Card payments in Australia have fallen for the first time as the rate of card fraud increases, driven by an uptick in online payments.
New data released by Australian Payments Network (AusPayNet), the industry self-regulator for the Australian payments industry, showed a 2.2 per cent dip in the overall spend on Australian cards to $801.7 billion in 2020 – the first such drop ever to be recorded – as consumers moved online for shopping due to COVID-19.
Accompanying this was a slight 0.6 per cent uptick in the overall value of card fraud to $467.6 million following a 19.5 per cent drop in 2019.
Though most categories of fraud dropped – lost-and-stolen card fraud fell 25 per cent to its lowest value since 2012, and counterfeiting/skimming declined 34 per cent to a new record low – card-not-present (CNP) fraud, which occurs when card details are stolen and used to make purchases without need for the physical card and represents around 85 per cent of card fraud in Australia, increased by 3.8 per cent to $418.9 million as online spending grew thanks to the pandemic.
According to AusPayNet CEO Andy White, the industry has remained on alert for CNP fraud as e-commerce sales grew 44 per cent last year.
“Indications are that many of the spending patterns and trends established during COVID will remain once we emerge from the pandemic – that is likely to be the case with online shopping.
“The good news is that the industry-wide initiative put in place to mitigate CNP fraud two years ago has had a significant impact. Among other things, it encourages more stringent customer authentication by merchants and issuers, which can very quickly reduce fraud,” he said.
2020’s card fraud rate was 5.8 cents for every $100 spent on cards, up from 5.7 cents in 2019.
