If the US Follows the Post EMV Fraud Path of the Turkey
Best-in-Class Fraud Prevention as a Matter of Principle
If the United States were to follow the post EMV fraud path of Turkey then the US will see fraud peak at around $9.42 Billion per year in 2022, with almost no change in fraud levels from 2017 to 2022. Like the United States, Turkey saw large increases in CNP fraud after the first year of EMV Chip and Pin implementation; however, Turkey quickly turned the situation around and has kept fraud steady. What can the United States do to put the breaks on fraud growth and can we learn anything from Turkey?
The glaring difference between the US and Turkey is that the later has never played fast and loose with fraud. While other nations have seen sometimes wild ups and downs in card fraud, Turkey has remained flat since 2008. Much of the credit in Turkey goes to banking institutions and in 2015, Garanti Bank won the FICO award for fraud control. Despite having low fraud to begin with, Turkey continues to invest in best-in-class fraud prevention tools to stay ahead of the criminals and protect businesses and consumers.
Just to be clear, Turkey is no laggard when it comes to card use. In 2013, 75% of the population had cards with a total of 57 million cards in use. Turkey has seen world leading growth in ecommerce and currently 25% of Turks shop online. Turkey is still a traditional society and most cards are used to withdraw cash, but 70% of the people who use the internet are under 35, boding well for the continued growth of ecommerce. Because of the rapid growth of ecommerce and tight controls on other types of fraud, most criminal purchases are in card-not-present transactions, with these transactions making up nearly 65% of total losses in Turkey.
If there is a lesson to be learned from Turkey it’s that vigilance matters and that building products and services with a strong eye on fraud can reap continuous rewards soon after the investments are made. Further, even when things are good, they don’t let their guard down. We can all learn a thing or two from Turkey and in the coming years, as mobile payments take center stage, it behooves us to keep an eye on how Turkey approaches fraud in this new channel. It could save us a fortune, literally.