Total US Card Fraud Losses to Surpass $12 Billion in 2022

Purchases made via phone, internet, or mail-order using stolen cards will continue to climb, surpassing $10 billion by 2024, according to Insider Intelligence. When chip cards were introduced to the US credit card market in 2015, they played a big role in slowing the growth of fraudulent transactions, mainly those made in person at the point of sale (POS). But they did little to curb eCommerce fraud.

This year, card-not-present payments fraud losses will reach $8.75 billion in the US, up by 11.3% over last year. That equates to a growing 72.0% share of all fraudulent card purchases. While the growth rate will slow in the coming years, stolen card purchases via the internet, phone, and mail-order will reach $10.16 billion by 2024 making up 74.0% of all fraudulent card transactions.

“Fraud tends to migrate to the weakest channel,“ Jaime Toplin, senior analyst at Insider Intelligence, said. “With in-store payments increasingly becoming safer, eCommerce has become a ripe target for malicious actors. While fraud growth is slowing overall thanks to the dominance of in-store retail, ongoing eCommerce growth will keep losses high. This can create a heavy burden to bear for merchants and issuers, who may see losses hurt bottom lines and erode customer loyalty. But it will lead to ongoing innovation in the fraud prevention space.“

A larger portion of the losses is happening via credit cards versus debit cards, partly because credit cards are more popular online. This year, $5.72 billion in fraudulent online, phone, and mail-order transactions will be done via credit cards, compared with $3.03 billion via debit cards. The proportion will remain virtually unchanged through 2024.

Total losses from fraudulent transactions (including in-person) in the US will climb by 8.2% this year to reach $12.16 billion. While the growth rate slowed considerably in 2016 following the introduction of chip cards, it spiked in 2020—mainly because of the pandemic-led shift to eCommerce—and has been declining since.

The growth of fraudulent in-person transactions specifically dropped dramatically in 2016 due to the proliferation of chip cards. In 2015, total fraud losses from in-person payments grew by 22.8% over the prior year to reach $4.03 billion. In 2022, that figure will be down to $3.40 billion.