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Education

Credit cards surging in 2019 – fraud too

take on the burden of spending money monthly to protect
themselves as best they can – and it may not be enough.

Some merchants are hiring security experts, buying
software and contracting with companies to monitor
transaction statuses. Banks are constantly replacing credit
cards, which places a drag on their economic activity. I
think we can all agree that our adopted EMV solution
just isn't cutting it. It helps with in-person fraud, but to be
completely transparent, we did not have a ton of in-person
fraud.
Dispense with illusions about EMV

The "EMV shift" was instituted purely to shift liability to
the merchants. Signatures are not required with EMV, but
it seems every other merchant is still capturing signatures
regardless of the dollar amount of transactions anyway.
Per Visa back on April 14, 2018, EMV enabled merchants
in the United States and Canada to opt to stop capturing
By Nicholas P. Cucci signatures as a method of cardholder verification. Those
Fluid Pay LLC merchants are also no longer required to retain store
transaction receipts.
et's state the obvious. The economy is booming
and people are spending more money. Here's a The whole point of EMV is that the chip is specific to the user,
crazy statistic from The Washington Post: only 5 so a signature won't do much; when that card is placed in
L percent of individuals use no credit or debit cards the reader, it is authenticating you are the cardholder. If you
in 2019. To put this in perspective, the figure in 2001 was 22 have ever had to do a chargeback or been a victim of fraud
percent; in 2002 it was 17 percent. We are now at 5 percent! with an EMV card, you will quickly find that the bank will
Also, according to FICO, credit card use is most prevalent send you a letter for signature stating that the card is and
among 25- to 34-year-olds, at 83 percent. was in your possession at the time the transaction occurred.
This makes sense because the liability shift changes back to
With more credit cards than ever out in the wild, credit card the merchant at the end of the day.
fraud is also booming. Card-not-present (CNP) fraud has
grown exponentially in the United States. According to a Typically, liability will shift to whoever has the lowest
2018 study by the Federal Reserve, CNP fraud rose to $4.57 level of security, which 99 percent of the time will be the
billion in 2016, up 34 percent from the 2015's $3.4 billion. merchant unless the merchant service provider (MSP)
Analysts expect CNP fraud could break $6 billion in 2019. can step up to the plate and help the merchant combat
Face the facts "unauthorized" transactions.
Take simple, effective actions
There really isn't a way to hide from this. Pretty much
everyone at one point or another will use their credit card Here are several simple steps merchant level salespeople,
at a location that exposes them to fraud. For example, if ISOs and MSPs can take to protect their merchants:
you've swiped your card at a gas station with a hidden
skimmer, your information is compromised. Purchased • Check to see the extent of your merchants' PCI DSS
something online at a breached website? Have malware on validation requirements.
your device? Compromised.
• Help merchants obtain full PCI compliance (example:
If that's not enough to concern you, consider this: Markus complete Self-Assessment Questionnaires).
Bergthaler, director of programs at Merchant Risk Council,
a nonprofit organization that educates businesses on how • Walk merchants through how terminals/devices can
to combat fraud, said, "Recent figures suggest that over 80 be tampered with and what exactly to look for. En-
percent of credit cards in people's wallets have already been courage use of devices that are hardened – devices
compromised." There is a cost specific to CNP fraud that that are cloud-based and can only be triggered from
goes beyond the millions and even billions of dollars lost an application in order to process a card, for example.
in merchant merchandise. Small businesses are having to Tampering with these devices is nearly impossible
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