Monday, November 19, 2018
The new NRF-Forrester report, titled State of Retail Payments, identified fraud as the top payment-related challenge facing retailers, cited by 55 percent of those surveyed for the report. Other top payment-related challenges include: cost of card acceptance (cited by 49 percent) and chargebacks (35 percent).
"In a post-EMV world, fraud is shifting from in-person to ecommerce channels, so retailers have been busy bolstering their defenses to mitigate the increasing costs and risks of ecommerce fraud," the report noted. And it points to a Forrester survey indicating ecommerce fraud grew 13 percent last year. Separately, a recent Federal Reserve Board analysis of payments fraud revealed that ecommerce card fraud rose by more than 35 percent following EMV implementation, from $3.4 billion in 2015 to $4.6 billion in 2016.
The EMV security protocol requires credit and debit card issuers to issue cards with account and cardholder information contained on embedded EMV chips that can be read by merchant POS devices. Most U.S. merchants were encouraged to have EMV terminals in place by October 2015. (Gas stations were given until 2020.) Under Visa and Mastercard rules, not using EMV-compliant POS devices renders a retailer liable for any associated fraud that occurs.
According to Visa, 59 percent of card-accepting merchants in the United States were using EMV-compliant terminals as of December 2017. The NRF said its data suggests even broader implementation of chip-reading terminals: 99 percent of midsize and large retailers and 81 percent of small retailers as of year-end 2017.
To help better combat fraud, the NRF-Forrester report stated, retailers want better cardholder authentication procedures for both in-person and CNP purchases. Fifty-one percent of those surveyed said biometrics would be the best way to verify transactions; 53 percent expressed interest in implementing specific biometrics techniques, such as fingerprints and facial recognition security features that are available with most newer smartphone models.
Asked about more widely available authentication techniques, personal identification numbers was the top choice of retailers surveyed, according to the NRF-Forrester report. Ninety-five percent said requiring PINs would improve the security of card transactions; 92 percent said they would implement PIN authentication if it were available. While PIN authentication is common in most other countries that have moved to EMV cards, there are no PIN requirements for EMV-secured credit cards in the United States.
"Eliminating fraud and improving authentication are clearly top priorities for retailers," said Brendan Miller, principal analyst at Forrester. "As the answers to these challenges are found, the key will be finding ways to implement the solutions in a way that provides a frictionless experience for consumers."
Editor's Note:
The Green Sheet Inc. is now a proud affiliate of Bankcard Life, a premier community that provides industry-leading training and resources for payment professionals. Click here for more information.
Notice to readers: These are archived articles. Contact names or information may be out of date. We regret any inconvenience.
