As it was predicted long ago, the rate of card-not-present fraud jumped following the implementation of EMV point-of-sale systems in the United States. As in-store credit card fraud becomes less possible, fraudsters will turn to other methods to commit their crimes. This presents CNP fraud as a major problem for merchants and consumers, as online transactions are the most vulnerable source to steal payment information.
One Solution Causes Another Problem
EMV is necessary in the United States, as it has already proved to be a safer way to use credit and debit cards in-store. As the holiday season progresses, it will undoubtedly continue to prove that theory. However, EMV has caused another problem in the world of payment security—CNP fraud.
Because EMV only solves the in-store POS fraud problem, many card skimmers and fraudsters will become cybercriminals instead. It will prove much easier to steal credit card information from online databases than exploiting an up-to-date retail POS system that’s specifically designed to stop fraud. Thus, it shouldn’t come as a surprise as The Paypers reports a 20% increase in CNP fraud since the implementation of EMV.
Stopping CNP Fraud
This type of fraud has the potential to turn into a major problem for shoppers, merchants, and banks if it isn’t dealt with right away. Perhaps the most possible solution is tokenization, which provides a secure, encrypted method to processing and storing customer financial information. Though it might prove to be expensive and time-consuming to implement, it could save millions of dollars lost to cyber fraud.
While tokenization still lingers somewhere between the conceptual stage and the pre-implementation stage, it is vital for e-commerce merchants to be proactive against CNP fraud. One popular method is 3D Secure payment processing, which can add a much-needed extra layer to your e-commerce security through this holiday shopping season. 3D Secure involves passing a consumer payment through a number of secure domains and validation stages so you don’t fall victim to fraud.
Your payment processing security is of the utmost importance now that EMV is becoming the norm in the U.S. Fraudsters will surely turn to alternative methods, and your business could become a target. Learn more about 3D Secure processing and other anti-fraud measures you can take with Instabill today.