TMG White Paper explores current and predicted state of card-not-present fraud

DES MOINES, IOWA (April 24, 2014) — Payments processor The Members Group (TMG) released the final in a series of four fraud-themed white papers today. The topic of this paper, written for financial institution (FI) leaders, is the rise of digital transaction fraud and how new technologies may soon help.

Co-authored by TMG’s Senior Fraud Prevention Analyst Nicole Reyes and Senior Product Manager Brandon Kuehl, the paper explores the current state of card-not-present (CNP) fraud and the predicted increase that the EMV standard is expected to bring to the U.S. CNP fraud picture.

The authors point out the risk such fraud poses to card issuers. “For many years, issuers were somewhat able to shrug their shoulders when it came to CNP fraud,” write the authors. “That’s because most losses from fraudulent e-commerce transactions could be charged back to the merchant. Today, however, with increased merchant enrollment in 3D Secure protocol programs, such as Verified by Visa and MasterCard Secure Code, CNP chargebacks have been virtually wiped out.”

New methods for CNP-transaction authorization, which may be the answer to stemming the CNP-fraud tide, are also addressed in the paper.

In TMG’s view, the use of payment tokens, or tokenization as it’s commonly called, offers the greatest potential to slow the growth of CNP fraud in the U.S.,” write the authors. “That’s because the process replaces all of that coveted card account data with a single, secure token. The token has zero value for a fraudster because it would have to be decrypted, and the only entities capable of doing so are the major card networks.”

The paper concludes with information on what issuers can do today to mitigate the losses related to CNP fraud. To download the white paper, “What Card Issuers Need to Know about Card-Not-Present Fraud,” visit

About TMG

The Members Group (TMG) is dedicated to creating customized, technology-driven card processing and payment solutions for credit unions and community-based financial institutions across North America. Innovations in fraud management, loyalty programs, alternative payment systems and analytic reporting, and the competitive advantages they create, have helped TMG forge a new standard in offering cutting-edge credit, debit, ATM, prepaid card products and a P2P payment solution. For more information, visit


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