New PIN and CHIP Services Lead to Spike in CNP Fraud

May 19, 2016

A new report called, ‘Online Payment Fraud: Key Vertical Strategies & Management 2016-2020,’ shows that online fraudulent activity trends are following those seen in Europe a few years ago. Recent PIN and CHIP services at the POS (Point of Sale) locations in the United States, have driven fraudsters from stores to the CNP (Card Not Present) space at accelerated rates. The report predicts that online fraudulent transactions will reach almost $25.6 billion in 4 years. This means that by 2020, $4 out of every $1,000 will be fraudulent.

The report projects that eRetail will constitute 65% ($16 billion) of all online fraud, banking will make up 27% ($6.9 billion), followed by airline ticketing at 6% ($1.5 billion). If fraudster migration trends continue at the current pace, online retailers, banks and travelling agencies will need to take aggressive fraud prevention measures to protect their assets and customers.

Right now, many banks are using anti-fraud technologies like device fingerprinting and 3D-Secure to combat fraudsters. Airlines have also launched sophisticated Fraud Detection and Prevention (FDP) systems that have significantly reduced fraud. But these measures are only temporary fixes and can only divert fraudulent activities to less secure areas. The report highlights these instances. For example, some airlines have managed to reduce eTicket sales fraud by10 basis points of revenue (0.1%). However, when fraudsters fail to make an eTicket purchase, they move to easier areas like frequent flyer fraud.

Online merchants must use permanent and effective merchant chargeback protection to increase their profits and prevent chargebacks due to online fraud. As more consumers use the internet to make purchases, the chances that they will be victims of online fraud drastically increase. Only diligent fraud prevention will protect your reputation, profits, and customer information.

Online payment processors like, eMerchantBroker.com offer Chargeback Shield, a specialty chargeback suite that tracks, monitors, and alerts merchants once a chargeback occurs. Partnerships with Cardholder Dispute Resolution Network (CDRN), Ethoca alert system and Verifi has reduced EMB merchant chargebacks by 15-30%. Let competent merchant account protection keep your customers safe and profits growing. Apply for a merchant account with EMB today and get chargeback coverage right away.

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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 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.

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