MasterCard fraud levels at 'historic lows' in SA

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(Shutterstock)

Johannesburg - Fraud levels relating to MasterCard bank cards in South Africa are at historic lows.

This is according to Johan Gerber, the Group Head of Processing Product Management at MasterCard, who spoke to Fin24 during his visit to Johannesburg last week.

Gerber did not reveal South Africa’s exact MasterCard fraud statistics, but he has based his assertion on basis points and his company’s GDV (Gross Dollar Volume) data.

"In terms of the fraud levels, it's almost at historic lows and it's been declining steadily over the last couple of months, which is great. It means people are doing a good job here,” Gerber told Fin24.

"I can tell you that it is at historic lows and if I compare it to the rest of the globe, you're running below the average. Not by much, but you're below the average, which means you're in a good spot,” Gerber said.

Widespread adoption of Chip and PIN or EMV (Europay, MasterCard and Visa) technology is a key reason for South Africa tackling card fraud better than other nations across the globe, Gerber explained.

South Africa is ahead of even the US, which has not yet fully adopted EMV technology yet.

"We've done a great job with EMV and certainly the South African market has been at the forefront of running with a lot of the new innovative technologies,” Gerber told Fin24.

SA’s card fraud stats

Overall card fraud figures for the South African banking industry, however, continue to paint a worrying picture.

While MasterCard has said that its card fraud statistics in SA are at historic lows, the South African Banking Risk Information Centre (Sabric) last year expressed concerns over “the increase in card fraud from January to September 2014”.

“The banking industry’s gross fraud losses due to South African issued credit card fraud increased by 23% from R366m in 2013 to R453.9m in 2014,” Sabric said in a statement late last year.

Sabric CEO, Kalyani Pillay, said false application fraud was the biggest contributor to this increase as its levels shot up from R6.2m in 2013 to R78.3m in 2014.

Sabric also highlighted that criminals misuse online application channels provided by banks. These criminals, for example, use false details to open multiple credit card accounts.

“Consequently, they then obtain legitimate cards and PINs,” said Sabric.

‘Card Not Present’ fraud committed within South Africa also increased by 21% from R56.7m in 2013 to R68.9m in 2014, said Sabric.

Meanwhile, losses associated with debit card fraud also showed an increase of 5% from R117.7m to R123.5m in 2014.

However, Sabric did say that counterfeit credit card fraud losses inside South Africa decreased by 12% from R55.1m in 2013 to R48.4m in 2014.

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