European ATM fraud losses continue to fall, down by 14%........

The European ATM Security Team (EAST) has just released figures for the full year 2010 which show a second annual fall in European ATM fraud losses - total losses of €268 million were reported (down €44 million from €312 million in 2009 - see the table at the end of this post).  This is the second successive annual drop, following on from the 36% fall reported for 2009 and is very good news for the region.

EAST also reports that the majority (82%) of ATM related card skimming losses are now international with most occurring in countries outside of Europe, and states that that the significant investment made by the European banking sector into EMV technology, as well as into anti-skimming devices at ATMs, is now really starting to pay off.  Well so it should!  European ATM deployers and card issuers have been investing into EMV technology for at least 8 years now, and this drop in losses is a further return on that investment. 

According to EAST 97% of European ATMs are now EMV compliant, as well as 75% of Russian ATMs and 59% of ATMs in Canada.  Despite this heavy investment, why have we not seen a larger drop in losses?  Could it be because most European EMV cards still have a magnetic stripe?  The magnetic stripe is vulnerable to skimming and keeping it rather negates parts of the business case behind EMV.

Some form of magnetic stripe is required to allow EMV cards to enter motorised card readers - but there is no need to have sensitive card holder data on it - that should just be on the Chip.  Most parts of the world (with the notable exception of the USA) are now moving towards EMV compliance for ATMs and payment terminals.......and cardholders without EMV cards will find it increasingly difficult to use their cards as Chip only payment terminals become more prolific.

The good news is that Chip only debit cards have started to appear in Europe, with the Visa V PAY card being one example.  Also banks in some European countries, such as Belgium and Norway, have taken steps to restrict magnetic stripe usage on their cards outside of Europe - others may follow.  The European Central Bank has stated that from 2012 all new SEPA cards should be Chip only cards by default, although exceptions will be allowable.  And then there is China...............China has 271,000 ATMs now and is foecast to have 545,000 ATMs by 2015.  China UnionPay, the national bank card association, has announced that after 2015 magnetic stripe cards will no longer be issued in China.  The magnetic stripe may well be history in parts of the world before the end of this decade.

So while it is really good news that European ATM fraud losses have fallen again,  it would be nice to see more action taken across the world to remove the card data that is most vulnerable to fraudsters - the magnetic stripe.

More information on the EAST latest EAST report can be found on their website and the summary figures from the report are in the table below:

EUROPEAN ATM CRIME STATISTICS - SUMMARY (Source EAST)
ATM Related Fraud Attacks	2006	2007	2008	2009	2010	% +/- 09/10
Total reported Incidents	5,784	4,934	12,278	13,269	12,383	-7%
Total reported losses	€306m	€439m	€485m	€312m	€268m	-14%
ATM Related Physical Attacks	2006	2007	2008	2009	2010	% +/- 09/10
Total reported Incidents	2,207	3,550	3,043	2,468	2,062	-16%
Total reported losses	€28m	€31m	€26m	€28m	€33m	+18%