Success of EMV Chip leads to changing fraud landscape.
The enhanced security provided by EMV chips has significantly impacted card fraud at retail locations. The continued presence of the magnetic stripe as a backup leads to continuing fraud losses. However, as always, where there’s a will, there’s a way, and criminals continue to use a variety of ways to obtain and exploit card information. Several of these ways continue to rely on the presence of the magnetic strip in order to either obtain details or to make fraudulent purchases.
Criminals continue to exploit the magnetic strip in a variety of ways:
- Card skimming through legacy readers at gas pumps, ATMs, and other POS systems.
- Damaging chip readers at retail locations to make purchases using counterfeit cards mag strip
- Damaging the chip in a counterfeit card to enable mag strip purchases.
Of these three, skimming is still a major foundation of card fraud, along with cards stolen from the mail and hacking/identity theft incidents. These avenues provide the raw material that enables clones to be made, or to an ever-increasing degree, for the fraud to happen online and in other card-not-present environments. This increasing shift toward online fraud reflects both the rise of online commerce as a whole as well as the increased difficulty in committing fraud that the EMV chips have enabled.
The deployment of EMV chips and readers, along with contactless payments, has gone a long way to reduce fraud in a card-present environment. But as long as the magnetic strip is still present, and needed due to dated POS systems, it enables criminals to easily steal details and commit fraud. As much as possible, encourage your customers to use their chips and contactless options and upgrade their payment systems to ensure that they’re being used.
If you have any questions about IT security and the evolving threat landscape, call ITPAC today.