Card Fraud Landscape in Australia
The Australian Payments Network (AusPayNet) has identified three principal merchant categories that dominate the card fraud landscape. These include advertising services, direct marketing and subscription services, and other business services. This identification was made by Toby Evans, Head of Economic Crime at AusPayNet, and David McGregor, Security Standards Manager, in their commentary analysing the severe but improving levels of overseas card fraud.
Online Spending and Card Fraud
According to their findings, online spending with overseas merchants, which amounted to around A$434 million in FY2025, accounted for only 3 per cent of total Australian card spending. However, it accounted for a staggering 52 per cent of all fraud on Australian-issued cards. This data signifies a critical discrepancy in the balance of online spending and its corresponding fraud rate.
The Impact of Bank and Card Scheme Efforts
Evans and McGregor noted that the joint efforts by banks and card schemes have resulted in overseas Card-Not-Present (CNP) losses plateauing from FY2024. This is evident as the overseas fraud rate fell from $12.45 in FY2024 to $10.75 per $1000 spent in FY2025. Despite this improvement, this rate is still over 10 times higher than domestic CNP fraud.
Domestic CNP Fraud Rates
In FY2025, domestic CNP fraud declined from $351 million in FY2024 to $312 million, leading to a record-low domestic fraud rate of 75 cents per $1000 spent. This reduction in domestic CNP fraud rates is a testament to the effectiveness of the banking and card schemes’ efforts, along with the AusPayNet’s CNP Fraud Mitigation Framework (CNP Framework) and the use of strong customer authentication (SCA).
Overseas CNP Fraud Origins
AusPayNet revealed that its recent analysis by its members showed that over 50 per cent of overseas CNP fraud originates from US-based merchants, with Ireland being the second-highest source. The security failures in these merchant categories are glaring, with strong customer authentication being absent in nearly all fraudulent transactions and the Card Security Code not being used in one-third of high-risk transactions.
Recurring Advertising Services Fraud
Furthermore, 94 per cent of advertising services fraud involved recurring payments, indicative of account takeover and credential compromise. This data strongly supports suspicions within the payments industry that criminals are exploiting compromised payment credentials to establish the infrastructure used to carry out scams, particularly the publication of fraudulent advertisements.
By identifying these merchant categories and the sources of fraud, AusPayNet aims to tackle and reduce the incidence of card fraud in Australia. The efforts of banks, card schemes, and AusPayNet in enforcing stricter controls and implementing effective security measures are gradually yielding results, as indicated by the decreasing rates of domestic CNP fraud.
With further action and vigilance, it is hoped that card fraud, both domestic and overseas, can be further curbed to ensure the security of card transactions for all Australians.
Source: Here
