Why aren’t chip credit cards stopping “card present” fraud in the US? Easy Answer = It's not the fault of the Cards at all
A security analysis firm called Gemini Advisory recently posted a report saying that credit card fraud is actually on the rise in the US. That's surprising, because the US is three years out from a big chip-based card rollout. Chip-based cards were supposed to limit card fraud in the US, which was out of control compared to similar fraud in countries that already used EMV (the name of the chip card standard).
While nearly everyone in the US has had their old magnetic stripe cards replaced with new cards that have a chip, it's not uncommon to try to pay for something at a brick-and-mortar store with a chip card, only to be asked to swipe the magnetic stripe on the back. That puts a customer at risk of having their card information stolen, no matter whether they have a chip or not.
When EMV was being rolled out, proponents said that merchants would be incentivized to upgrade their POS terminals to accept chip cards because the liability for any fraud would be shifted from the banks to the merchants or whoever was not supporting chip cards during a transaction. But in some cases, merchants have chosen not to upgrade. In other cases, merchants buy those expensive new terminals and can't use them because they have to be certified by the merchant's payment service provider.
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Why aren’t chip credit cards stopping “card present” fraud in the US? Fraud is on the rise despite a move to chip cards. |