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Credit cards may dominate online use, but debit cards make up a hefty share, too, with 54% of U.S. adults using the former and 49% choosing a debit card in a 30-day period, according to a YouGov.com report. That online debit use has emerged as a key area for banks to focus on fraud-mitigation efforts in the fourth quarter, finds the Online Banker Scorecard from Keynova Group.
Persistent fraud is causing banks to do more to boost online debit card measures, the report finds. They are doing this by providing customers with debit card alerts and controls for their cards. Of the 18 retail banks in the scorecard, 66% offer opt-in alerts for card-not-present purchases, Keynova says. And 50% provide alerts for transactions exceeding a customer-set maximum threshold. Twenty-five percent also enable customers to set limits or block specific types of transactions, such as card-not-present or foreign transactions, and set up daily or per-transaction limits on card purchases.
Keynova says more than half of the banks in the report provide educational information and guidance for elderly customers to help prevent financial scams. Ninety percent offer alerts that can be shared with a trusted third party, such as a caretaker or family member.
Meanwhile, Featurespace, which Visa Inc. acquired in December 2024, says 77% of U.S. banks point to preventing check fraud as a larger priority in 2025.
“Check fraud may be old-school, but fraudsters are giving it a modern twist. With the holiday season approaching, banks must be proactive. AI is the frontline [defense] for many banks and financial institutions. Those that delay risk falling behind in protecting their customers,” Jason Blackhurst, Visa senior vice president and head of Featurespace and Acceptance Risk Solutions, says in a statement.
The latest Federal Reserve Payments Study, released in March but based on 2021 data, shows check use declining from 13.6 billion paid in 2018 to 11.1 billion in 2021.
The Featurespace survey, which solicited opinions from 2,000 U.S. adults and 500 financial institutions executives in late August through early September, also finds that 67% said check fraud is one of the hardest fraud types to detect and prevent. Sixty-six percent experienced an increase in check fraud over the previous 12 months.
Among consumers, 68% believe there is an increase in check-fraud attempts around the holiday periods. Many consumers, 77%, say their financial institutions need to do more to protect them from check fraud.
“Despite the fact that check volumes are reducing, fraud is increasing with greater sophistication and criminal organization so banks and other U.S. financial institutions are already stepping up consumer protections, with eight in ten (80%) increasing investment to tackle check fraud,” Featurespace says.
