Fraud study finds MasterCard holding lowest fraud rate
Posted on 28 May 2014.
2Checkout released a study of online payments fraud, based on a worldwide sample of approximately one million payment transactions tracked each quarter.


Key findings:
  • Discover Card buyers are twice as likely to commit fraud as MasterCard buyers, and three times more likely than PayPal buyers.
  • Though MasterCard is one of the most commonly used credit cards in the world, it holds the lowest fraud rate of all credit cards; users of the card are 21% less likely to conduct a fraudulent transaction.
  • Using PayPal is safer than most credit cards. Some credit cards experience 3x the fraud rate of others.
  • Indonesia, Pakistan, and Romania consistently demonstrate high fraud rates, when evaluated by both the buyer’s billing address or IP address.
  • Conversely, Scandinavian countries (Norway, Finland, and Denmark) and Belgium demonstrate the lowest fraud rates. This is consistent whether these countries are evaluated by buyer billing address or IP address.
  • Regarding the value of transactions, the highest fraud rates occur at the most expensive and least expensive tiers. Transactions over $400 experience the highest fraud, followed by transactions valued at $19 and below.
  • Across all product categories, the highest global fraud rates are experienced by the cable, satellite and pay television segment, which experiences more than three times the average fraudulent activity. The lowest fraud rates are experienced in home furnishings, sewing and needlework products, as well as books and periodicals, which exhibit one tenth the typical fraud rates.
  • Across all fraud categories examined, the greatest predictor of fraud is the buyer’s country and the seller’s product category. Fraud rates can vary by 1000% from one country to the next and by 400% between different product categories.
  • The Russian Ruble is the safest currency in the world.
“As merchants seek sales growth by expanding internationally and selling into emerging growth markets, they will encounter fraud. I won’t hazard a guess as to why pay TV and Indonesian purchases are so rife with fraud, but fortunately there are ways to detect it before damage is done,” said Daniel Greenberg, CMO for 2Checkout.





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