40 per cent increase in fraudulent transactions in just a year.

The US took its time rolling out the adoption of EMV cards, and in many places, the changeover hasn’t even occurred yet. Part of the delay is in forcing retailers to update their POS systems, which isn’t an inexpensive process. Other critics of the rollout have argued that it was all for naught, as the US opted not to include the “PIN” aspect to the EU’s chip-and-PIN system. While microchips may arguably be more secure than traditional magnetic stripes, there’s no secondary authentication in the form of a one-time use PIN number. For most consumers, it’s just a matter of inserting the card into the chip reader rather than swiping it through the stripe reader.

EMV-Black-Credit-Card

An unfortunate consequence of the chip card adoption has been a dramatic increase in “card not present” fraud. These transactions, made either online, over the phone, or via a keyed in credit card number, have resulted in a 40% increase in fraudulent use over the course of a single year.

According to a study by Javelin Strategy & Research, researchers found “that the increase in EMV cards and terminals was a catalyst for driving fraudsters to shift to fraudulently opening new accounts. On a positive note, while fraudsters are becoming better at evading detection, consumers with an online presence are getting better at detecting fraud quicker, leading to less stolen overall per attempt.”

The EMV launch in the States has been met with harsh criticism, largely due to the delay involved in waiting for the POS terminal to read the microchip. Consumers and store employees alike have expressed frustration with the delay, as well as with the lack of education on the process. Of course, without the aforementioned PIN system, the cards are only marginally safer than the previous system; the inconvenience coupled with the rise in CNP transaction fraud has left some people wondering why there was such a push to make the switch in the first place.