Payment fraud refers to a fraud that takes place when a fraudulent transaction is performed under a payment card. It may occur as a result of an account takeover or by the use of a counterfeit card with the customer’s account number. Third-party payment fraud occurs when a cardholder’s information is used by another person without the cardholders knowledge, and it generally takes advantage of a vulnerability or a security failure. The industry measures fraud incidence and categorizes fraud incidents.
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Data for this episode of Truth In Data provided by Mercator Advisory Group’s report – Prepaid Card Fraud
About this report
While prepaid card fraud is lower than debit card fraud, debit card fraud is shrinking due to chip technology, while prepaid card fraud is rising. Since chip technology is too expensive for prepaid, processors will need to use more analytic techniques.