For years, the payments industry prepared for the shift to EMV chip cards. Issuers promised the new technology would be safer, merchants got ready for big changes, and consumers hoped for the best. The big question was: Would EMV technology really help with the growing number of fraud cases?
The answer appears to be, yes. EMV chip cards continued to gain share of U.S. card payments in the early months of 2019. It’s true that the mission to shift to EMV is not complete – even three years after the payment card networks’ EMV liability shift – but counterfeit fraud is dropping sharply.
According to Visa, 3.5 million U.S. merchant locations accepted EMV chip cards as of March. That is an increase of about 400,000 locations from 3.1 million in December 2018. In addition, chip-based Visa payment volume totaled $81 billion in March on 1.94 billion transactions. Visa also said that some 99 percent of March’s volume came from chip cards (up incrementally from 98 percent in December).
The Advantages of EMV
EMV chip cards are a strong antidote to counterfeit fraud at the point of sale. Before, magnetic-stripe cards offered little protection. According to Visa, counterfeit fraud dollar volume at merchants – that have successfully completed their upgrades – was down by 76 percent as of December from the numbers experienced in September 2015; this was just one month before the EMV liability shift took effect. Visa also reported that counterfeit fraud for all merchant was down 49 percent.
How does EMV Affect Merchants?
But how does the shift affect merchants? The liability shifts kicked the financial responsibility for counterfeit fraud from a transaction onto merchants themselves, if their POS terminals are not updated to handle EMV card’s chip. As of last year, as many as one-third of small retailers are not using chip-reading credit and debit card machines. Some merchants find the shift to be incredibly expensive, while others are still unaware or unsure of what the shift really means for them.
While EMV has been highly effective in reducing counterfeit fraud, fraudsters are now turning their attention elsewhere (card-not-present channels and identity fraud). If you need help protecting your business from future fraud attempts and keeping customers’ information safe, consider what chargeback insurance from a provider like eMerchantBroker can do for you.
Author Bio: Electronic payments expert Blair Thomas is the co-founder of high risk payment processing company eMerchantBroker. He’s just as passionate about his business as he is with traveling and spending time with his dog Cooper.