Hopefully you remember our EMV series covering the various elements of the EMV implementation in the U.S. and the liability shift. If not, let me sum it up for you quickly: As of October 1, 2015, the party (either the merchant or the issuing bank) least prepared for EMV accepts liability for any fraud in a card present transaction.


EMV adoption is a long way off.

If you don’t have an EMV certified solution in place at your campus, you’re not alone. According to The Strawhecker Group study, 44% of merchants thought they were going to be EMV-ready by the end of 20151, but as of February of this year, only 37% of merchants were even accepting EMV2. We have a long way to go before we reach critical mass in the U.S. EMV adoption may hit 90% by sometime in 20173.


So what’s the impact on card-not-present (CNP) transactions?

One thing’s for sure, fraud continues to grow at rapid rates. Some payment experts contend that since introducing EMV, fraudsters have reacted by shifting away from card fraud to focusing on card-not-present channels (CNP) (javelin 20164). In the next five years, the value of fraudulent online transactions will balloon from $10.7 billion last year to $25.6 billion in 2020, according to a new report from Juniper Research5. That’s a whopping number.

Fraud is definitely a global issue. Eighty countries that are currently in stages of EMV chip migration have all resulted in increased CNP or ecommerce fraud6. Take Canada. Its EMV adoption saw a 54 percent decrease in credit card fraud from 2008 through 2013, while CNP fraud jumped 133 percent over the same time period7. Wow.


Another school of thought to ponder.

Other payment experts see the spike as less of an effect of the EMV migration and more of a result of a marked increase of e-commerce volume. An eMarketer report predicts that online sales will grow from $262 Billion in 2013 to $440 Billion in 2017. That’s a 13.8% compounded annual growth rate. Approximately 73% of internet users in the U.S. had purchased products online. Furthermore, more than 61% of those users accessed the internet and transacted the sale through a mobile device; a number expected to grow to nearly 80% of online sales by 20188.


So what do all these statistics tell us?

The increase in CNP fraud has had a real impact on merchants. The rise in the United States is expected to be gradual but large. In 2012-2015, revenue loss grew from 0.6 percent to almost 1.4 percent9. Retailers incur $580.5 million in debit card fraud losses and spend $6.47 billion annually on credit and debit card fraud prevention annually10. The more attention to other payment channels like “buy online/pay in-store,” only fuel fraudsters desire to take advantage. The stakes are at an all-time high.


Growing. Growing. Growing.

Though the arguments differ, the fact remains that CNP fraud is rapidly growing. The expansion of EMV will help quell card-present fraud, but criminals will turn to another means of robbery. While the risk for higher education is still relatively low (the highly targeted items like electronics, gift cards, and jewelry are often not sold by colleges and universities), it is still important to understand the various ways to protect against CNP fraud. Stay tuned for upcoming blogs where we detail a variety of the different approaches.




1 http://files.ctctcdn.com/347071db201/08274512-6cce-4608-bec6-6e696cb57cb9.pdf/

2 http://www.usatoday.com/story/money/2016/02/17/survey-adoption-chip-enabled-credit-cards-falls-behind/80453906/

3 http://www.usatoday.com/story/money/2016/02/17/survey-adoption-chip-enabled-credit-cards-falls-behind/80453906/

4 https://www.javelinstrategy.com/coverage-area/2016-identity-fraud-fraud-hits-inflection-point

5 https://cardnotpresent.com/news/cnp-news-jan16/Report__Retailers,_Banks_Face_Surge_of_Account_Creation_Fraud_-_Jan__28,_2016/

6 http://www.smartcardalliance.org/resources/pdf/CNP-WP-FINAL-022114.pdf

7 https://www.emc.com/collateral/white-papers/card-not-present-fraud-post-emv-env-wp.pdf

8 http://www.statista.com/topics/2443/us-ecommerce/

9 https://www.lexisnexis.com/risk/downloads/assets/true-cost-of-fraud-2015-study.pdf

10 http://www.cardhub.com/edu/credit-debit-card-fraud-statistics/