Counterfeit Fraud Down 76% Since America’s Switch to Chip Cards
Counterfeit fraud continues to decline, thanks to America’s transition to chip payment cards. According to the latest research from Visa, the number of fraudulently copied credit cards used in stores dropped 76% from December 2015 to December 2017.
Nearly three million merchant locations now accept chip cards in the United States, up from 392,000 in 2015. Now, 63% of merchants accept chip cards, and 97% of March transactions were paid using EMV cards. That’s a total of $70.7 billion, compared to $59.4 billion in September 2017.
There are now 483.6 million chip cards in circulation, with slightly more debit cards (281.6 million) than credit cards (202 million).
While chip cards have reduced the risk of counterfeit fraud, many merchants are now combatting card-not-present fraud. This is most common for online transactions, where a physical card is not presented to a merchant. Fraudsters can use stolen card information to complete online purchases, as long as they have enough data to pass security protocols.
Between 2016 and 2017, CNP fraud increased in all categories except footwear, with some sectors seeing as much as a 300% increase in fraud. This may not entirely be the result of the EMV switch though. Online shopping as a whole has grown tremendously over the last few years, especially with stores integrating their in-person and online shopping experiences. For instance, Kohl’s now offers free shipping for purchases on their mobile app as long as the customer buys in store. Amazon continues to create new offers at Whole Foods, including 5% cash back for Prime Credit Card holders. As stores entice more customers to shop on the web, fraudsters will be drawn to the web as well.