Merchant’s fraud losses have increased with 33% from 2013 to 2014[i] hitting the all-time high – 10 billion USD.[ii]

“An executive at a large national issuer and acquirer says that only 50% of transactions disputed are actually recovered. As the costs accrue in protracted disputes, it is often against banks’ interest to vigorously pursue chargebacks.”

“Several Financial Institution executives agree that the dispute process pits issuers against merchants and networks when they should be collaborating against a common enemy.”

“44% of fraud victims didn’t get all their money back[iii], despite both bank guidelines and the European Payment Services Directive requiring that customers who have not acted negligently or dishonestly be refunded.”

 As stated by the European Banking Authority[iv], it has become crucial to enforce a liability shift on Internet payments from August 2015 within the EU/EEA market territory.  All in favor of the end users that suffers from financial fraud.

By the statements above, any observant reader may see that weak payment security has become the enemy, of not only merchants and end user, but eventually also the banks.  The only beneficiary of current weak payment security and regulations are now the cyber-criminals.

Weak payment security has, indirectly through Payment Services Directive II, even paved the way of converting banks into being a utility – a subordinated back office of the new and emerging 3rd party compliant payment service providers.[v]

The real cost of weak payment security has become very visible to the banks. Simultaneously the challenge and the opportunity for each bank becomes very clear; enable strong and compliant payment security together with innovative, user-friendly and competitive services, or lose your customers.


[i] According to the 2014 Annual report[i] from LexisNexis:


[iii] According to the British Crime Survey[iii] from 2010, referred to by BBC:  and Cambridge University:


[v] The Payment Service Directive II (PSD2) is being implemented in EU/EEA legislation: