As we discussed in our most recent post, Total will be offering Ingenico Group’s terminals in our free terminal placement program. This means our merchants will have access to the latest in EMV-enabled devices. Using an embedded microprocessor instead of the traditional magnetic stripe, EMV has been extremely successful in reducing instances of fraud.
Let’s explain how it works and the types of success merchants have seen in other markets:
How does EMV address payments fraud?
EMV cards have a secure microprocessor chip that can store information securely and perform cryptographic processing during a payment transaction. They also carry security credentials that are stored in the EMV card’s chip and cannot be accessed by unauthorized parties. This helps prevent skimming and card cloning. Additionally, in an EMV transaction, the card is authenticated, the cardholder is verified and the transaction is authorized according to issuer-determined risk parameters.
Should a scammer steal account data from a chip transaction, this data still cannot be used to create fraudulent transactions since every EMV transaction carries dynamic data. And EMV can also address card-not-present (CNP) fraud, with cardholders using their EMV cards and individual readers to authenticate Internet transactions.
What is the impact of EMV adoption on payment card fraud?
To show you the impact of EMV, the U.K. Cards Association reports that fraud on lost and stolen cards is at its lowest level for two decades and counterfeit card fraud losses have fallen to their lowest level since 1999. The association also says that, because of EMV, mail non-receipt fraud at U.K. retailers has fallen by 91% since 2004.
The same thing is true in Canada, which rolled out EMV in 2008. Since then, losses from card skimming in Canada fell from $142 million (Canadian) in 2009 to $38.5 million in 2012.
In our next post, we’ll discuss what you need to know and do going forward regarding EMV.