News

Study predicts major rise, fall in US counterfeit card fraud through 2020

May 25, 2016

Aite has published a new study that tracks a massive and rapid increase in card fraud in the U.S. as the nation's POS and ATM systems make the transition to the EMV chip standard.

A press release about the Aite Impact Note, "EMV: Issuance Trajectory and Impact on Account Takeover and CNP," said that, "[w]hile EMV gradually works its way into U.S. payments, financial fraud continues to rapidly increase, fueled by reams of data breaches that have given criminals vast stores of consumer data."

The good news is that, judging by the experience of other countries that have migrated to EMV, Aite expects counterfeit card losses to fall dramatically by 2020. The research firm anticipates that with migration largely complete, counterfeit card will drop from a peak of $4.5 billion to approximately $900 million.

But what's good news for card-present types, is likely to be very bad news for online merchants, who primarily conduct card-not-present transactions.

According to the Aite press release, "Lessons learned from other migrations indicate that dwindling counterfeit card opportunities will only increase other forms of fraud."

The research was funded by Iovation and based on Aite Group interviews with U.S. issuing players. The resulting 21-page Impact Note is meant to help FIs benchmark their EMV progress against their peers' and better understand the rapidly shifting fraud landscape.