up with card schemes MasterCard, Visa and American Express to
strengthen the payments industry’s crackdown on fraud.
First Data fraud director Jackie Barwell said the industry needed
to take a leaf out of the fraudster’s book and collaborate more
effectively to develop better systems to beat fraudulent activity.
She said there was a particular opportunity to reduce
card-not-present (CNP) fraud, and fraudulent transactions abroad.
She also revealed card schemes are looking at extending the use of
chip authentication programmes (CAPs) – customer-held card readers
– from online banking access to all online payments.
Barwell said: “The more people that come together to discuss what
they know on fraud the better. Fraudsters are successful because
they collaborate, they share information and they work
“They take lessons from best practice and they are very, very good
at it. I think the industry needs to do the same to be successful
First Data has already had some progress on its anti-fraud agenda
by organising workshops for its card-issuing clients to debate
strategies on reducing illegal transactions.
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She said the main issues raised in the sessions involving card
issuers were fraud abroad, account take-over, funds transfer fraud
and card-not-present fraud. And Barwell said the next logical step
would be to approach card schemes MasterCard, Visa and American
She said: “We need to create some kind of official forum where we
can come together and discuss these issues. Certainly, the schemes
will have a certain level of knowledge from their members, and we
will have a level of knowledge and experience, even on an
operational level, about fraud that’s happening today.”
Barwell said First Data had fraud experts across its business in
Europe, Middle East and Africa, Asia-Pacific, Europe and Latin
America. She said discussions for the forum could include
discussing new fraud trends, modus operandi and risks for new
products or payment methods.
While the parties would be unable to talk about specific customer,
bank or issuer information, they could collaborate when suspicious
trends were noticed at particular ATMs – for example UK-issued
cards being used fraudulently in a particular US ATM, Barwell
A spokesperson for APACS, the UK payments organisation, said it
would broadly support anything which would help reduce card
Barwell also revealed she understood the schemes were experimenting
with CAPs – handheld card readers currently issued by some banks
for cardholders to access internet banking – to reduce CNP fraud.
The schemes were looking at extending the use of the CAP devices
more broadly, to include all online transactions.
The move would mark another big step for the card schemes’ attempts
to reduce CNP fraud. They have already seen an enthusiastic uptake
of their initial efforts aimed at reducing CNP fraud. MasterCard
and Visa have both introduced schemes which require cardholders to
submit extra information when they are making an online
Recent research from APACS showed 25 million cardholders had signed
up to MasterCard’s SecureCode and Visa’s Verified by Visa, marking
an increase of 650 percent compared with two years ago. Customers
were signing up to the services at a rate of 1.5 million a
The figures mean that more than half of the UK’s online shoppers
have registered the cards in the two schemes.
Contactless and prepaid fraud issues
Aside from CNP and overseas fraud, Barwell said First Data’s
clients were particularly interested in discussing the main issues
concerning prepaid and contactless card products. On prepaid, she
said one of the main concerns was the anonymity of the product,
which makes them particularly appealing for fraudsters.
One type of fraud popular on prepaid cards is for criminals to use
stolen cards to load funds onto prepaid cards and sell them on at a
discount to the value loaded on the card. Barwell said this could
be mitigated by ensuring issuers know who holds the card, who is
loading it, which card is being used to load it and how the spend
is taking place.
Barwell said: “This is certainly what we would recommend in terms
of understanding how prepaid cards are being used, because there is
this increased risk of money laundering ability, especially on
On contactless, issuers raised the issue of card skimming as their