Under liability changes imposed by the card industry that came with the EMV rollout, merchants must now absorb fraud costs through charge backs when a card is counterfeit and the retailer does not have a certified chip card reader in operation. The National Retail Federation’s research indicated that since the implementation of EMV, retailers have been challenged with a higher-than-usual number of charge backs. Merchants, however, seem to have more liability. And the larger credit card companies are often insured against loss. “However, despite evident advantages, many business owners remain hesitant to accept smart payment cards, mostly due to flaws in the technology, which requires a much longer processing time, inadvertently risking becoming a target for criminals and putting customers’ information at risk.”Ĭonsumers and end users aren’t fully liable for losses from a compromise of their payment cards. “The rollout of smart EMV cards is finally yielding positive results, as criminals are struggling to find workable solutions to bypass the implemented security controls. “For the first time in many years, we are beginning to see levels of card fraud decreasing, providing a needed reprieve for exhausted consumers and financial organizations,” says Andrei Barysevich, Director of Eastern European Research and Analysis at digital security consulting firm Flashpoint. Not all stakeholders are fully confident in the technology as well as liability and responsibility by others in the payment card transaction chain. However, the culture of the entire transaction supply chain – from PoS consumer, to merchant, to processor, to bank and perhaps a few others in between, is not always as cohesive as it could be. They shouldn’t lock the front door but leave the back door wide open.”Īlthough incidents of fraud do seem to have increased over the past two years or so, most believe EMV cards are reason for optimism. That’s why we are pushing the banks to use all of the security the new cards are capable of providing, not just half. Retailers are determined to protect their customers. “It’s the right thing to do, and we hope the banks are listening. “What the FBI is saying is what the rest of the world already sees as common sense,” says NRF Senior Vice President and General Counsel Mallory Duncan. The FBI later retracted their statements, but continued to have backing from organizations such as the National Retail Federation. That requires a layered approach to security, including solutions like tokenization, encryption and biometrics.” Securing the payments system requires stopping fraudulent transactions wherever they may happen (in person, online, via mobile device or over the phone). When EMV cards were first rolled out a year ago, the FBI came out with a warning – much to the dismay of bankers who stood to profit from their utilization – that “Implementing EMV alone is not a panacea. Others, namely the FBI, warned from the very beginning that EMV cards were “not a panacea.” A year of run time may not be enough to notice a reduction in incidents, though some say it has already made a difference. Just as the infusion of chips and chip readers will take time, so will their effectiveness in reducing payment card fraud. “The data shows that consumer education and customer service remain a challenge for financial institutions globally, as risky behavior has a direct correlation to experiencing fraud.” "Card fraud rates are on the rise in the majority of countries included in the survey,” says Ben Knieff, senior research analyst, Aite Group. The PoS reader may complete a transaction with a personal identification number (PIN) or a signature and the transaction uses code that is unique to that particular transaction, making it less vulnerable to criminal activity, identity theft or fraud. With an EMV card, the technology on the microchip makes it more difficult for someone to steal another’s identity. This had been how cards were authenticated at PoS terminal. The magnetic strip on the back of traditional credit cards has personal information about the cardholder that is static and does not change. However, with the arrival of the Europay, MasterCard, Visa (EMV) chip technology to the United States, which was officially rolled out in October of 2015, it won’t be so easy, if possible at all, for hackers to do the damage that Seleznev pulled off and many other before him were responsible for. The risk of payment card fraud has and is real, driven by the momentum of eCommerce and its cashless consumerism, reliant on payment cards to perform so many transactions.
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