Guest Perspective: Going Beyond EMV: Breaking the Fraud Cycle

By Sam Pfanstiel, Director, Solution Architecture, Coalfire

EMV cards have been trumpeted as a means of mitigating risk in card-present transactions for retailers. But for card-not-present merchants, the trouble is just beginning.

When it comes to chip-card technology, the U.S. is a late adopter. Whether this delay has been primarily due to the disparity of processing environments, politics among banks and processors, or any number of other distractions, is a conversation for another day. Irrespective of the reason, the U.S. can still benefit from lessons learned by the others that came before. The good news—for retailers and customers alike—is that more mature EMV markets have seen a reduction in card-present fraud. The bad news is that in each of those regions there has been an increase in fraud across almost all other payment channels.

The dramatic rise in card-not-present (CNP) fraud following EMV implementation—some markets experienced upward of 300-percent growth—is staggering. The situation in the U.S. is particularly dire. The U.S. alone accounts for almost 50 percent of global fraud but only about 21 percent of global payments transactions. Issuers in the U.S. lost nearly $4 billion last year to counterfeit transactions, according to The Nilson Report .

To combat the rise in CNP fraud, we must

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