In the months leading up to October 2015, there were many questions in the payment card industry, from issuing banks and credit unions, to processors, to merchants and all the way to consumers. The main question on everyone's mind was "How will EMV and the chargeback liability shift impact me?" While the U.S. transition to EMV or chip card technology, has not always been smooth sailing, a year later one thing is certain: EMV has made a lasting impact on credit card fraud, but it is not enough to take on the task alone.
As predicted, EMV lowered the rate of face-to-face transaction fraud. According to a recent survey by Vantiv, 22% of adults in the United States reported that they or someone in their household had their credit card information stolen, down from 27% in the previous year. With 2014 being a record year for hacking of credit card information, EMV's presence, which continues to grow as more issuers send chip cards and merchants upgrade POS terminals to accept them, should continue to lower the cases of card present fraud.
However, also as predicted, EMV's adoption in the US increased the occurrence of card-not-present (CNP) fraud and will continue to do so. As cited in the article, So far so good? EMV's Impact on Credit Unions, estimates for online and other card-not-present fraud show a dramatic rise and will cost U.S. retailers and financial institutions $7.2 billion by the end of 2020. So while EMV is making its mark on a segment of transactions, a significant chunk of all transactions are being targeted, including all online and over the phone orders. It is this development that is pushing issuers to add enhanced security features.
Credit card controls are not only a great addition to your member service portfolio, they are increasingly becoming crucial to your card security measures. Remote controls for cards allow members to control the status of their debit and/or credit card through a mobile app. Card limits and notification settings set by your members through online banking will further eliminate fraud by putting your members in control of how and where their card is used. In fact, according to the Vantiv survey referenced earlier, setting up alerts for purchases above a certain price limit, has been ID'd as one of the most important card security features available to them, with 48% of respondents aware of the feature, and 32% of cardholders using it. Other notifications your members will find useful include notifications if their account is used internationally, or even the ability to stop a transaction before it starts if it is over a certain price point.
With Vantiv reporting that 43% of consumers having experienced personal credit card fraud, and 32% know someone who has experienced card fraud, new measures are necessary to strengthen your member's security when using your credit unions cards.