Forbes reported that the EMV chip rollout in credit cards could lead to increased fraud in the U.S. In fact, Allen Friedman, director of payment services at Ingenico, told Forbes that “Sixty –seven percent of the UK-issued card fraud is from the U.S.” Therefore, said Forbes, fraud is very clearly already here.
Julie Conroy, research director for retail banking at the Boston-based Aité Group, said in her EMV report that fraud is expected to move to ATMs and e-commerce fraud – or “card-not-present.” But, according to Friedman, a U.S. delay in moving to EMV “has meant that fraudsters can use the mag stripes on European cards or fraudulent transactions at American merchants.”
Industry experts think that by October 2015, however, 70 percent of the US cards in use will have EMV chips, says Forbes.
Friedman later said that while card fraud increased in the U.S., it was never as high as in Europe – most Americans have implemented online authorization while Europeans accepted chip and PIN cards offline and then processed them at the end of the day.
“The fraud on UK-issued cards went up while their domestic fraud went way down,” Friedman said in the article. “The overall fraud went way up in UK cards because cards were being counterfeited and used in the US. A lot of counterfeit fraud is from European issuers since the fraud is migrating to the easiest target, and the easiest target now is the US.”
But to combat this rise in fraud, Conroy said that American merchants will test out a number of technologies to combat fraud, while others look to big data capabilities to better understand customer behavior. Right now, however, there is much room for improvement.
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“Many of the capabilities of the issuers are still pretty siloed,” she said. “An issuer may have one big data store for marketing and a separate one for fraud.”
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