Remote banking - and fraud - show explosive growth

Remote banking - and fraud - show explosive growth

Remote banking by telephone, PC, Internet or digital TV is seeing explosive growth with over a quarter of adults now managing their accounts in this way, according to figures released by UK payment body Apacs.

Over 12 million people now use remote banking services to manage their current accounts, compared to 8.5 million in 1999. It is also growing rapidly amongst businesses, with one in five of all businesses now using remote banking.

Within ten years 34 million adults (68% of the 16 and over population) are expected to be accessing their current accounts remotely through their phone, computer, TV, mobile phone or other devices, forecasts Apacs.

Apacs also notes the continued strong growth of plastic card payments - now the most popular payment method in the UK after cash - and a sharp rise in card crime. Fraud losses on UK-issued cards in 2000 rose to £292.6 million, reports Apacs, up by 55% on 1999. The majority of this increase was attributable to the use of counterfeit cards (+104%) and to fraudulent remote transactions (mail order, telesales and Internet purchases) through possession or generation of card details where either no card is held or is fabricated by the fraudster (+94%).

Losses resulting from fraudulent remote transactions using only the card details increased sharply from £29.3 million in 1999 to £56.8 million in 2000. To fight this type of fraud, the UK banking industry has made available, from April 2001, an automated address and card verification system that requires purchasers to give additional details from the actual card, thereby giving a greater certainty that the caller is in possession of the card at the time of the transaction.

While the non-cash payment market continues to grow, the prospects for the electronic purse in the UK are subject to considerable uncertainty, suggests Apacs.

On the one hand, the potential market for a coin substitute is huge; it is estimated that there were over 9 billion coin payments below £1 in value last year. On the other hand, the business case for banks to establish electronic purse schemes is currently not compelling, believes Apacs.

Opportunities to introduce the purse into the UK market are most likely to arise from partnerships between banks and smart card issuers such as local authorities and transport companies, believes Apacs.

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