Fraud is down, debit and digital are up as stated by Discover Financial Services in their 2018 Debit Issuer Study.
Based on the results from the study it was found that issuers lost an estimated $850 million in point-of-sale debit transactions in 2017, a 5.5% decrease from 2016. Discover states that this decline is likely due to the transition to the chip-enabled debit card which according to the issuer surveyed 91% of cards have converted to chip cards.
However when it comes to card-not-present transactions that according to the study account for 21% of transaction volume they represent for the 4% of net fraud cases siding that the average net loss associated with each of these transactions was $123 per incident. Interestingly when it came for the most significant reason for decline transactions, it was not due to suspected fraud which impacted 0.4% of issuance debit transactions but insufficient funds which affected 1.8% of purchases.
When it came to the digital side of things the survey revealed that 86% of responding issuers supported at least one mobile payment adoption which is up 74% from the previous study. The study also found that cardholder enrollment in mobile programs doubled in the last year however transactions initiated with a mobile wallet represented only 0.6% of in-store debit card purchases in 2017, and that compared to a 0.3% in 2016.
2018 is shaping up to be an exciting year for the debit industry as noted by the Discover Financial Services study. Substantial changes are happening in the fraud and digital space and as consumer trends continue to evolve, mature, and change again issuers are going to need to stay on their toes to keep up with this fast-paced moving industry.