Page 66 - Pay Magazine s2014

finance & strategy
EMV: The Ripple Effect of Fraud
ViewpoinT
By Julie Conroy, Aite Group
In Viewpoints, payments professionals share their perspectives on the industry. Paybefore presents many points of view to o er readers new insights and information. The opinions expressed in Viewpoints are not necessarily those of Paybefore.
As the U.S. steadily implements EMV, fraud continues to increase rapidly, especially account takeover, card-not-present and application fraud.
The U.S. nally has joined the rest of the G20 coun- tries in upgrading to the EMV standard, though the path certainly has been a rocky one. With the largest and most fragmented card market and no government support in the edu- cation process, the U.S. transition promised to be challenging from the outset.
The Durbin Amendment further complicated matters with its debit- routing provisions, delaying the debit upgrade for many merchants and nancial institutions because it took the industry more than a year to come up with a technical Durbin-compliant solution. As a result of this, as well as bottle- necks in the certi cation process,
many merchants have not yet completed their reterminalization process—an average of only 20 percent of credit card transactions and 10 percent of debit trans- actions were chip-on-chip at
the end of March.
While EMV gradually works its way into the fabric of U.S. payments, nancial fraud continues to in- crease rapidly. Account takeover, card-not-present (CNP) fraud and application fraud all are rapidly rising, fueled by a bevy of data breaches that has given criminals vast stores of consumer data.
In 2015, criminals compromised more than 477 million records containing online credentials, personally identi able informa- tion (PII) and stolen card data.1
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