Independent Banker - September 2020 - 21

ICBA Bancard Protects
Community Banks
from Fraud Losses
For more than two decades, ICBA Bancard
has offered a proven fraud tool.
The History of Debit Cards...
and ICBA Bancard
Debit cards were brought to market in the mid-1970s
as an alternative to writing checks and carrying cash.
In the beginning, debit cards were issued sparingly to reliable, long-term
customers because there was a clearing period similar to checks. Remember
the old imprinter machines with duplicate sales slips?
By the mid-1980s, ATMs began to populate the landscape and the first
nationwide debit network was created. This critical development enabled
issuing banks to connect to merchants and debit customers' accounts directly.
An additional benefit was electronic settlement, making it cheaper
for banks to process debit card transactions than to process checks.
As the use of debit cards continued to gain popularity, ICBA Bancard
leadership explored how they could create a program that would help
community banks compete in this burgeoning space, eventually launching
a debit card program in 1995. In the first five years of its new debit card
program, ICBA Bancard helped nearly 350 community banks establish
competitive debit products. Additionally, Bancard helped banks create
EFT relationships with multiple networks, processors, and ATM drivers.
Today, debit cards are a demand deposit staple and nearly all banks offer
the cards. Even though there are various ways to perform a noncash payment,
debit card usage continues to grow. According the 2019 Federal
Reserve Payments study, the number of debit card transactions grew by
8.4 percent from 2015 to 2018. In 2018 alone, there were 86.4 billion
debit card transactions totaling $3.10 trillion in sales volume.
ICBA Bancard is now the 11th largest debit card issuer by purchase volume
in the U.S. (representing all our debit sponsored banks collectively)* and
continues to pave the way for community banks to adopt the services and
tools to meet modern payments needs.
*According to the Nilson Report, February 2020
By Rebecca Kruse, executive vice president of operations at ICBA Bancard.
3RD QUARTER 2020 | PAGE 7
The Fraud Loss Protection Plan (FLPP) is as an exclusive
client benefit to help banks recover and mitigate credit
and debit card-related fraud losses. Launched in 1991,
this unique program quickly became a niche offering in
the card industry.
Originally the program only covered losses related to
lost/stolen cards, card not received in the mail (NRI),
and MOTO (mail order/telephone order) fraud. Since
then, it has evolved with the market and the needs of
community banks and now covers losses stemming from
account takeover card loss (including identity theft, phishing,
pharming, and vishing) and e-commerce fraud. It
also includes free access to 3D Secure card-not-present
authentication services, which detects eCommerce fraud
before it happens.
The 3D Secure service saved ICBA Bancard's Fraud Loss
Protection Plan participants just over $5.2 million in
confirmed and suspected eCommerce fraud in 2019; an
average total savings of 68.8 percent of total eCommerce
volume for FLPP participants during the same period.
And with the onset of COVID-19, ICBA Bancard continues
to review existing protection services and potential
FLPP changes that may further benefit clients experiencing
elevated card losses and related challenges.
By Danielle Washington, fraud claims coordinator at ICBA
Bancard.
Independent Banker - September 2020

Table of Contents for the Digital Edition of Independent Banker - September 2020
