This is an exciting time to be in the payments industry. The U.S. deadline for the EMV chip-and-PIN migration is officially less than one year away, and Apple Pay recently became available to iPhone 6 and iPhone 6 Plus users.
Its widely believed that once implemented, the EMV standard should drastically reduce card present fraud in the U.S. as it has in other countries. Add to that Apple Pays combination of biometrics and tokenization and it would seem that consumers and retailers have nothing to worry about: card present fraud will be history by this time next year. Not so fast
While EMV and Apple Pay may well reduce card present fraud, fraudsters never rest. Although EMV will offer more security for point-of-sale transactions, we can expect a rise in other types of fraud including card-not-present (CNP), application and account takeover fraud, as fraudsters look for new ways to beat the system.
Our data suggests that there is also a general rise in mobile fraud. For example, one of our customers is seeing about 50% higher fraud rates coming from the mobile channel over other channels. While identity solutions and device fingerprinting are effective ways to protect against mobile fraud, the trend is undeniable.
As for Apple Pay, sophisticated hackers already cracked the iPhone 5s biometric scanner and its probably only a matter of time before they discover a way around tokenization.
And what about Android phones? According to an August 2014 comScore report4, Android is the #1 smartphone platform with 52 percent platform market share. Will fraudsters simply shift their focus to more aggressively target Android devices?
Theres no denying that these new technologies will help make payments safer, but those of us in the industry must continue to remain diligent in order to stay one step ahead of fraudsters. Payment technologies hasnt changed in decades, and we now have a front row seat for two of the most significant industry innovations in the past decade. Its an exciting time to be in the payments industry just dont take your eye off the ball. We know the fraudsters wont.
Aaron Kline is the director of e-commerce at ID Analytics.
