Credit Card Fraud Prevention Takes Center Stage in Russia
As Russia’s online and mobile commerce landscape continues to expand, credit card fraud prevention has become a top priority for merchants looking to tap into this lucrative market.
An Underdeveloped Market with Huge Potential
With an estimated 83% of card transactions involving cash withdrawals, and only 17% being direct payments for products and services, Russia’s underdeveloped card market presents a significant opportunity for growth. However, the country’s fraud landscape is also a major concern.
The Rise of Credit Card Fraud in Russia
Figures from FICO reveal that credit card fraud in Russia increased dramatically between 2006 and 2013, with losses reaching €104 million in the latter year. Hacking and phishing attacks have also become more prevalent, targeting banks, payment systems, and airlines.
Counter-Fraud Measures Already in Place
In response to these concerns, several counter-fraud measures are already in place, including payment verification via mobile messages. Visa reports that credit card fraud rates in Russia remain very low, with losses costing the company ten times less than its global average.
Changes in Russian Law Shift Burden of Proof
A recent change in Russian law has also shifted the burden of proof for consumer liability in fraud cases. Previously, banks had 40 days to investigate claims before reimbursing consumers, and customers were required to prove their innocence in court if they were suspected of involvement. Under the new law, which came into effect in January 2013, banks are now obligated to return stolen funds to victims within 24 hours.
Trust Remains a Major Issue
Despite these efforts, trust remains a major issue in Russia’s domestic e-commerce market. According to Search Laboratory, consumers appear more confident in buying from established foreign brand names, with overseas fashion brands dominating the top 25 most searched for brands on Yandex, Russia’s leading search engine.
Mobile Payment Growth Expected to Continue
With mobile phone penetration reaching an impressive 161%, and 23% of users now accessing the internet via a mobile device, mobile payment growth is expected to continue. However, merchants will need to ensure they adopt tailored fraud strategies to control mobile fraud while enabling genuine customers.
Conclusion
As Russia’s online and mobile commerce landscape continues to evolve, credit card fraud prevention will play a crucial role in protecting consumers and merchants alike. By adopting best-in-class fraud prevention tools and staying ahead of the latest threats, Russian businesses can capitalize on this vast market opportunity while minimizing losses from fraudulent activity.
Key Takeaways:
- Credit card fraud prevention is a top priority for merchants in Russia
- The country’s underdeveloped card market presents a significant opportunity for growth
- Counter-fraud measures are already in place, including payment verification via mobile messages
- Changes in Russian law have shifted the burden of proof for consumer liability in fraud cases
- Trust remains a major issue in Russia’s domestic e-commerce market
- Mobile payment growth is expected to continue, with merchants needing to adopt tailored fraud strategies.