The adoption of chip-and-PIN card technology by an increasing number of merchants in the United States has led to a significant drop in cases of counterfeit card fraud, according to Visa.
The financial industry has been pushing for the adoption of EMV (Europay, MasterCard, Visa) card technology in the United States since 2011, and efforts were increased following the disclosure of the massive data breach suffered by Target in 2013.
However, according to Visa, by September 2015, only roughly 392,000 merchant locations had been accepting chip cards, and the number of Visa debit and credit cards using this technology was only at 159 million. Data collected by Visa shows the number of storefronts that had migrated to EMV technology by December 2017 increased by more than 570%, with 2.7 million storefronts in the U.S., representing 59% of the total, accepting chip cards.
The number of Visa cards using chip technology increased by 202% to 481 million, with 67% of Visa payment cards having chips. Visa also reported that EMV cards accounted for 96% of the overall payment volume in the United States in December 2017, with chip payment volume reaching $78 billion. As a result of U.S. merchants upgrading their payment systems for EMV cards, cases of counterfeit fraud had dropped by 70% in September 2017 compared to December 2015.
While the adoption of chip and PIN technology addresses the problem of counterfeit card fraud, it has not deterred fraudsters, who have simply shifted their focus to card-not-present (CNP) and other types of fraud. A study released roughly one year ago by Forter showed that there had been a significant increase in CNP fraud and account takeover (ATO) attacks.
Specifically, in the case of ATO, while the number of attacks targeting merchant sites had decreased, there had been a growing trend in ATO attacks on online payment accounts. A study released in September 2017 by Vesta showed that CNP fraud had been a serious concern for 85% of merchants, with roughly one-third showing increased concern.
Torsten George, strategic advisory board member at vulnerability risk management firm NopSec, warned in a SecurityWeek column last year that EMV does not address more sophisticated cyber attacks that target backend systems storing cardholder data. “Security is no longer just about protecting the network and endpoints, but must extend to the database and application layers to name a few,” George explained at the time.
“That’s why, in addition to their work to advance EMV adoption, banks and payment processors should implement cyber risk management practices to identify their attack surface exposure and quickly prioritize remediation of the security gaps with the potential to have the biggest business impact if exploited.”