Countries that have already adopted EMV have experienced a significant increase in online fraud following the migration, and the U.S. is not expected to be an exception. In fact, online fraud increased 21% in Europe in 2012, in part due to the introduction of EMV cards.
ThreatMetrix says in 2014, U.S. retailers lost about $32 billion to fraud, up from $23 billion just a year earlier – much of it due to the weak security of credit and debit cards. In six months, U.S. merchants and credit card networks will follow in the footsteps of many other countries globally and abandon all technology associated with antiquated magnetic stripe credit and debit cards. With the current magnetic stripe technology, hackers can skim card numbers and security codes in order to use stolen credit cards, which EMV chip card technology will prevent.
The adoption of EMV will make it more difficult for cybercriminals to copy account numbers, security codes and magnetic stripes associated with those cards.
Following the October deadline, retailers still supporting magnetic stripe card technology will be liable for any resulting fraud losses. While merchants will be held liable for any in-store fraud, the increase in online fraud can also create liability issues for banks- specifically as cybercriminals turn their attention to applying for new EMV chip credit cards online with stolen information. To combat the expected growth in fraudulent account creation online, banks will also need to increase security.
With the shift to EMV, banks must also prioritize mobile security. Across mobile and Web, 30% of banks’ customer acquisition happens from some kind of mobile device. This trend is continuing to grow, which creates even more of a challenge for financial institutions, as the mobile channel is easily compromised by cybercriminals.
ThreatMetrix Global Trust Intelligence Network, which analyzes more than one billion monthly transactions and protects more than 250 million active user accounts across 3,000 customers and 15,000 websites and mobile applications.
For data, background and forecasts on the U.S. EMV Migration: Search CardWeb.com’s CardFlash® Library of more than 58,000 archived articles; Access CardWeb.com’s CardData® for current and historical Performance, Portfolios, Profiles, etc. Visit RAM Research® (ramresearch.com) for quarterly and annual forecasts covering more than 150 payments metrics. [complimentary or deeply discounted access to CardWeb.com subscribers].
Additional database resources include CardWeb.com’s CardExecs® – comings & goings of payments movers & shakers; CardWeb.com’s CardWatch® – ears & eyes on marketing globally (57K items); and CardWeb.com’s CardPixes® – form & function of card design (7K items).