Card payments fall for the first time in recorded data, as fraud rises on the back of hacks

New data shows card payments have declined for the first time, while fraud continues to grow as scammers gain card data from hacks and identity theft.

Card payments have declined for the first time, dropping 2.2 per cent in 2020 to $801.7bn. Picture: Jake Nowakowski

New data shows card payments have declined for the first time, dropping 2.2 per cent in 2020 to $801.7bn, while fraud continues to grow as scammers gain card data from hacks and identity theft.

The data from Australian Payments Network found major shifts in card fraud, which lifted by 0.6 per cent in the same period.

Card fraud rate stands at 58.3c per $1000 spent well below the 2018 level of 73c per $1000.

2019 was the lowest rate for card fraud in recent years, with an average loss of 56.3c for every $1000 spent. The AusPayNet data shows card skimming and fraud on lost and stolen cards declined dramatically in the last year. Counterfeiting and card skimming declined 34.1 per cent, with $11.1m lost to the fraud.

Fraud on lost and stolen cards also fell by 24.9 per cent to $26.3m lost last year. But card not present fraud increased by 3.8 per cent to $418.9m lost, largely due to online frauds. AusPayNet found the continued decline in transactions made using cheques has seen a precipitous drop off in fraud.

Cheque fraud fell to $4m in 2020 from $4.8m in 2019, however the fraud rate has actually grown as the proportion of fraudulent cheques has remained more stable than the use of the payment method. Cheque fraud accounted for 1c in every $1000 transacted, up from the 0.8c in 2019. Online fraud now accounts for 89.6 per cent of all card frauds, up from 87 per cent in 2019.

Australia ranks among the highest for card not present frauds among peer countries.

AusPayNet pointed to a series of large scale hacks, in which card details were stolen, as a key driver of card not present frauds.

Chip technology is pointed to as a key factor in reducing card fraud, while contactless payments through mobile phones and other devices also block many attempts at skimming.

Originally published as Card payments fall for the first time in recorded data, as fraud rises on the back of hacks