By Andreas Baumhof, chief technology officer at ThreatMetrix
A spate of high-profile data breaches and the ongoing threats posed by antiquated magnetic stripe technology has created the need for transformation across the retail and financial sectors — including the upcoming adoption of Europay-MasterCard-Visa (EMV) global standard chip cards throughout the U.S.
But while the shift to EMV technology will mitigate risk for counterfeit card fraud, it will amplify the threat of online attacks. With the deadline for the adoption of EMV card technology slated for October 2015 and other security challenges looming on the horizon, the message for U.S. businesses and IT decision-makers is clear: if there was ever a right time to push for additional security solutions, this is it.
The Security Challenges Posed By EMV And Other Risks
The rationale behind the move to EMV card technology is security-based. By replacing 1.2 billion magnetic-striped credit and debit cards in the U.S., credit card companies will eliminate hackers’ ability to skim card numbers and security codes for the manufacture of counterfeit cards.
But although the U.K. and other countries that have already adopted EMV cards have reduced card counterfeiting, they have also experienced a rise in fraudulent online attacks. In 2012, European online fraud grew 21 percent, largely due to the introduction of EMV card technology.
Online fraud has always been a problem for U.S. retailers and the adoption of EMV cards will intensify the development of new, sophisticated strategies for fraudulent online transactions, activities that EMV card technology is helpless to prevent.
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