European regulators have warned that while strong customer authentication has proved effective in reducing payment fraud, criminals are rapidly adapting their methods, driving overall losses higher across the EEA.
The European Banking Authority and the European Central Bank have published the 2025 edition of their joint report on payment fraud, analysing semi-annual industry data from 2022 to 2024. The findings confirm that the mandatory introduction of strong customer authentication (SCA) in 2020 has had a measurable impact on limiting fraud, particularly for card payments. However, the report also underlines the need for payment service providers to continuously adapt security controls as fraud typologies evolve.
According to the data, total reported payment fraud across the EEA reached €3.4bn in 2022, rose to €3.5bn in 2023, and climbed sharply to €4.2bn in 2024. The report examines both the value and volume of fraudulent transactions relative to overall payment activity, offering insight into how fraud risks differ by payment instrument and geography.
Card payments authenticated with SCA were found to be significantly less susceptible to fraud than those without it. The contrast was particularly stark for cross-border transactions, with card payment fraud recorded at 17 times higher when the payment recipient was located outside the EEA, where SCA is not legally required and is often not applied. For other payment types, including credit transfers, the protective effect of SCA was less consistent.
The analysis also highlights a shift in fraud tactics. New forms of fraud increasingly exploit SCA exemptions or rely on social engineering, manipulating legitimate users into authorising fraudulent transactions themselves. These scams have had a pronounced impact on credit transfers, where users bore around 85% of total fraud losses in 2024.
Losses varied significantly by payment instrument. In 2024, fraud linked to credit transfers totalled €2.200bn, representing a year-on-year increase of 16%. Card payment fraud involving EU- or EEA-issued cards reached €1.329bn, up 29% compared with the previous year. The report also notes marked differences in fraud levels across individual EEA countries.
The data is collected under the legal framework of the revised EU Payment Services Directive, which requires payment service providers to report fraud statistics to national authorities. The EBA and the ECB confirmed they will continue publishing this data to support supervisory action and inform future policy decisions aimed at combating payment fraud more effectively.
Copyright © 2025 RegTech Analyst
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