THE CHALLENGE IN PREVENTING
CARD FRAUD IN U.S.
The migration of EMV or chip-based payment standards has heated up in large part due to the well publicized security breaches and card fraud. But, is the overall impact to U.S. merchants going to be the answer to dramatically reducing fraud? Probably not.
Harry Williams the President of JetPayi5, a merchant services provider specializing in online transactions and a bank processor, is skeptical. "A lot of people seem to think that face to face or POS in-store payment fraud will be cut by 70-90%. That's just not the case."
Mr. Williams and others suggest, that while cloning, skimming and counterfeiting have largely not been successful in countries that have adopted smart chip cards, that might not be the case going forward. Card usage in the U.S. is about $2.6 trillion annually. This represents about 41% of the total card usage globally.
Experts reason that when large scale adoption occurs in the U.S., fraudsters will invest the resources to "capture" a new burgeoning market. David Marcus the President of PayPal claimed that his smart card was skimmed when he used his card at one hotel in Europe.
Card Not Present and E-Commerce
Smart card technology will not prevent misuse and fraud in card not present transactions. Card not present transactions will continue to grow as a result of the procurement card and virtual card growth in the B2B sector of our economy.
According to Payment Source, in 2012, e-commerce transactions represented about 13% of all card transactions in the U.S. While the final stats on Holiday Shopping 2013 are still not in, all indications are that e-commerce and m-commerce grew significantly while brick and mortar was flat at best.
New Solutions Changing the Landscape
Harry Williams has just received a patent pending on a program that puts the card user in control of their own security. Mr. Williams solution is safer than chip based cards but is compatible with any branded bank issued card including debit, credit, re-loadable debit and even gift cards.
Mr. William's patented program allows the card holder to pre-approve transactions just minutes before the purchase. Without the approval the transaction will be rejected. This is all accomplished with a simple yet highly secure app on the cardholders phone. It's easier than sending a SMS text.
Additionally, the growth of re-loadable cards is a significant move towards eliminating fraud. Versatility and technology has made it possible for both companies and consumers to load their cards just moments before the funds are needed via their phones, pads and computers.
You can't steal what isn't there or hasn't been approved in advance.
Let's face it, if hackers can breach sophisticated, secure systems, they will break the false security of the chip based technology.
We would love to hear your input on this subject.
Eagle Point Network