Converting the US card system to the global EMV standard involved re-carding almost a billion credit and debit cards, and upgrading more than 4 million point of sale acceptance devices. U.S. issuers resisted the standard for decades, falling back on the strengths of their predictive scoring; merchants pushed back because of implementation costs. Two years after implentation, the transition is stablized and according to Visa, there are specific, measurable results.
Since the use of EMV chips was incentivized by the liability shift two years ago, this type of fraud has fallen dramatically.
At first glance, the results are promising.
Merchants that completed the chip upgrade have seen a drop of 66% in counterfeit card and fraudulent purchases from June 2015 to June 2017, according to a recent security report from Visa Inc.(NYSE: V).
Over 2.3 million U.S. merchants, or about 50% of domestic storefronts, now accept chip cards, a whopping 473% increase since the beginning of the EMV migration in the U.S. Chip payment volume across Visa cards has risen mightily as well.
In December 2015, just a shade under $16 billion was facilitated using Visa chip cards. By June 2017, that number had risen to $58.4 billion, a 265% increase.
The next big deal on fraud management will come later this year as card issuers begin to address upgrades to 3DSecure, which will simplify compliance and provide expanded capabilities.
…but for now, this is a win for the industry.
Overview by Brian Riley, Director, Credit Advisory Service at Mercator Advisory Group
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