The United State accounts for 47 percent of all global credit and debit card fraud despite the fact that it generates only 27 percent of the total volume of purchases and cash, according to a recent report.
Unfortunately, small businesses often bear the brunt of credit card fraud from both internal and external threats.
The recent Nilson Report - a respected source of global news and analysis of the credit/debit/prepaid card industry - also reveals that payment card fraud losses totaled $3.
56 billion last year in the U.
S.
from all sources including general purpose, private label, signature and PIN payment cards.
According to David Robertson, publisher of the report, there are two reasons that the U.
S.
has a disproportionate percentage of the global total losses.
"U.
S.
banks have been slow to adopt newer technologies such as EMV chip cards, and issuers are reluctant to decline card authorization from merchants because they don't want to alienate their cardholder," he explains.
Robertson expounded on the latter point by explaining that competition among U.
S.
card issuers has reached a point that the average cardholder has four cards in their wallet, so if an issuer declines an authorization the customer can just pull out a competitor's card to complete the transaction.
For small businesses, fraud is a very real problem.
Identity and data thieves often target this group of merchants because they perceive them to be less vigilant than larger businesses when it comes to preventing data breaches.
Typically, small businesses lack strict internal controls, so they may miss warning signs that fraud is taking place, especially when it's perpetrated by employees.
If the breach involves card fraud or identity theft, the repercussions for the business can be dire.
In its 2010 Report to the Nations on Occupational Fraud and Abuse, the Association of Fraud Examiners reported that the typical organization loses five percent of its annual revenues to fraud, and that frauds can last a median of 18 months before being detected.
All businesses - and small businesses in particular - need to be alert to potential fraud situations.
For example, data breaches involving credit card processing can be avoided by achieving and maintaining PCI compliance.
This means meeting the Payment Card Industry Data Security Standards (PCI DSS) established by the five major payment card brands.
PCI DSS is a set of requirements established to ensure that all merchants who process, store or transmit credit card information maintain a secure transaction environment.
Data breach and credit card fraud are issues of concern to all businesses, the credit card processors who serve them, issuing banks and credit card networks.
Although there is no law requiring PCI compliance, merchants who do not comply and suffer a data breach may end up paying dearly in the form of fines, costly audits and card replacement costs.
Worse yet, they could suffer crippling if not fatal damage to their business and personal reputations.
When it comes to credit card fraud, the best business practice is better safe than sorry.
Unfortunately, small businesses often bear the brunt of credit card fraud from both internal and external threats.
The recent Nilson Report - a respected source of global news and analysis of the credit/debit/prepaid card industry - also reveals that payment card fraud losses totaled $3.
56 billion last year in the U.
S.
from all sources including general purpose, private label, signature and PIN payment cards.
According to David Robertson, publisher of the report, there are two reasons that the U.
S.
has a disproportionate percentage of the global total losses.
"U.
S.
banks have been slow to adopt newer technologies such as EMV chip cards, and issuers are reluctant to decline card authorization from merchants because they don't want to alienate their cardholder," he explains.
Robertson expounded on the latter point by explaining that competition among U.
S.
card issuers has reached a point that the average cardholder has four cards in their wallet, so if an issuer declines an authorization the customer can just pull out a competitor's card to complete the transaction.
For small businesses, fraud is a very real problem.
Identity and data thieves often target this group of merchants because they perceive them to be less vigilant than larger businesses when it comes to preventing data breaches.
Typically, small businesses lack strict internal controls, so they may miss warning signs that fraud is taking place, especially when it's perpetrated by employees.
If the breach involves card fraud or identity theft, the repercussions for the business can be dire.
In its 2010 Report to the Nations on Occupational Fraud and Abuse, the Association of Fraud Examiners reported that the typical organization loses five percent of its annual revenues to fraud, and that frauds can last a median of 18 months before being detected.
All businesses - and small businesses in particular - need to be alert to potential fraud situations.
For example, data breaches involving credit card processing can be avoided by achieving and maintaining PCI compliance.
This means meeting the Payment Card Industry Data Security Standards (PCI DSS) established by the five major payment card brands.
PCI DSS is a set of requirements established to ensure that all merchants who process, store or transmit credit card information maintain a secure transaction environment.
Data breach and credit card fraud are issues of concern to all businesses, the credit card processors who serve them, issuing banks and credit card networks.
Although there is no law requiring PCI compliance, merchants who do not comply and suffer a data breach may end up paying dearly in the form of fines, costly audits and card replacement costs.
Worse yet, they could suffer crippling if not fatal damage to their business and personal reputations.
When it comes to credit card fraud, the best business practice is better safe than sorry.