EMV Has Greatly Reduced Retail Fraud
According to a recent analysis by Visa, merchants saw a dramatic decrease in card-present fraud due to the adoption of EMV chip cards. Merchants in the United States who have upgraded to chip technology saw a decrease of 80% in counterfeit fraud dollars in September of 2018 when compared to September of 2015. Also, total counterfeit fraud dollars went down by 48% and the number of chip cards has grown 221% since the launch in 2015.
What Makes Chip Cards So Secure?
In both their contact and contactless formats, EMV cards and mobile EMV payments are fortified with two-way authentication of the card and POS, cryptographic verification, and the dynamic code that protects each transaction.
Each EMV card is armed with a smart chip or a small computer that has its own data storage, processing power and application software. An EMV card offers better security because it contains unique keys specific to each card, therefore protecting your transactions. This code is validated by your bank for each transaction and the code can’t be re-used. A counterfeit card is useless in this scenario because it could not generate the correct unique code and the transaction would fail.
EMV cards can use either SDA or DDA, which is Static or Dynamic Data Authentication. DDA has become the industry standard because it is much more effective at reducing card fraud. Visa and Mastercard have mandated a migration to DDA on all EMV cards in Europe and Canada, and it is becoming standard in the US, too.
Benefits of Accepting Chip Cards
As a retailer, there are many reasons why you should accept EMV cards:
- Builds customer trust by reducing the fear of their data being compromised
- Improves customer experience at the POS
- Reduces counterfeit transactions
- Reduces your fraud chargeback risk
- Allows for broader acceptance of contactless and mobile payments
