EMV Online Fraud

evm-online-fraud

What Can Merchants Do to Stop Fraud?

EMV (chip-and-PIN) credit cards were introduced to combat credit card fraud. Since their widespread adoption in the US, some merchants have noticed a decrease in fraud. Yet others report an increase – why is that? The introduction of EMV cards has led to a rise in online retail credit card scams. Read on to learn why this is happening and what retailers can do about it.

Out with the Old, In with the Scamming

EMV cards prevent credit card-related crime. The microchip and PIN technology they rely upon makes transactions safer.

In comparison, magnetic swipe cards are notoriously insecure. When you purchase something with that type of credit card, the information that travels from the cash register to the bank isn’t encrypted. Encryption turns data into an unbreakable code. EMV cards are encrypted.

From criminals’ perspectives, the advantages of magnetic swipe cards are obvious. And as credit card companies move towards replacing magnetic swipe cards with EMV cards, fraudsters are frantically trying to exploit the remaining stock of these less secure cards.

Where Is Fraud Taking Place?

There’s a specific place in which magnetic card swipe credit card fraud is taking place: online.

Criminals use two methods to commit online credit card fraud. The first involves opening an account in someone else’s name with credentials stolen during a hack (such as during the Anthem data breach). In the second method, hackers log into accounts with stolen information and then proceed to run up huge tabs.

Are EMV Cards Leading to Online Retail Fraud?

While online fraud is very common, especially as criminals feel the pressure to get the most out of magnetic swipe cards before everyone switches over the EMV, there are still steps merchants can take to lower their risk.

Steps for Merchants Uncovering Fraud?

For a start, retailers need to put newer technologies in place that would prevent fraud. Older systems evaluate transactions based on risk and require someone to manually assess whether a customer is using a legitimate credit card. Newer fraud protection systems work in real time and don’t require someone to assess a threat.

Another important step is to adopt EMV credit card processing technology if you haven’t done so already. And if you have done so, make sure that you ask your customers for their PIN at the end of the transaction. This step will ensure that the card is real and that the customer is making a legitimate purchase.

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