EMV And CNP Fraud: Fool Us Twice, Shame On Us

By Matt Pillar, senior executive editor, Innovative Retail Technologies

As the U.S. retail industry tools up for the EMV (Europay, MasterCard, and Visa) chip card security standard this year, there’s a lot of speculation about the impact the new POS security standard will have on CNP (card-not-present) fraud.

Many fear that the resources associated with securing the POS via EMV will equate to plugging one leak in a severely compromised dam. In sealing up the physical payments environment, pressure will build on innovative fraudsters to find a new crack in the concrete, much like water behind a barrier seeks the path of least resistance to freedom.  This fear is merited by observation of the countries that have already traveled the path to EMV:

• The Canadian Banker’s Association reports that EMV migration resulted in a 54 percent decline in counterfeit and lost/stolen card fraud from the beginning of Canada’s EMV migration in 2008 through 2013. Meanwhile, CNP fraud in Canada spiked 133 percent during the same time period.
• In the U.K., card-present fraud has dropped 80 percent since implementing EMV, while CNP fraud spiked 79 percent between 2005 and 2008, directly on the heels of the liability shift there.

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