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Insights into the French Payment Market
During this past summer, you might have missed an important update: the "Observatoire de la sécurité des moyens de paiement," the organization responsible for monitoring payment method security in France, released its annual report for 2022. We'd like to share some key findings with our community:
- Card Payment Fraud Decline: Card payment fraud in France has continued to decrease, dropping from 0.059% in 2021 to 0.053% in 2022. This decline can be attributed to a full year of Strong Customer Authentication (SCA). Compared to 2019, when SCA was not yet implemented, the decrease in 2022 is one-third.
- Mobile Payment Fraud: mobile payment fraud remains relatively high at 0.061%. The primary reason for this is issues with onboarding of stolen / fraudulent card numbers into mobile wallets.
- Wire Transfer Fraud: Wire transfer fraud is on the rise, albeit with a relatively small overall amount (313 million euros in 2022 compared to 78 million euros in 2017). Small businesses and individuals were the primary targets in 2022.
- Banking Staff Impersonation: In 2022, attackers increasingly used impersonation of banking staff to obtain SCA approvals from victims. For instance, Monzo in the UK introduced a new in-app feature to identify whether a call was initiated by a staff member.
- Card Payments on the Internet: Card payments made on the internet outside of 3D Secure and its exemptions, which still account for 27% of all transactions by value, are three times more susceptible to fraud at 0.321% compared to 3D Secure transactions with a fraud rate of 0.110%. However, this type of fraud represents 53% of all card payment fraud on the internet. The Observatory has delved into this data for the first time, identifying the following main areas of concern:
- Merchant Initiated Transactions, emphasizing the need for SCA at initiation.
- PSD2 non-compliant payments, which still constitute 19% of the total value and will be scrutinized by authorities.
- PSD2-compliant but not 3DS-based transactions, where issuers accept payments outside of exemption rules for specific reasons.
- One-leg transactions, conducted with merchants outside the European Economic Area (EEA).
You can read the entire report here.
At Okay, we are pleased to report that app-based authentication methods are gaining ground, accounting for 82% of all strongly authenticated transactions, compared to Strong One-Time Passwords (OTP) and vocal services at 10% in France. App-based authentication is not only more user-friendly but also more secure.
If you're considering transitioning from OTP to app-based authentication, please feel free to reach out; we're here to assist you.