Decrease in Fraud Losses Associated with Girocard Amid Rising Card Theft

Recent reports indicate a decline in overall fraud losses linked to the Girocard payment system, despite a notable rise in card theft incidents. When criminals gain access to card data and PIN numbers, the resulting financial impact can be significant. However, advancements in technology are playing a crucial role in mitigating these risks.

According to industry experts, the primary vulnerability leading to Girocard-related fraud stems from the mishandling of PINs. A significant portion of losses--over half--occurs when the card is improperly used at ATMs. Andreas Peppler, responsible for security management at Euro Kartensysteme, emphasizes that many consumers inadvertently make it easier for criminals by keeping their cards and PINs stored together.

Although the total amount of fraud losses recorded in 2024 was slightly lower than previous years, specific figures remain undisclosed. The last official report noted that in 2022, fraud losses reached approximately EUR29 billion. There is a concerning trend, however, as theft-related losses have increased, particularly when cards are obtained through pickpocketing, home burglaries, or car thefts. Criminals are adept at extracting cash through contactless payments, even without a PIN.

Data suggests that 92.5% of the total losses involve criminals who authenticate their transactions using the physical card along with the PIN. In some cases, they manage to create digital replicas of cards to use on their smartphones.

Interestingly, incidents of data theft via ATM manipulation, commonly referred to as skimming, have drastically decreased. Experts note that this method has become less appealing for criminals because stolen magnetic stripe data has limited utility. In fact, there have been no reports of ATM tampering in Germany during the first quarter of this year.

The use of card duplicates primarily remains an issue in countries where magnetic stripe technology is still prevalent. In contrast, the global adoption of EMV technology, which employs a built-in mini-computer to verify the authenticity of payment cards during transactions, has enhanced security significantly. Reports indicate that only 46 cases of counterfeit cards being misused abroad were documented in 2024, with the last instances occurring in Brazil and a few in the United States.

Peppler asserts that the chip card technology is secure and that the existing infrastructure is robust. He emphasizes, however, that the most significant weakness in this security framework is human behavior, as individuals often overlook basic security practices. The industry aims to further reduce fraud losses through increased consumer education and awareness.