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Introduction

This report provides an overview of the global levels and forms of card not present (CNP) fraud now occurring, and outlines the strategies and solutions needed to manage risk in a changing payments environment.

Highlights

  • Levels of CNP fraud globally continue to rise, accounting for close to 80% or more of all card-based fraud in some regions.
  • Payments diversification is making CNP fraud prevention more challenging, with enrollment to new services remaining a particularly delicate risk point.
  • There is no single point solution for CNP fraud, but technologies such as 3-D Secure 2.0, biometrics, tokenization, and the use of AI and machine learning, can help to limit CNP losses to more manageable levels.

Features and Benefits

  • Help form an effective strategy for mitigating your CNP fraud risk by understanding the pros and cons of emerging technologies and why a dynamic approach is the way forward.
  • Understand how global fraud techniques are changing and what this means in terms of liability shifts and losses for issuing banks and merchants alike.
  • Learn about how the latest CNP fraud prevention technologies, such as machine learning and tokenization, and how they are helping to reduce frictions and manage ever-growing levels of risk.

Key questions answered

  • What impact has EMV had on CNP fraud losses? Is the correlation one to one?
  • What implications do new technologies like tokenization and biometrics have on CNP fraud? Are there any single-point solutions?
  • What liability risks is fraud creating for merchants? Is damage from CNP fraud restricted to chargebacks?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations

  • Recommendations for enterprises
  • Recommendations for vendors

Market context

  • Losses to CNP fraud are growing
  • The US EMV migration is putting pressure on CNP fraud detection

Business focus

  • Security is always on the agenda for merchants and banks alike
  • Security remains the top investment priority for issuers
  • Merchants need to balance reducing payment frictions with maintaining security

Technology focus

  • There is no single-point solution to CNP fraud
  • Authentication is core to CNP security
  • Multilayered dynamic technologies will help to lower CNP fraud rates
  • CNP security extends beyond authentication

Appendix

  • Methodology
  • Further reading
  • Author

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