*Updated for 2021*Accepting EMV is now a necessity within payment processing in 2021. Before COVID, EMV was building momentum as a way for consumers to pay. Once people did not want to touch devices or other people, this became front and center. Going forward, all businesses will need to be able to take EMV and NFC payments. There are plenty of ways to do this, learn more.
EMV capability first came out in 2014. At that time, there was a concern of fraud spike with new technology. Over the last 7 years, security has caught up and now consumers and business owners are very comfortable with this type of payment.
The United States has recently undertaken the task of updating its antiquated magnetic strip technology with EMV chips, like those used in Europe and throughout most of the world. However, this attempt to beef up credit card security has actually led to credit card fraud spikes across the board. The increase in credit cards is affecting Americans as well as Europeans in the U.S.
With the U.S. being the only G20 country that has not yet transitioned to the EMV system, industry insiders have revealed that approximately 60 percent of fraud on UK-issued cards comes from the United States and many credit card issuers are declining purchases made in the U.S. on European cards because it is deemed as too risky. Experts believe that the credit card fraud spikes of UK-issued cards in the U.S. is because fraudsters have migrated their efforts to the easiest target – and right now that’s here.
This is believed to have an effect on tourism revenues in the United States. Brazil experienced the same problem but saw an increase of 27 percent in approval of foreign cards.
The transition to EMV chip is believed to be a near-cure all. Experts believe that by October 2015, nearly 70 percent of American credit and debit cards will have EMV chips, which is also when merchants assume the responsibility of card losses on cards with magnetic strips.
The ambiguity of the early stages of the transition is sure to create a hotbed of credit card fraud spikes. This is a time when kinks will be worked out of the system and fraud assessment will be a challenge initially. Experts also believe that fraud is likely to shift to “card-not-present” schemes (e-commerce sites, ATMs, etc.).
There are some benefits to the U.S.’s current transition. The fraud securities currently in place will continue to serve as protection and the United States can learn a lot from the transitions undertaken by other nations. The U.S. transition is also slated to last less than two years while other nations took five to 10 years.