What is carding and why is it important to understand?
Carding is a type of fraud in which criminals use stolen or illegally obtained bank card information to conduct unauthorized transactions. This can include purchasing goods, services, or even transferring funds, often for resale or cash conversion. Carding not only results in direct financial losses but also undermines the foundation of the digital economy—trust in payment systems. For educational purposes, it is important to understand this phenomenon to understand its impact on society, businesses, and individual users. We will examine the mechanisms of influence, statistics, examples, and possible solutions, based on current data as of September 2025.
Mechanisms of carding's influence on trust
Carding affects trust in digital payment systems on several levels: individual, corporate, and societal. Let's break it down step by step.
- Financial losses for users and businesses:
- Card holders who are victims of card fraud face unauthorized charges, which causes stress and financial difficulties. Even if the bank returns the funds (which is not always immediate), the recovery process can take weeks, fueling distrust of the system.
- For businesses (online stores, payment services), carding leads to chargebacks (refunds due to customer complaints), which include not only lost goods but also penalties from payment systems. This increases operating costs and reduces profitability.
- Educational aspect: According to reports, global losses from card fraud and related fraud exceed hundreds of billions of dollars annually. For example, in 2023, global losses from card fraud amounted to $485.6 billion, and in 2024, they are expected to increase, given the growth of online payments. This erodes trust, as users begin to perceive digital payments as risky.
- Reputational damage to payment systems and banks:
- Major carding incidents, such as data leaks, receive widespread media coverage, damaging the reputation of platforms like Visa, Mastercard, PayPal, and national systems (such as Mir in Russia). Users associate these brands with vulnerabilities.
- As a result, companies are forced to invest in advertising and PR to restore trust, but this isn't always effective. Research shows that after major incidents, trust in digital payments drops by 10-20% in the affected regions.
- Educational aspect: Trust is a key factor in technology adoption. The Technology Acceptance Model (TAM) in psychology explains that perceived usefulness and ease of use decrease when there is a fear of risk. Carding exacerbates this fear, especially among less digitally savvy groups, such as the elderly.
- Growing skepticism towards digitalisation and a regression towards cash:
- In societies where digital payments are just gaining traction (for example, in developing countries), carding slows the transition to cashless payments. People prefer cash, considering it "safe," despite the risks of theft or inflation.
- Surveys show that 41% of consumers are concerned about fraud, which influences their choice of payment methods. By 2025, according to Visa, 66% of consumers believe fraud reduces trust in digital payments, and 52% have already experienced fraud.
- Educational aspect: This creates a "domino effect." In countries with low digital literacy, such as in some regions of Africa and Asia, carding leads businesses to abandon cards and revert to cash, which increases the risk of crime (robbery, corruption).
- Regulatory pressure and rising security costs:
- Carding is forcing regulators (such as the US Federal Trade Commission or the Central Bank of Russia) to introduce strict regulations, such as PSD2 in the EU or similar ones in other countries. This includes mandatory two-factor authentication (2FA) and data tokenization.
- Companies are spending billions on improvements: AI to identify suspicious transactions, biometrics, and monitoring. However, this increases fees for users, which further undermines trust.
- Educational aspect: In 2025, the focus will be on AI and dynamic risk management: behavioral analysis and transaction history will be used instead of static checks. However, false positives cost merchants $430 billion annually, exacerbating the problem.
- Psychological and social effect:
- Constant news about hacks creates a "culture of fear" among users. This is especially noticeable on social media, where victim stories go viral, fueling distrust.
- Globally, carding contributes to "debanking"—when banks block transactions in certain sectors (such as cryptocurrency), limiting user freedom.
- Educational aspect: Research, such as that from PwC, emphasizes that accessibility, simplicity, and overcoming the trust barrier are key to the growth of digital payments. In India, for example, repeated fraud reports are eroding trust in reliable systems.
Statistics and data for 2023–2025
To make the analysis more concrete, here are the key figures:
- In 2024, losses from fraud in the US increased by 25% to $12.5 billion.
- Global losses from card-not-present (CNP) fraud (online carding) will reach $28.1 billion by 2026, growing by 40% from 2023.
- More than 151,000 cases of credit card fraud were reported in the US in the first quarter of 2025.
- 57% of financial institutions lost more than $500,000 from fraud in 2023.
- In 2025, 97% of consumers take precautions when making digital payments, but 74% expect their use to increase despite the risks.
| Year | Global losses from card fraud ($ billion) | Growth compared to the previous year (%) | Source |
|---|
| 2023 | 33,83 | 1,1 | |
| 2024 | ~35 (rating) | ~3–5 | |
| 2025 (forecast) | 12.5 (US only) | 25 | |
Case studies
- Equifax breach (2017): Affected 147 million people and caused a 15-20% drop in trust in credit systems in the US.
- In Russia: VTsIOM surveys show that 30% of users are wary of online banking due to fraud. Carding incidents are expected to increase in 2024–2025, along with the growth of e-commerce.
- Social media: On X (Twitter), users share stories of how carding is ruining businesses: "Fraud isn't just a payments problem; it's a growth problem." Or warnings about schemes in Nigeria where people use cards abroad and then report being hacked.
Positive aspects and ways to restore trust
Despite the negatives, carding stimulates innovation:
- Implementation of tokenization (replacing card data with tokens), which reduces risks.
- AI and machine learning for real-time fraud detection.
- Education: Digital literacy campaigns like Visa's help users recognize phishing.
- In the long term, this strengthens systems: 97% of consumers adapt by taking security measures.
Conclusion
Card fraud significantly undermines trust in digital payment systems, causing financial losses, reputational damage, and skepticism, which slows the digitalization of society. However, it is also a catalyst for improvements in security and regulation. Restoring trust requires concerted efforts: increased literacy, technological innovation, and transparent communication from businesses. For educational purposes, remember: awareness is the best defense against fraud. If you are a user, use 2FA, monitor transactions, and choose trusted platforms.
