CNP Expo: EMV Liability Shift is Looming

May 21, 2014

CNP Expo: EMV Liability Shift is Looming In two years, U.S. consumers will be using credit cards with electronic chips in them, which will prevent criminals from creating fake credit cards. However, businesses are beginning to get the message that criminals will begin using card-not-present scams and cross-border fraud to steal. Experts also are trying to predict other unknown methods of fraud that will evolve once counterfeiting cards becomes too difficult.

“It’s kind of a great unknown,” said Dan Kramer, senior vice president of marketing and merchant services at EFT network Shazam, at a Tuesday afternoon panel on what happens to CNP fraud after the 2015 liability shift. “There really isn’t a catch-all to eliminate fraud.”

Large companies have worked hard to install new anti-fraud procedures. However, some smaller businesses have not kept pace with the improvements, which will be required in two years or they will face liability for losses.

“Some of the smaller businesses aren’t aware of the tsunami that’s going to hit them,” said Paul Tomasofsky, president of the Secure Remote Payment Council. “I think there’s going to be some pain on its way.”

Merchants should prepare to hold off more sophisticated cyberattacks, panelists agreed. They’ll need a rules engine to trigger manual reviews or require a fingerprint scan to make sure the order is secure. Manual reviews will need to be used when transactions are suspicious. And, merchants should be prepared to handle data breaches, which will be costly and virtually impossible to prevent.

Moderator Catherine Johnston of ACT Canada said fraudsters will attack the least protected.

“You can’t afford to be the last man,” she said.