EBA Discussion Paper on its preliminary observations on selected payment fraud data under the PSD2

Date: 17/01/2022
Source: European Banking Authority

On 17 January 2022, the EBA published a discussion paper on its preliminary observations on selected payment fraud data under the PSD2. The preliminary patterns suggest the following trends:
• The regulatory requirements developed in relation to payment security are having the desired effect;
• The share of fraudulent payments in the total payment volume and value is significantly lower for transactions that are authenticated with strong customer authentication (SCA) than those that are not;
• Fraud is substantially higher for cross-border transactions with counterparts located outside the European Economic Area (EEA) than those conducted inside this area, which is a known pattern of payment fraud.
The deadline for submitting comments is 19 April 2022 and the following points, among others, may be highlighted: • In the discussion paper on payments fraud, the observations focus on the data on credit transfers, card payments (reported by both issuing payment service providers – PSPs – and acquiring PSPs) and cash withdrawals, thus making data available for two additional instruments than the card payments that are usually reported on;
• The fraud data on transactions initiated by payment initiation services providers (PISPs) have been particularly poor and often implausible, suggesting that PISPs are not compliant with applicable requirements, which the EBA will further investigate.
• Card payments are the most frequently used payment instrument and these transactions, compared with other payment instruments, experience higher fraud rates but lower average fraud amounts.

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