Interac® debit card fraud skimming losses decline to record low
Fraud exploitation within Canada drops 62 per cent year-over-year to $7.3 million
Toronto, Ontario (March 26, 2014) – Interac Association reported today that Interac debit card fraud losses as a result of skimming are at a record low – decreasing to $29.5 million in 2013 from a high of $142 million in 2009. Only 25 per cent of losses in 2013, or $7.3 million, are the result of fraud exploitation within Canada. Total losses in 2013 represent 0.0093 per cent of domestic Interac debit card volume (0.93 basis points) and the lowest volume of recorded fraud losses. As a result of this significant decline in fraud exploitation, the number of cardholders reimbursed by financial institutions fell to 72,200 in 2013 from 238,000 in 2009. Cardholders are protected from losses under the Interac Zero Liability Policy*.
“The combination of sound policies, investments in technology - such as chip and fraud detection - and outstanding collaboration with financial institutions, acquirers, merchants and law enforcement makes the Interac system a world-class payment network,” said Caroline Hubberstey, Head of External Affairs for Interac Association and Acxsys Corporation. “Debit products are about accessing people’s money in their bank accounts and need to offer stronger protections. Debit is our expertise, and when we have control over the payments environment, our leadership in fraud prevention is evident.”
Criminals are increasingly migrating their payment card fraud activity to international exploitation in non-chip environments and card-not-present (i.e., over the Internet and telephone) exploitation on credit cards and other networks’ debit products. Unlike these products, Interac rules offer account holders the added protections of not allowing card-not-present, offline and signature transactions. For example, for Interac transactions, the number on the front of the bank card is an identifier only, not an account number, and cannot be used to conduct card-not-present transactions. Instead, Interac ecommerce transactions are conducted through Interac Online, which leverages the security of web banking. No personal financial information is ever provided to merchants. These rules also protect cardholders from fraud resulting from payment card data security breaches, such as those recently reported in the media.
“The statistics clearly show that we are having solid success locking down the Canadian payments space to stop criminals committing Interac debit card fraud,” emphasized Hubberstey. “We’re delivering a strong message – the Interac system is not a place for criminals to do business.”
Chip technology is another key part of the Interac fraud prevention strategy. This smart technology also enables advancements like Interac Flash®, which is currently being rolled out across the country.
While not all contactless technologies are created equally, the Interac Flash solution is secure because it leverages secure chip processing, not magnetic stripe data type processing. This, along with the policies outlined above, protects Interac Flash against counterfeiting and transaction replay types of fraud, including electronic pick-pocketing.
“As an enhancement of Interac Debit, Interac Flash has all the security benefits plus added features to protect cardholders,” said Hubberstey. “With Interac Debit and Interac Flash, consumers are using one of the safest ways to pay with a payment card.”
At the end of January 2014, 95 per cent of point-of-sale (POS) terminals had been converted to chip technology. Over 95 per cent of Interac transactions at POS terminals are chip-on-chip transactions. All POS terminals are to be converted by the end of 2015.
In support of Fraud Prevention Month, Interac Association, a member of the Competition Bureau’s Fraud Prevention Forum, has created an infograph that provides further insight to consumers around the security of Interac Flash.
About Interac Association and Acxsys Corporation
A recognized world leader in debit card services, Interac Association is responsible for the development and operations of the Interac network, a national payment network that allows Canadians to access their money through Interac Cash at 60,000 Automated Banking Machines and Interac Debit at 766,000 point-of-sale terminals across Canada. Interac Flash, a secure contactless enhancement of Interac Debit, allows Canadians to pay for items instantly with their Interac chip debit card at a reader that supports Interac Flash.
Interac Association was founded in 1984 and is comprised of a diverse membership that includes banks, trust companies, credit unions, caisses populaires, merchants, and technology and payment related companies.
Other related services offered by Acxsys Corporation, whose shareholders are the architects of the Interac network, include: Interac Online, for secure online payments made directly from a bank account; Interac e-Transfer®, for the transfer of money from one person's bank account to another person's bank account using an email address or mobile phone number**; and international services, which provide Canadian cardholders with point-of-sale access at nearly 2 million U.S. retailers, and PULSE, Discover, Diners Club International and UnionPay cardholders access to ABMs in Canada.
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Interac Association and Acxsys Corporation
Interac, the Interac logo, Interac Flash and Interac e-Transfer are registered trade-marks of Interac Inc. Used under license.
* All Interac cardholders are protected from losses resulting from circumstances beyond their control under the Interac Zero Liability Policy. See your financial institution for details.
**The Interac e-Transfer service, for secure person-to-person payments, is currently available to customers of over 200 banks and credit unions including BMO Bank of Montreal, CIBC, President's Choice Financial, National Bank, RBC Royal Bank, Scotiabank and TD Canada Trust among others. Central 1, through participating credit unions, offers the option of using mobile phone numbers, in addition to email, to notify Interac e-Transfer recipients. Money never travels by email or text message. More information about the Interac e-Transfer service and a complete list of participating banks and credit unions can be found at www.interac.ca.