Why EMV Has Made Fraud Increase

EMV is an often used mode of payment in Europe but it is slowly making its way into the United States. EMV payments are easier for customers and are beneficial to a certain extent to firms and stores that accept it as a mode of payment. But in retail, there is more risk of fraud while using EMV.

So how safe is EMV? EMV tries to protect users’ card information, but it is not sufficient enough to prevent theft of all types. It prevents card cloning, but it still has some loop holes that make it easier for e-commerce fraud.

Different stats and same results:

In the last four quarters, online fraud has increased a tremendous 137%. This huge increase has made several consumers think twice before opting for that mode of payment. The stats show that for every $100 an estimated $7.30 has been stolen by online thieves. In the previous year’s third quarter, the affected amount was an estimated $3.10 for every $100 in retail sales. The difference is terrifying, and the increase has induced several fears, both on the consumer and dealer side. Even in last year’s fourth quarter, being the holiday season, the amount was $2.50 per $100 transaction. So this year’s online fraud numbers are very alarming.

The amounts were entirely different for digital goods. For digital goods, the majority of sales were online, where the numbers were 186% higher. The increase in online fraud does not entirely hold EMV as the reason, but fraud without chip cards is comparatively less. This is probably what EMV lacks. When the reports dig further into the stats of the fraud activity, it is found that apparel sales-related fraud dropped down by 19%. Food and beverage are second.

Where is it higher?

The most surprising detail is that the amount of fraud related to EMV is higher outside of the U.S. and is more significant in Europe. While EMV is very helpful in stopping card related fraud, it still does not cover the other tactics used in transaction theft. That is something that EMV has to catch up with.

Using signature authentication must be replaced with using mobile phone authentication solely. There are different methods of authentication that can be used to prevent theft. If designed correctly, EMV can be the safest method of transactions for consumers considering the fact that it is capable of completely eliminating card related fraud.


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