SA among the world’s top card

SA among the world’s top card fraud destinations

A global study places South Africa among the top countries, which are most susceptible to banking card fraud, as plastic is gradually becoming the preferred method of payment in the country

SA among the world’s top card


A new study reveals that almost a third of all South Africans have been victim to credit or debit card fraud in the past five years, with 14 percent reporting multiple occurrences of unauthorised transactions during that period.

Three in ten consumers in South Africa were reported to have become subject to fraud on their banking cards, according to the study conducted by ACI Worldwide and Aite Group – a company, which specialises in processing financial transactions. The survey, which was conducted in 20 countries, puts South Africa at a higher-than-average risk, with the mean risk across all the countries participating in the study being 25 percent, while SA is affected at a higher rate of 30 percent.

However, with South Africa coming in at seventh place, it is still more likely for a consumer to become subject to card fraud  in the United States of America (with a risk factor of 41 percent) or the United Arab Emirates, which topped the chart with a risk factor of 44 percent, making the odds close to one out of two people experiencing banking fraud within five years.

Even Australia performed slightly less favourably than South Africa in the study, taking up sixth position with a risk factor of 31 percent.

The study also revealed that one out of four consumers went on to change financial institutions on account of experiencing customer dissatisfaction in the aftermath of being victim to banking fraud .


Senior vice president of Payments Risk Management Solutions at ACI Worldwide and Aite Group, Mike Braatz, commented on the trend of lacking customer loyalty with banks following such instances of fraud:

“Consumers are increasingly concerned about fraud, and are losing confidence on a variety of levels. They are unsure that their financial institutions can protect them against fraud; they use replacement cards less often due to a loss of confidence in the card or card issuer, after experiencing fraud; and post-fraud, they often change providers or their cards go to back of wallet. This has immediate and long-term implications on customer loyalty, revenue and fee income.”

One of the other key findings of study suggested that at least 22 percent of the participants always left their smartphones unlocked, giving potential fraudsters access personal data including One Time Pins (OTPs) and other such measures taken by banking institutions in a bid to curb fraud.

The sample size of the study conducted in SA was comprised of 314 individuals, with 6,100 participating in the study worldwide.

Despite the worrying findings of the study, there are also some hints at improvement with regard to card fraud; the SA Banking Risk Information Centre (Sabric) reported last year that debit card fraud had decreased by 42 percent in 2013 compared to number from 2012 due to better measures being taken by financial institutions to curb unauthorised activities.

By Sertan Sanderson, 2014