You’ve probably noticed that most new credit card commercials show a chip card versus the traditional “dumb” credit card that has been in use since the 1960s. All over the United States, customers are getting cards with chips on them. There is going to be a learning curve with the cards, and in reality a large number of them are “chip and signature” models as opposed to the “chip and PIN” standard used in Europe and around the world.
Will your next credit card require a PIN number for payment? Surprisingly, the idea of PIN authentication on credit cards is not getting the same play as more traditional acceptance model. Certainly, there will be some glitches in the checkout line, since previously people just had to swipe a card through a reader, and now it is necessary to keep the card in the machine throughout the authorization process. There could even be an epidemic of lost cards as a result of people accidentally leaving them in the reader.
In an ideal scenario, all transactions would be secured with multiple authentication steps. A PIN number along with a card in the terminal connotes ownership better than the simple requirement of a signature, since it is still possible that someone could be using a stolen card that has not yet been reported. Even if your card is only “chip and signature,” authenticating payments means that the card has not been cloned, and is not being inserted into a reader on the other side of the country.
While retailers may enjoy a drop in fraud and chargebacks when chip cards become popular, people in e-commerce and mail order (MOTO) fields should take extra vigilance. In Europe, the rise in <a href="http://www.paymentssource.com/news/emv-migration-means-card-not-present-fraud-is-on-deck-for-issuers-3017819-1 commander cialis france.html” onclick=”_gaq.push([‘_trackEvent’, ‘outbound-article’, ‘http://www.paymentssource.com/news/emv-migration-means-card-not-present-fraud-is-on-deck-for-issuers-3017819-1.html’, ‘card not present fraud’]);” >card not present fraud following EMV adoption is expected to be mirrored in the US. Some solutions include the use of 3D Secure for authenticating e-commerce transactions, and more aggressive use of AVS authentication and double-checking of large orders. While bigger online entities may be able to weather an attack of card fraud, smaller shops could be driven into bankruptcy through chargebacks and lost merchandise, so now is the time to put security measures in place.
The popularity of EMV chip cards does not guarantee that in-store fraud will disappear. Criminals may even resort to counterfeit chip cards that appear “broken” so they can swipe the magnetic stripe in order to make a purchase in stores. The act of “friendly fraud,” whereby people charge back purchases that were legitimately made, may not stop although there should be more evidence on the side of the store when chip cards are used.
During the transition to full EMV usage, businesses and ATM owners who are using older technology need to be on the lookout. Career criminals and theft gangs are going to gravitate toward less secure systems, and this may mean that insecure companies will be seeing a higher percentage of fraudulent transactions. As a small business owner, accelerating an upgrade to EMV acceptance can work in your favor to deter fraudsters. At CPN, we have a variety of EMV-capable terminals and payment gateway solutions designed to reduce fraud and chargebacks on in-store and online purchases. By upgrading your POS systems, terminals, and shopping carts today, you can fight fraud and stand ready for the influx of customers presenting EMV cards in the checkout line.