This is largely, says the report, thanks to technological advances that are making transactions safer, but fraud is still migrating to countries where the technology remains less developed.
Between 2010 to 2011, the analysis says there was a further decrease in the value of fraud, despite growing card usage in the Single Euro Payments Area (SEPA) – which consists of 32 countries and 516 million citizens.
Delving into the report reveals that for debit and credit cards, Cardholder Not Present (CNP) fraud was the most used fraud channel, accounting for 68pc of all fraud, followed by fraud occurring at POS terminals (25pc) and at ATMs (7pc).
For debit cards, it seems that CNP fraud was most common, accounting for 48pc of all fraud, followed by ATM fraud (34pc) and fraud at POS terminals (18pc).
The report also found that there was a further decrease in the total value of fraud between 2010 and 2011 – a decrease accompanied by an increase in regular card transactions.
Interestingly, the report found that levels of fraud were lower in the euro area than in SEPA as a whole.
“An analysis of payment flows within and across SEPA demonstrates once more that card fraud is an internationally organised activity, necessitating cooperative fraud prevention measures and international industry standards,” says the report.
“In particular, when looking at fraud using counterfeited cards, there continues to be a major shift towards acquiring countries with low security standards. Where magnetic stripe usage in such countries cannot be completely avoided, joint measures should be considered which quickly identify points of compromise that can then be communicated to card issuers as a precondition for card blocking,” it adds.
The ECB report goes on say that domestic country transactions typically experienced lower fraud levels than cross-border transactions.
This suggests, says the analysis, that access to information is key in preventing fraud. And improving the exchange of information between the different actors involved can be seen as a major factor in combating fraud.
As you might expect, ITSP notes, the report says there were higher rates of fraud for payments made over the Internet than for traditional payment methods.
ATM fraud reducing
The report concludes that improvements in the security of cards and in the underlying payment infrastructure are the main reason for a slowdown in growth of ATM fraud, as well as in the more than 24pc drop in fraud carried out at POS terminals.
The most significant improvement, says the ECB analysis, was the more widespread adoption of EMV, a chip-based security standard that is much safer than conventional magnetic stripes – which goes hand-in-hand with improvements to the infrastructure behind each transaction.
However, adds the report, this trend has partially shifted the problem to countries where smartcard chips are not yet prevalent.
For credit and delayed-charge debit cards – which are predominantly used for Internet and cross-border transactions, €1 in every €1,100 (around 0.09pc) was spent in a fraudulent transaction.
For debit cards, which are more commonly used in stores and for cash withdrawals, meanwhile, the ECB report says that the proportion was €1 in every €5,200 (just 0.02pc).