CNP Fraud Losses Represent Nearly Three-Fourths of Total Card Payment Fraud Losses in the US

Card Not Present (CNP) payment fraud losses in the US are expected to increase to nearly $9.5 billion in 2023, according to eMarketer. This marks an 8.5 percent increase from 2022 while CNP channel fraud will represent 73 percent of total card payment fraud in the United States.

Most notably, the share of card-based payment fraud that occurs in the CNP channel has increased from 57 percent in 2019 to 72 percent in 2022. Although the year-over-year increase in CNP card fraud is diminishing, it is expected to grow by an additional 7 percent in 2024 to reach $10.16 billion and represent 74 percent of total card payment fraud losses.

The biggest increase in CNP card fraud occurred in 2020, in lockstep with burgeoning eCommerce growth amidst the pandemic. Retail eCommerce sales in the US grew by 36.4 percent from 2019 to 2020 while CNP fraud rates kept pace, growing by 31.2 percent. CNP fraud losses grew as a share of total card payment fraud losses in the US from 57 percent in 2019 to 66 percent in 2022.

CNP fraud activity is beginning to normalize but remains elevated. The annual growth rate of CNP fraud losses remained in the double-digits in 2021 and 2022, at 19.1 and 11.3 percent, respectively. eMarketer forecasts continued diminishing, but still meaningfully high, CNP fraud growth rates of 8.5 percent in 2023 and 7 percent in 2024.

eMarketer concludes that “merchants and issuers should focus on allocating resources to tighten up security” in CNP channels as CNP fraud losses now represent nearly three-quarters of total card payment fraud losses in the United States.