Card fraud in the world reached $14 billion last year, according to The Nilson Report, with the U.S. payment card frauds accounting for more than 50% of that figure. One of the main reasons why the payment card frauds are so high in the U.S., is the lack of adoption of the EMV, or “chip card” as it’s commonly known, but this slow adoption if about to change.
EMV stands for “Europay, MasterCard and Visa.” These are the three companies which originally created the ‘Chip and PIN’ security standards. The data on an EMV card is stored on the chip. In order to access the data and approve the use of the card, the cardholder must provide their PIN. Only the cardholder should know the PIN for their card. This reduces the chances of the information being accessed and the card being used fraudulently.
After years of use and implementation in other countries, EMV is finally coming to the U.S. market. The key security advantage is that data stored in the chip card is encrypted, making it very difficult to duplicate a card for fraudulent transactions. According to the UK Cards Association, after the implementation of the EMV technology in the UK the number of fraudulent card transactions reduced by 67%. From the 1st of October 2015 the liability for card-present fraud will shift to whichever party is the least EMV-compliant in a fraudulent transaction, according to major U.S. credit card issuers – MasterCard, Visa, Discover and American Express.
Apart from the liability shift, there are other cost savings that go along with EMV acceptance. Visa, MasterCard, Discover and American Express presented programs that will waive up to 75% of the price of a merchant’s PCI-DSS annual audit. With these extra benefits and extra security layers, migrating to EMV technology seems to be an obvious step.
How to ensure a smooth transition?
For a successful implementation of the EMV technology, it’s crucial to train your employees and partners. The transaction procedures from magnetic stripe cards to chip cards are quite different and being familiar with this new technology puts the customer at ease. With the customer in mind, it’s also important to migrate as soon as possible before the EMV technology becomes popular amongst other retailers as to avoid customers questioning why they have to keep swiping their cards. And finally, ensure that your hardware is compatible with EMV technology and get a business plan together, keep in mind that with the liability shift and fraud prevention the cost saving actions from card issuers alone might get you an acceptable return of investment.
Worldnet is EMV Ready
Worldnet has been working with EMV in different European countries, where chip cards account for nearly 96.94% of total card-present transactions. Our omni-channel payment solution is EMV ready, currently serving our U.S. partners. To know more about our solutions, please contact us.
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