Europe may have been using EMV, or Chip-and-PIN, card security long before the US set its October 2015 deadline for its much-delayed rollout of the technology, but that does not mean Europe is safe from the increased levels of card-not-present (CNP) fraud that this will bring.
As fraud always follows opportunity, the US migration to EMV will reduce the potential for criminals to use physical card fraud techniques and instead will prompt them to focus their full attention online, or CNP fraud.
In other countries, the roll-out of EMV prompted a rise in CNP fraud – a trend that was mirrored in other countries across the world, including the UK, France and Australia. FICO recently released a report showing that CNP fraud in Europe is still rising, while criminals frequently change and adapt to the ‘easiest’ targets across the continent.
The difference between Europe’s early adoption of EMV and the US’ late adoption of the technology is that ecommerce is now a global retail phenomenon. The US is a phenomenally large market for online shopping, while many of Europe’s most popular online retailers are US companies. The exodus of fraudsters from offline to online fraud will be felt on a global scale and is threatening to catch European merchants off guard.
Increases in consumer spending and rising levels of CNP fraud will likely prompt higher levels of chargebacks as customers go direct to their bank to recover illicit transactions. This surge in chargeback claims could also mask increasing levels of friendly fraud as merchants struggle to differentiate from genuine and non-genuine claims without specific, specialised chargeback prevention and remediation.
The US adopting EMV will bring much-needed protection to card security, but as its fraudsters turn online, global fraud prevention technologies will become more crucial in combatting the renewed threat of CNP fraud.
