DES MOINES, Iowa-While magnetic stripe data can easily be skimmed, criminals can't do the same from a chip card.
EMV, as it gains widespread acceptance in the U.S., is predicted to markedly reduce losses from sophisticated skimming rings already operating within the U.S.
That's a point made by several sources, as well as by Aris Jerahian, VP of client relations at The Members Group, in a white paper titled "Chip Card Debate: U.S. Weighs Benefits of PIN and Signature Formats. Jerahian noted that the U.S. has gained international attention for its failure to adopt EMV as a standard, citing that the U.S. accounted for 47% of global credit and debit card fraud as of December 2011. "The stat is even more troubling when taken in the context that Americans only generate 27% of the total volume of purchases and cash," Jerahian said.
Mark Rennie Davis, senior payments consultant at MasterCard Advisors, New York, pointed out that data shows that across-border counterfeit card fraud in the U.S. is rising steadily from countries that have completely migrated away from mag stripe to EMV.
"It is a bit of a hypothesis to say that as EMV becomes widely accepted in a country that the fraudsters there then turn to the U.S," said Davis. "But the numbers are hard to dispute. I think this points out financial institutions can no longer hold to the thinking that fraud costs can be absorbed. It's going to get worse"
Bob Hackney, president of the Clearwater, Fla.-based CSCU, said. "Just like water travels the path of least resistance, fraud goes to the path of least resistance. So where there is chip there is less fraud, and vice versa."
Davis noted that EMV cards can be counterfeited. "However, the fraudster needs a great deal of knowhow and must make a significant investment in time and technology. Those things, the cost and complexity of counterfeiting an EMV card, seem to deter criminals."
