‘Europe should expect more fraud as US shifts to EMV’
Companies in Europe should expect far higher levels in card-not-present fraud after the United States adopts EMV technology on October 1. That’s what technology company Global Risk Technologies says. In EMV-adopted countries counterfeit fraud decreases, but card-not-present fraud rises as fraudsters move online. As the US is the last major global market to adopt EMV technology, criminals will likely turn to ecommerce companies in Europe.
Omni-Channel Webinar eTail is the only event where you can learn and network with an incredible group of 80+ senior level retail speakers. Learn from innovative start ups and omnichannel disruptors. With thought-provoking content, interactive formats, and a focus on retail tech, eTail is designed to ensure you achieve omnichannel excellence and drive profit. Download The Agenda
Monica Eaton-Cardone, co-founder of Global Risk Technologies, is warning businesses in Europe. The rollout of chip and PIN card protection (EMV) in the US will cause a major shift in credit card fraud to card-not-present transactions in Europe, she says.
Fraudsters will turn to ecommerce markets in Europe
Starting October 1, in the US the party that’s responsible for a chip transaction not being conducted will be financially liable for any resulting card-present counterfeit card losses. (Check the infographic of VISA for more information.) The United States is the latest global major market that will adopt EMV. History has shown that countries who have adopted the technology saw a huge decline in counterfeit card fraud. But on the other hand, they witnessed sharp increases in card-not-present fraud. This happened in Europe, when the liability shift took place on January 1, 2005. After adopting chip and PIN, card-not-present fraud grew 79% between 2005 and its peak in 2008. And in France, such fraud increased by around 20% between 2007 and 2011 following the introduction of EMV.
“The difference now is that fraudsters have nowhere else to turn besides the established online ecommerce markets in Europe”, Eaton-Cardone says. “Last year, the US accounted for an incredible 47% of the fraudulent cross-border transactions on UK debit cards. As the US increases its physical card security, the full force of stolen card monetization will move online to card-not-present fraud, ignoring international borders.”
Tips top help protect against CPN fraud
The company has three tips to help companies protect against rising card-not-present fraud. “The first is to maintain impeccable records. If you have the customer’s signature on file, any fraudulent claim that they ‘never received the parcel’ is easy to disprove. Second, concentrate on customer service.Happy and well-informed customers are more likely to talk to the retailer than head straight to their bank to instigate a chargeback. They’re also likely to spend more too. And finally, optimize your logistics. Speedy delivery of goods combined with an effective paper trail keeps customers happy and can also help highlight potentially fraudulent transactions. Why, for example, would a customer suddenly double their order and set a new delivery address? Often, if a transaction looks too good to be true, it usually is.”