6 post-EMV fraud trends to watch
Two years after the EMV deadline for U.S. merchants, Auriemma Consulting Group, a boutique management consulting firm, has identified six notable EMV trends:
- Counterfeit fraud claims have declined for five consecutive quarters and are down 34 percent from their peak in early 2016.
- EMV helped trigger a shift from fake cards to fake identities. Synthetic identity fraud was responsible for up to 20 percent of credit losses in 2016, according to Auriemma.
- While chip fallback volume is low — less than 2 percent of transactions — fraud associated with fallback is on the rise, accounting for 24 percent of total counterfeit fraud and 43 percent of lost-and-stolen fraud in Q2.
- The decision not to use chip and PIN in the U.S. has contributed to a 25 percent increase in lost-and-stolen fraud claims since the liability shift, which costs major card issuers $50 million annually, on average.
- The EMV user experience has been panned as slow and confusing, and has triggered calls for contactless and mobile payments. More than half of cardholders believe mobile payments are faster than chip transactions.
- Knowledge-based authentication is considered increasingly unreliable; more than two-thirds of card issuers now use randomly generated passwords sent to a registered mobile number or email address to validate online and mobile transactions, and many see line and voice biometrics as the next step.