80% Drop in Counterfeit Credit Card Fraud Due to Chip Technology

Mar 21, 2019

Card present counterfeit payment fraud at chip-enabled merchants dropped 80%, since the U.S. payment industry shifted to these types of cards.

In 2011, Visa led the industry by moving to EMV (Europay, MasterCard, and Visa) chip cards. Four years later, widespread adoption of chip technology occurred because it was known to be effective at reducing counterfeit fraud in other countries.

Visa’s latest numbers prove they are working. It saw the sharp decline in counterfeit fraud, during the most recent period ending in December 2018. At the same time, it saw growth in the number of chip cards and chip-enabled merchants, payment and transaction volume since before the shift to EMV chip cards.

Why Chip Cards Work

First, they are very difficult to clone. The credit cards that were rolled out in the 1980s only contained magnetic strips, which were used for swiping. When a card was swiped, the payment processor read its magnetic field and checked it against the bank account. These were less secure because the card data remained static, making it easier for fraudsters to steal the information and put it on a new card.

On chip cards, the data is always changing, so it is very difficult for a fraudster to isolate and extract the information. To steal this type of data, a person would need to get into the circuit of the physical chip and manipulate it to get the cardholder’s bank information. Obviously, this is not only very difficult, but this type of high-tech data surgery requires high skill levels and expensive equipment. So, it’s not like it is impossible but it takes a lot more skill and sophistication to pull this off kind of fraud.

Also, the encryption of chip and PIN credit cards are more complex. When magnetic-strip cards are used, the bank information travels without encryption. On the other hand, chip cards have state-of-the-art encryption build directly into the chip. So, when a chip card is inserted, the card and the terminal used to make the payment use a special type of code or language to transmit messages between each other. Therefore, it is more difficult for that information to be stolen.

The Final Word

Chip technology helps fight counterfeit fraud, and as a plus, that same security technology is also available in contactless payment cards. This means consumers get the ease of quick, convenient tap transactions with the same level of protection against fraud. It’s a win-win situation.

Looking for Credit Card Processing

If you are in need of a merchant account services, including credit card processing, then turn to processor, eMerchantBroker.com (EMB). It work with businesses of all types, including those in high risk industries. Contact EMB today to discuss a payment solution or apply online for a merchant account using it simple online application.

Let us help you get a high risk merchant account today!

Get Started

Award winning.

  • 2012
  • 2013
  • 2014
  • 2015
  • 2016

Having a merchant account allows an account holder to take advantage of merchant cash advances. When a merchant is approved for an advance, the business agrees to receive a lump sum of cash in exchange for an agreed-upon percentage of future credit card sales.

Pricing varies depending on the merchant’s industry, past credit card processing history, the type of business seeking the account, average ticket sales, and average transaction volumes.

Yes, EMB works with merchants who are building their credit, as well as those who have poor credit. EMB also approves merchants that have no credit card processing history and businesses that have lost their merchant accounts due to high chargebacks.

Several factors influence a merchant’s risk level. Though only one factor likely will not get a merchant classified as high risk, a combination of these may: business size, location, and industry, credit score, credit card processing history, a industry’s reputation for excessive chargebacks, a prior history of high chargeback ratios, and whether a merchant exclusively sells online.

Virtual terminals are stationed on a merchant’s website, making it easy for customers to make a payment or purchase online. Merchants or a payment processor can easily set up virtual terminals, so online businesses can accept credit and debit card and e-check transactions.

A merchant account is a business account with an acquiring bank. Without this business account, which actually works more like a line of credit, a merchant cannot accept and process credit and debit card transactions. Businesses need a merchant account to accept major credit cards via a static point-of-sale terminal, mobile card reader, or through a virtual payment gateway.

After filling out EMB’s simple online application and submitting any necessary, requested documents, many merchants get approved within 24 and 48 hours.

EMB specializes in working with high-risk merchants. EMB works with many merchants, including but not limited to businesses in these industries: gambling and gaming, adult entertainment, nutraceuticals, vaping and e-cigarettes, electronics, tech support, travel, high-end furniture, weight loss programs, calling cards, e-books and software, and telecommunications.

Live Chat