According to forecasts from Aite Group nearly all credit cards issued in the U.S. will have EMV capabilities by 2018 when CNP credit card fraud losses are expected to reach $6.4 billion in the United States. As EMV cards become commonplace among U.S. cardholders it will make counterfeit card fraud more difficult and drive more fraud attempts to the online channel. CNP merchants should already be preparing for increased fraud attempts, considering how it may impact manual review loads and if current risk management strategies should be supplemented with additional tools and techniques.
As EMV or Chip-and-PIN cards began to phase out magnetic-stripe payment cards in the UK, Canada and several other countries, fraudsters started migrating online and to other Card Not Present channels. While counterfeit card fraud in Canada fell from $245 million CAD in 2008 to $112 million CAD in 2013 after five years of chip cards, CNP fraud increased from $128 to $299 million CAD over this same time frame. Card Not Present fraud increased more than 300 percent in the UK following the rollout of Chip-and-PIN. A similar sequence of events is expected in the U.S. as banks issue EMV, or chip, cards to replace the less secure magnetic-stripe predecessors in time for the October liability shift deadline.