Is EMV really solving the fraud problem?

Is EMV solving the fraud problem?

Short answer: No.

But, to be fair, EMV is not designed to solve the entire fraud problem — rather, it addresses one piece of the puzzle, namely counterfeit card fraud. While the U.S. conversion to EMV is not yet complete, Mercator Advisory Group is tracking its progress:

  • 84 percent of U.S. general purpose credit cards will have EMV chips by the end of 2016.
  • 3 in 5 American adults now own at least one EMV chip card.
  • EMV card conversion is projected to be complete by the end of 2018.
  • Nearly 50 percent of in-store credit card transactions will be “chip on chip” this year.

While more and more cardholders are using EMV at the point of sale, merchant adoption is still spotty. “Delays in the certification and activation of merchants’ point-of-sale terminals has introduced a significant lag between the distribution of EMV-capable terminals and the enablement of those terminals,” says the Mercator report “EMV in 2016: Breaking through the Bottleneck.” This state of affairs has consumers and merchants frustrated, even as EMV moves forward.

Other Types of Fraud Surge

Meanwhile, other types of fraud seem to be having a heyday. FICO reports that ATM skimming rose 546 percent between 2014 and 2015 – in large measure because EMV at the ATM has been slower to roll out.

continue reading »