Card-Not-Present (CNP) Fraud Is on the Rise

Card-not-present (CNP) fraud is growing as cyber thieves are becoming more skillful at using both technology and stolen payment card data to defraud retailers all over the world.

Card-Not-Present (CNP) Fraud

According to Research and Markets, the world’s leading market research store, e-commerce merchants, particularly in the US, are dealing with rapid online sales growth. At the same time, the credit card industry is continuing to adopt EMV chip technology. In the wake of these trends, merchants are left vulnerable to CNP fraud.

Hotel gift shops, restaurants, and bars have been targeted by hackers for multiple times over the last several years, the result of which was payment card information loss. Hyatt, Marriot, Starwood, Hilton, Mandarin, and Trump hotels are among the brands that have been affected by recent data breaches.

In February, InterContinental Hotels Group (IHG) reported a breach that appeared to involve only a dozen properties. Now, IHG has released data revealing that cash registers at over 1.000 of its properties were compromised with malicious software developed to gather customer debit and credit card data.

Credit Card Fraud and Chargebacks

Last year, American Express joined Visa and announced its new policies, which aimed to reduce fraud costs for merchants who have been dealing with a dramatical increase in chargebacks since the EMV liability shift in October 2015. American Express reported it wouldn’t require merchants to be liable for in-store fraud on counterfeit transactions under $25.

If you’re dealing with American Express chargebacks, consider applying to emerchantbroker.com to get an opportunity to reduce chargebacks and grow your business. EMB, a reputable payment processor and business funding provider, is voted the #1 high risk processor in the US and is rated A+ by the BBB. eMerchantbroker.com provides merchants with unmatched security and protection from fraud to help them fight chargebacks and increase revenue easily. Moreover, EMB is rated A by Card Payment Options and is named one of Inc. 500’s Fastest Growing Companies of 2016.

According to a recent Visa report, counterfeit fraud is dropping. 39% of merchant locations now have chip-enabled terminals accounting for 49% of total payment volume. Among those merchants, counterfeit fraud is down 52%.

However, based on a 2017 Identity Fraud Study by Javelin Strategy & Research, a research-based advisory firm, card-not-present fraud increased 40%, and account takeover fraud grew by a whopping 61% in 2016. Both types of fraud were caused by the EMV migration in the US. This makes in-store fraud more difficult and, consequently, other options for leveraging stolen information online more appealing.

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