April 25, 2017
The migration to the EMV standard for payment cards in the U.S., which has been one of the major drivers of CNP fraud globally over the last two years, is gaining momentum, according to the largest card network in the world. On Friday, Visa released data reporting its cardholders made more than 1 billion transactions using chip cards in March, nearly three times as many compared to March 2016.
Merchants that accept card-not-present payments have been bracing for a rise in CNP fraud since the major card networks announced their EMV road maps in the U.S. a half decade ago. Virtually every market that made the switch to EMV to curtail in-store counterfeit fraud experienced a subsequent surge in CNP fraud as criminals migrated to their easiest option. While a growing number of e-commerce transactions and an ocean of available stolen data helped fraudsters’ cause, the numbers have generally borne out the industry’s expectation about EMV: CNP fraud is on the rise.
And, if Visa’s data is any indication, it will continue to get worse as the shift to chip cards in the U.S. accelerates. In the year ending March 2017, the number of Visa chip debit and credit cards rose 164 percent to 421 million. The number of merchant locations capable of accepting them also has doubled from 1 to 2 million in that time. Surprisingly to some, small businesses accounted for 75 percent of that growth—a response to the immediate surge in chargebacks that hit after the liability shift in late 2015.
Counterfeit fraud was reduced in physical locations by 58 percent, Visa said—exactly the aim of the program. Now it is left to e-commerce and other CNP businesses to deal with the inevitable rise in CNP fraud headed their way.
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