With 2016 behind us, Visa announced statistics for the first full year that chip technology has been in use in the U.S. Much can be gleaned from the data, including the fact that almost half of in-store transactions used EMV in 2016, and most of those were not from the big box stores, but rather, from small and mid-sized businesses. From all the information, however, this is certain: While chip technology has impressively cut card present fraud, eCommerce has become the newest target for attackers.
Over the course of the year, the number of merchants using chip-enabled terminals more than doubled, with 39 percent (or 1.81 million) of all merchant locations using EMV technology. The majority of these merchants - 82 percent of them - were small and medium-sized businesses. Chip transactions comprised just about half (49 percent) of total payment volume in card present transactions.
Visa's results show that counterfeit fraud declined 52 percent at chip-enabled merchants and 14 percent across all merchants for face-to-face transactions. So even the merchants who have not upgraded their POS systems to accept chip cards saw a decline in fraudulent activity.
As predicted, chip technology is helping defeat card fraud attacks for in-store commerce. However, the prediction that Card Not Present fraud would rise is unfortunately ringing true as well. According to a report on NBC News this week, identity theft in the form of credit card fraud online is spiking, with 2016 seeing a 40 percent jump in Card Not Present fraud. Account Takeover Fraud, where a criminal opens numerous credit card accounts using stolen identities, is up an alarming 61 percent.
With the release of this information, and the American consumer becoming more comfortable with chip technology, the demand for more businesses to implement EMV-ready machines will also rise. As cardholders become more aware of the security advantages chip technology brings, and card issuers continue to roll out chip enabled cards, the pressure will be on the merchant to upgrade their POS systems as not only a means to protect themselves from fraud and chargebacks, but to meet consumer demand. For merchants who have eCommerce sites or primarily process payments over the phone, it is imperative they remain vigilant and on high alert for fraudulent activity, and look to emerging technologies, such as Solupay's 3D Secure Advanced, to safeguard their businesses.