Instances of card fraud at their lowest level for five years

Airi Uiboaid
Airi Uiboaid
Eesti Pank Payment and Settlement Systems Department

The report published last week by the European Central Bank on card fraud showed that card payments have become more secure due to technological advances and that the share of card transactions that are fraudulent has fallen to its lowest level for five years. In 2011 card fraud accounted for some eight million transactions with a total value of one billion euros in the 32 countries of the Single Euro Payment Area, SEPA*.

In 2011, 5000 fraudulent transactions worth around 900,000 euros were made using cards issued in Estonia. This is equal to 0.002% of all card transactions, which is one of the lowest figures of any member state of the European Union. This means that around three out of every thousand cards issued in Estonia was connected to a fraud, and there were four cases of fraud for every thousand inhabitants, which compares favourably to the 11 frauds per thousand cards and 15 per thousand people in the SEPA as a whole. The most common type of card fraud in Estonia, accounting for 42% of cases, is committed in card-not-present (CNP) payments, which are payments initiated over the internet.

Frauds at automated teller machines (ATMs) accounted for 39% of cases, and those at point-of-sale (POS) terminals for 19%, and these frauds mostly used counterfeited bankcards. Counterfeited bank cards accounted for 95% of the total value lost at ATMs and POS terminals due to fraudulent transactions, with stolen or lost cards used for only 5%.

The number of incidents of card fraud in the SEPA fell by 6.4% in 2011, and the value of the fraudulent transactions fell by 5.8%. Card fraud was less common in the countries of the euro area than in the SEPA as a whole. Fraudulent transactions accounted for 0.036% of the total value of all card transactions, and 0.016% of the total number of transactions, which is the lowest figure for five years. The value of fraud from CNP payments accounted for 56%, or more than half, of the value of fraud, with fraud at POS terminals accounting for another quarter and incidents at ATMs for a fifth. This meant that CNP fraud was unchanged, ATM fraud had increased slightly and POS terminal fraud had declined by around one quarter.

It is recommended that cardholders improve their security by reviewing the limits on their bank cards for cash withdrawals or transactions per day. These limits help reduce the losses from fraud as large transactions cannot then be made with the card and the bank account related to the card cannot be emptied. Victims of card fraud must contact the bank that issued their card immediately. A victim who is not at fault for the fraud will eventually get their stolen money returned.

Card fraud is mostly committed by international organisations and stopping it requires cooperation across Europe through preventative measures and international standards. Central banks, banks and card schemes have made great efforts to prevent card fraud, and they have adopted new measures to make card payments more secure by migrating to the EMV security standard. Cards with magnetic stripes are being replaced throughout the Single Euro Payment Area by cards with chips, which reduce card fraud and copying of cards. Estonia has been particularly successful in this, as all cards issued in Estonia have a chip as well as a magnetic stripe.

Fraud over the internet can be reduced with the use of the 3D Secure system, where an additional code that functions like a PIN code has to be entered when a card payment is made. Banks operating in Estonia have been rolling out this system under the names Verified by Visa and MasterCard SecureCode. The central banks and supervisory bodies of the European Union have set recommendations for payment service providers in order to ensure the security of payments over the internet. Payment service providers have until February 2015 to apply the recommendations.  

* The report on card fraud covers all the countries in the Single Euro Payment Area (SEPA), which are the member states of the European Union plus Switzerland, Iceland, Liechtenstein, Norway and Monaco.


The report by the European Central Bank and the central banks of the euro area countries on card fraud describes the trends in fraud. In 2012 information about card fraud was published for the first time.
There are 1.3 bank cards per inhabitant in Estonia and 1.4 per inhabitant on average in Europe, with 179 card payments per inhabitant per year in Estonia and 97 on average in Europe. These figures put Estonia in the top five for card use alongside Finland, Sweden, the UK and Denmark. At the same time, the number of card fraud incidents in Estonia is one of the lowest in the European Union, putting Estonia in the top ten for security.

For further information:
Ingrid Mitt
Public Relations Office
Tel: +372 668 0965, +372 512 6843
Email: ingrid.mitt [at]
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