According to a recent Nilson Report, the United States accounts for a disproportionately high amount of the world's credit and debit card fraud. The United States is responsible for 27 percent of the world's credit and debit transactions, but is subject to 47 percent of the world's credit and debit card fraud. Small businesses are often the victims of this fraud. The United States lost over $3 billion last year to payment card fraud, which includes general purpose credit cards, signature cards and PIN payment cards.

David Robertson, who published the Nilson Report, cites two main reasons for the high amount of fraud in the United States. One is that U.S. banks haven't adopted newer technology that's available such as EMV chip cards which could protect consumers from fraud, and U.S. credit card issuers are less likely to decline questionable credit authorizations. The competition among the said issuers in the U.S. is stiff, so if a card is declined, the cardholder will simply use a competitor's card instead. The average American consumer has four credit cards to choose from.

Small businesses are particularly vulnerable to fraud. They are often targeted because identity and data thieves assume they have less security. Small business may not have the controls in place to catch this type of theft quickly, especially if the theft is by one of the business' employees. According to a 2010 report from the Association of Fraud Examiners, business organizations typically lose five percent of annual revenue to fraud, and fraud typically goes on for 18 months before it's discovered. For small businesses with limited revenue, even losing five percent can be devastating.

Small businesses can protect themselves from fraud by maintaining Payment Card Industry Data Security Standards, or PCI DSS. PCI DSS is a set of requirements put forth by the five major payment card brands. Meeting these requirements ensures credit and debit card transactions are conducted in a secure environment. No laws currently require PCI compliance, but businesses, especially small ones, should strongly consider maintaining compliance. If there is a data or identity breach, businesses can face fines, audits, revenue and a significant amount of damage to their reputation. Winning back a client's trust after a security breach can be difficult and costly. Businesses need to accept credit cards, and it's better to be overly cautious when it comes to protecting your customers from credit card fraud.