The upcoming transition to EMV chip card deployment is promised to defend consumers and businesses from cyber attacks and fraud, but online it may cause more danger. Industry experts are expecting chargebacks to increase for card-not-present merchants (CNP), like online retailers, after the U.S. moves to EMV technology in October because hackers will shift focus to that area, as regular POS and computer hacking is made useless. A chargeback is when a customer disputes a claim on their card from your business and you absorb the cost.
There is a lot of speculation in the air as to what the transition will look like and how bad the fallout will be, but the U.S. has examples to pull from. The United States is the last major international market to see EMV chip card deployment and is also behind many countries that are not known as world leaders and have already embraced the technology.
When the U.K. switched to EMV chip cards, fraud in the retail sector was cut in half while CNP business saw fraud double. This makes many people nervous, although the U.K. adopted EMV chip cards several years ago and there have been many technological and security advancements in the payment processing industry.
Payment processing companies are partners in this process and are educating CNP merchants of the estimated risk of the upcoming EMV deployment. Merchants can see a large influx of chargebacks coming up, and it comes with its own costs. Chargeback ratios are also an important factor for consumer protection regulators who use this to gauge potential harm to people paying you through your site.
There are ways to safeguard against fraudsters trying to make purchases through your site with a fake/stolen credit card. Review security strategy with your payment processor and really get to know best practices and stay safe. You may want to use dynamic passwords for check out on your site, although adding extra steps during check out can dissuade some people from completing the purchase. Card issuers are taking precautions as well and are developing authentication strategies that can help catch and stop fraud before it happens.
October is only a month away so now is the time to talk to your payment processor about the upcoming EMV chip transition and what it can mean for your business. You may just get a piece of mind when you learn what is being done to protect your business and the integrity of purchases made on your site.
