Kenya has been ranked at the top of African countries in which South African-issued credit cards were used to commit fraud in 2017 to the tune of Ksh 23,947,983.33 (R2,943,694). It is followed by Ethiopia, Zimbabwe and Zambia.
According to the latest card fraud booklet by the South African Banking Risk Information Centre (SABRIC), there were a total of 255 fraudulent transactions at merchants in the country, majority of which 166 were through Card Not Present (CNP) fraud. 85 transactions were committed using counterfeit credit cards while three were stolen.
SABRIC says the percentage of all credit card gross fraud losses that occurred at merchants
outside the borders of South Africa rose from 50.6% in 2016 to 53.4% in 2017.
The remaining 46.6% of transactions occurred at merchants in South Africa. CNP fraud was the leading
contributor to the gross fraud losses on SA-issued credit cards in 2017, with 72.9% of the overall credit
card gross fraud loss Ksh 3.6 billion (R436.7m) attributed to CNP fraud.
“CNP credit card gross fraud losses increased by 7.4% from R296.4m in 2016 to R318.4m in 2017.
A total of R200.0m (85.8%) of the overall gross fraud losses (R233.2m) occurring outside South Africa can be attributed to CNP credit card fraud. Counterfeit credit card fraud decreased by 23.2% when compared to 2016,” it says.
CNP fraud is a fraudulent transaction where neither the card nor the cardholder is present while transactions are being made. These transactions occur when retailers are unable to check the card or the identity of the cardholder and are conducted under the following circumstances: orders for goods placed
telephonically, purchases conducted via the internet, purchases by mail order or fax.
The losses associated with counterfeit credit card fraud decreased from R108.9 in 2016 to R83.6m in 2017. Although the gross fraud losses decreased, 19.1% of the total gross fraud loss can still be attributed to counterfeit card fraud. Fraudulent spend using lost and/or stolen credit cards increased by 44.5% during 2017 and amounted to R25.7m in total.
Lost and/or stolen cards are mainly used in South Africa with only 23.9% of the losses related
to transactions outside South Africa. SA-issued credit cards were used in other African countries in 2017 to the value of R11.8m.
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With regard to debit cards, Kenya is ranked 4th with a total of 79 transactions amounting to Ksh 3.3 million out of a total of Ksh 59 million lost in African countries. Zimbabwe tops in this category followed by Mozambique and Zambia.