The October anniversary of the liability shift has passed, and anniversaries are an excellent time to look back on progress…this is no exception. The U.S. EMV migration plan was set four years ago as a way to fight card fraud and to protect both consumers and merchants.
Back in the day, we had one choice when we wanted to purchase something, and that was cold, hard cash. However, a few decades ago, people began using credit cards for everyday purchases instead of for only big ticket items, such as refrigerators. Though this was certainly convenient, it also opened the door for the bad guys to not only access your credit card information, they could use this information to make purchases and even to learn more about you and steal your identity. Over the past couple of years, once again, we in the U.S. are changing things up when it comes to how we use credit and debit cards. Our new cards, the ‘chip cards,’ as in use in most other places in the world, are making it safer than ever before to make purchases.
Love ‘em or hate ‘em, these new chip cards and terminals are working to eliminate card fraud, and they are working very well. The way we pay in the U.S. needed a huge overhaul, and this security upgrade was an attempt to make things safer. Data and research confirms that this new technology has had a great impact on reducing card fraud.
Don’t get me wrong. This transformation has not been without a few headaches for merchants and consumers but believe me…things are improving, and they will continue to improve as businesses complete their shift to the chip. How much? Mastercard fraud data indicates that there was a 54 percent decrease associated with counterfeit fraud when comparing data from April 2016 to April 2015.
We Have a Strong Start, But There is Still Work to be Done
When considering everything, the U.S. is off to a solid start, but we still have work to do. When looking at the more than 150 world markets that use chips in cards, we know that more chip transactions must be done before we can see a significant drop in fraud. To do this, we will need about 60 percent of chip terminals interacting with a minimum of 60 percent of chip cards in market. If you have one or have seen chip cards, you likely know that we have gone well beyond that 60 percent mark on cards, but only about 30 percent of store terminals are set up to accept chips.
Another thing that we need to do is continue to speed up the certification process for merchants. The faster we can get chip terminals in stores, the faster we will see these card fraud levels drop.
We also need to increase the speed of which these transactions occur. If you have used a chip terminal, you know that it feels like a slower process than the ‘swipe’ we are used to. The payments industry is hard at work to address this issue, and new technologies are being created to speed up transaction times when using these payment methods. Remember, even though the process feels a bit slower right now, you are significantly safer when using a chip card.
Ultimately, if we can have a little bit of patience with the process and endure these short-term issues, we will all greatly benefit when it comes to payment security. We are already moving in the right direction, and if we keep adding terminals and encouraging the use of chip cards, we will definitely see even more improvement when we compare with next year. Before you know it, most forms of card fraud will be all but gone thanks to the switch to the chip.