Guest Column | May 29, 2014

The Fight Against Fraud: Why The U.S. Needs To Step Up Its Payments Game

By Jeremy Gumbley, CTO of Creditcall

By Jeremy Gumbley, CTO of Creditcall in New York

While credit card fraud is in no way a laughing matter, the latest figures around the amount of customer data comprised and dollars stolen are quite astonishing.  Nearly 70 million customers’ credit card data was reported stolen from the Target breach alone and an annual figure of $11 billion lost was recently reported by Javelin Strategy & Research.  But consumers and businesses aren’t laughing as more parties are questioning the systems that have been put in place and why the U.S. — one of the typical leaders in the tech race — is dating itself with insecure magnetic stripe based technology.

Meanwhile, around the world there are 1.62 billion EMV-compliant payments cards in use. The EMVCo standard has transformed the payments landscape, requiring every single terminal to be modified or replaced and banks to re-issue every credit and debit card.

However, it’s proving to be a less-than-easy task in the U.S. as the cost of EMV migration and the complexity of migrating are widely acknowledged as major barriers to the adoption of the new standard as a whole. The fact remains that the U.S. is one of the last major economies to adopt EMV and ultimately faces an imminent deadline for liability shift. In October 2015, MasterCard and Visa’s regulations on liability for fraud will change, shifting liability to the merchants and banks, in an effort to encourage a migration to EMV. These new regulations will make it so that when a fraudulent charge occurs, the liability will fall upon whichever party involved in the purchase has the less secure (i.e., not EMV-compliant) technology.

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