MAG Insights

Merchant Advisory Group (MAG) and CMSPI launch retail payments fraud investigation, with support from Fiserv 

MINNEAPOLIS — November 1, 2018 — With global card fraud methods shifting and adapting to new transaction channels, fraud management solutions must expand beyond a reliance on historical data analysis in order to remain effective, according to CMSPI’s 2018 Global Fraud Trend Analysis and Review. The report was commissioned by the Merchant Advisory Group (MAG), a merchant association representing the largest U.S. retailers, with support from Fiserv, Inc., a leading global provider of financial services technology solutions.

Authored by payments economics experts from CMSPI, an independent payments consultancy based in Atlanta, Georgia, the report examines global payment and fraud trends across the world, analyzes contributing factors behind shifting card fraud patterns, and identifies various fraud management solutions available to merchants. The report also found that growth in the card payments market and increased card-not-present (CNP) transactions continue to provide fraudsters with opportunities, and that the U.S is the most fraud prone market in the world.

 “It’s encouraging that the U.S. continues to implement new fraud-fighting capabilities, but we can and must do more,” said MAG CEO Mark Horwedel. “We’ve got to find and implement innovative industry solutions that provide benefits to all touchpoints in the payments process: merchants, issuers, networks, and consumers. We all have a role to play in adopting new technology to take the fight to the fraudsters.”

“As the world moves toward real-time service, merchants have a higher risk of realizing they have been a victim of fraud only after the goods have been delivered,” said David Keenan, senior vice president, Product Management, Card Services, Fiserv. “Payments providers can help prevent these situations by expanding fraud-detection techniques beyond the analysis of historical data and towards dynamic fraud-detection capabilities that incorporate real-time information in fraud detection.”

CMSPI and MAG conducted a survey of U.S.- and European-based retail merchants with questions regarding CNP fraud mitigation measures and card-present (CP) fraud. Of merchants who were exposed to CNP fraud, 81 percent stated they used in-house risk-based anti-fraud measures, and 76 percent said they used external measures to protect against CNP fraud, often as supplementary measures.  Merchants exposed to CP fraud were asked what was their most important consideration when choosing an EMV authentication method, and five recurring responses were identified: cost, risk, customer experience, speed, and complexity.

Merchants who were exposed to both CNP and CP fraud were asked what was the most common reason given by issuers for chargebacks. The question prompted open-ended answers, which were then grouped into different categories. The most common reason for chargebacks given was fraud related, followed by authentication issues, consumer disputes, chargebacks due to goods not received, and duplicate charges.  

About CMSPI

CMSPI is a leading independent payments consultancy, and works with hundreds of large merchants across the globe to advise on payments acceptance and strategy. CMSPI specializes in strategy relating to card processing, interchange optimization, cash management, PIN and PINless debit acceptance, big data analytics, and several other niche areas of payments. For more information, visit www.cmspi.com.

About the Merchant Advisory Group

The Merchant Advisory Group (MAG) was founded in 2008 by a small visionary group of merchants in the payments field dedicated to driving positive change in payments through multi-stakeholder collaboration. According to our year-end 2016 survey, the MAG represented over 130 of the largest U.S. merchants which account for over $3.3 Trillion in annual sales at over 900,000 locations across the U.S. and online. Roughly $2.6 Trillion of those sales and over 66 Billion card payments are electronic which represents approximately 59%* of total U.S. card volume. MAG members employ over 12 million associates. *Source of Total U.S. card volumes: Federal Reserve Payments Study 2016.

About Fiserv

Fiserv, Inc. (NASDAQ: FISV) enables clients worldwide to create and deliver financial services experiences in step with the way people live and work today. For nearly 35 years, Fiserv has been a trusted leader in financial services technology, helping clients achieve best-in-class results by driving quality and innovation in payments, processing services, risk and compliance, customer and channel management, and insights and optimization. Fiserv is a member of the FORTUNE® 500 and has been named among the FORTUNE Magazine World's Most Admired Companies® for five consecutive years, recognized for strength of business model and innovation leadership. Visit fiserv.com and follow on social media for more information and the latest company news. 

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Contact: Beth Provenzano, VP, Public Affairs, MAG I 952-928-4648 I Beth.Provenzano@merchantadvisorygroup.org