and H1 2023. Here are the key takeaways: 🔍 Scope & Coverage: - Analysed data on credit transfers, direct debits, card payments, cash withdrawals, and e-money transactions across all EU/EEA countries. - Focused on total payment transactions and fraudulent transactions in value and volume. 💰 Fraud Analysis: - Total payment fraud in 2022: EUR 4.3 billion; H1 2023: EUR 2.0 billion. - Major fraud types: Credit transfers and card payments. - H1 2023: EUR 1.131 billion in fraudulent credit transfers; EUR 633 million in card fraud. 📊 Fraud Rates: - The highest fraud rates were observed in card payments (0.031% value, 0.015% volume) and e-money transactions (0.022% value, 0.012% volume). - Lower fraud rates in direct debits, cash withdrawals, and other instruments. 💳 Card Fraud Insights: - Predominantly remote transactions. - Main causes: Lost/stolen cards and card details theft. - SCA has a significant impact, especially within the EEA. 🌍 Geographical Insights: - Most transactions were domestic, but cross-border fraud was significant, especially outside the EEA. 🔐 Security Measures: - SCA shows a positive impact, with lower fraud rates for authenticated transactions. - Higher fraud rates observed for transactions using SCA exemptions. 📈 Liability & Loss Distribution: - Varies by payment instrument and country. - PSUs bore significant losses, especially in credit transfers and card payments. 📉 Outlook: - Stable fraud trends due to SCA and other industry measures. - Continuous monitoring by EBA and ECB to enhance payment security. #Payments #Fraud #FraudPrevention #Fintech #EBA #ECB #PSD2 #SCA #PaymentSecurity https://lnkd.in/dnrnDX2t

The European Banking Authority (EBA) and the European Central Bank (ECB) published a joint Report on payment fraud data. The report assesses payment fraud reported by the industry across the EEA, which amounted to €4.3bn in 2022 and €2.0bn in the first half of 2023. The Report confirms the beneficial impact of #SCA on fraud levels. The Report examines the total number of payment transactions and the subset of fraudulent transactions in terms of value and volume. In addition to the aggregated values, the Report also presents data based on volumes and also sorted by type of payment instruments, i.e. credit transfers, direct debits, card payments, cash withdrawals, and e-money transactions. The total value of fraudulent credit transfers, direct debits, card payments, cash withdrawals and e-money transactions in the EEA amounted to €4.3 billion in 2022 and €2.0 billion in the first half of 2023. #SCA-authenticated transactions featured lower fraud rates than non-SCA transactions, especially for card payments, both in terms of values and volumes. Furthermore, fraud shares for card payments, both in terms of values and volumes, were 10 times higher when the counterpart is located outside the EEA, where the application of SCA is not legally required and may therefore not have been requested. Hence, the report confirms the beneficial impact of the #SCA requirements that were introduced by the PSD2 and the supporting technical standards that the EBA had issued in 2018 in close cooperation with the ECB. https://lnkd.in/d_5WccwZ

🔒 **Protection Against Payment Fraud: New Measures Proposed by EBA** The European Banking Authority (EBA) has recently assessed data on payment fraud, identifying new types and patterns of fraud, and proposing measures to mitigate them. This evaluation aims to strengthen the future legislative framework, particularly within the scope of the third Payment Services Directive (PSD3) and the Payment Services Regulation (PSR), to protect consumers from potential losses due to fraud. Regulatory measures such as Strong Customer Authentication (SCA) mandated by the revised Payment Services Directive (PSD2) and EBA's technical standards have significantly reduced fraud related to customer credential theft. However, fraudsters have adapted their techniques, employing more sophisticated frauds, such as those based on social engineering. To counter these new forms of fraud, EBA proposes new security measures in addition to the European Commission's proposals for PSD3 and PSR, as well as provisions recently enacted through the Instant Payment Regulation (IPR). For more information, refer to the official source: [European Banking Authority](https://lnkd.in/eHpe3PkE) #PaymentFraud #FinancialSecurity #ConsumerProtection #EBA #IPR #PSD3 #PSR #SCA

EBA OPINION ON INSTANT PAYMENTS FRAUD Here is a detailed opinion by the European Banking Authority. A key point is “17. The first is instant credit transfers, also referred to as instant payments, for which the data reported by 18 NCAs for H1 2022, show that the fraud rates in value, besides presenting significant divergences between Member States (MS), are about 10 times higher on average than conventional Credit Transfers (CT).” Instant Payments have ten times the fraud of regular payments.

📢 **Joint Report on Payment Fraud: ECB and EBA** 📅 **Date:** 01/08/2024 💶 **Fraud in 2022:** €4.3 billion 💶 **Fraud in H1 2023:** €2.0 billion 🔒 **Strong Customer Authentication (SCA) effective against fraud!** The joint report by the European Central Bank (ECB) and the European Banking Authority (EBA) highlights the fraud data reported by payment service providers in the European Economic Area (EEA). 🔹 **Most Affected Payment Instruments:** - **Bank transfers** - **Card payments** (majority in volume) 🔹 **Fraud Rates in H1 2023:** - **Card payments:** 0.031% of total value, 0.015% in volume - **Electronic money transactions:** 0.022% in value, 0.012% in volume - **Bank transfers:** 0.001% in value, 0.003% in volume 🔹 **Impact of SCA:** - Transactions authenticated by SCA show lower fraud rates, especially for card payments. - Fraud rates are ten times higher for transactions outside the EEA. 🔹 **Distribution of Fraud Losses (H1 2023):** - **Card payments:** 71% of losses involve cross-border transactions. - **Bank transfers:** 43% of losses. - **Direct debits:** 47% of losses. 🔹 **SCA Exemptions and Impact on Fraud:** Certain exemptions (e.g., low value, trusted beneficiaries) show higher fraud rates than others (e.g., secure corporate processes). 🔹 **Distribution of Responsibility for Losses:** - **Users of payment services:** 45% of losses for card payments, 51% for cash withdrawals, over 80% for bank transfers. The report emphasizes the importance of remaining vigilant against fraud and the crucial role of strong authentication. The widespread adoption of RTS standards for SCA has had a positive effect on reducing fraudulent payments. 📍 **Full Source:** [ECB Press Release](https://lnkd.in/eXzf8XfM) 📊 **#Fraud #PaymentSecurity #ECB #EBA #SCA #PSD2 #CyberSecurity**

The European Banking Authority (EBA) has unveiled a comprehensive opinion on emerging fraud trends and new #fraud types. 🕵♂️ As to the emerging fraud types, the EBA has observed that fraudsters have started to adapt their techniques to the changing technological and regulatory context. As #SCA has been successful in preventing fraud types based on the stealing of customers’ credentials, new, more complex fraud types emerged or became more widespread in recent years. These new fraud techniques can be separated into three categories: manipulation of the payer, social engineering and technical scam, and enrollment process compromise. To try and mitigate the evolving fraud landscape, the EBA has proposed additional security measures to ensure a robust and future-proof framework for preventing payment fraud in the EU, under the discussion of the #PSD3 / #PSR proposals.

As snotty as I can be in my commentary sometimes, I try to keep an open mind when reading any new fraud report. If I'm going to say something crummy, I at least want the report to have a fair shake. Reading this Opinion on payment fraud (https://lnkd.in/gttFSua3) from the European Banking Authority (EBA) was a tough one for me though. Not because it's bad, but because it was worded in a way that just riled me. "Oh really? YOU figured out that instant payments present a higher risk of fraud? YOU figured out the same thing about cross-border payments? Thank goodness for YOU." I did calm down eventually, and the report is fine. This was a me problem, not a report problem. The report basically summarizes what has been covered over the last couple of years around payment fraud. I don't think anything in the report will blow anyone's mind, and some things just don't make sense (transaction monitoring or authentication don't help when social engineering has occurred and the true consumer chooses to make a bad payment), but it's still helpful to have a concise summary of all the findings and opinions. EBA publishes Opinion on new types of payment fraud and possible mitigations (https://lnkd.in/gWwvdBve) #fraud #fraudreport #fraudmanagement #fraudprevention #payments #paymentfraud #banking #banks #instantpayments #appfraud

Rippleshot exists to help our partners, like CPI Card Group, help their customers become strategically resilient to fraud by proactively stopping credit and debit card fraud. This Finnovate article dives into how our risk score-based reissuance approach helps financial institutions minimize customer impact and reduce fraud losses: https://lnkd.in/geh88zJE #banking #fraudmitigation #fraudprevention #cardfraud #banks #financialinstitutions

ECB and EBA joint report on Payment Fraud    The European Central Bank (ECB) and European Banking Authority (EBA) have released a joint report providing insights into the state of payment fraud in Europe. This report is essential for policymakers, regulators, and financial institutions as they navigate the evolving fraud landscape. Here’s a snapshot of the key takeaways:   🔍 Persistent Fraud Challenges in Europe:  Despite ongoing efforts, payment fraud remains a significant challenge in Europe. The total value of fraudulent transactions reached €2.0 billion in the first half of 2023, following €4.3 billion in 2022, highlighting the need for continued vigilance.   💳Varying Fraud Rates Across Payment Methods:  ▶ Card Fraud accounts for 0.031% of transaction value and 0.015% of transaction volume. ▶ Credit Transfers suffer from much lower fraud rates (0.001% in value and 0.003% in volume). ▶ Direct Debits have a relatively low fraud rate, but a substantial portion of direct debit fraud involves cross-border transactions.   🔒Effectiveness of Strong Customer Authentication (SCA):  SCA has successfully reduced fraud rates within the European Economic Area (EEA). However, countries with higher cross-border transactions, especially outside the EEA, are more vulnerable due to varying SCA requirements.   🤝 Importance of Collaboration:  The report emphasizes the critical role of collaboration among financial institutions in combating payment fraud. By sharing intelligence, best practices, and working together to enhance fraud prevention measures, the industry can better protect consumers and maintain trust in the digital payments ecosystem.   Explore the full report for more detailed insights here: https://lnkd.in/eY_KUFrz   💬 What are your thoughts on these findings? How do you see these trends impacting the future of payment security?   #ECBEBAfraudreport #Europepaymentfraud #SCAresults