As frustrating as it may be, the U.S. payments industry is every bit as exciting.
Indeed, the U.S. has some challenges:
- The U.S. is the last of the world’s major economies to start using EMV chip-enabled credit cards.
- U.S. merchants have been slow to embrace EMV cards.
- The U.S. is facing rising card-not-present fraud.
- The U.S. has suffered more data breaches than any nation in recent history.
Where there is crisis, however, there is opportunity.
The seminar entitled Regulatory and Business Challenges (and Opportunities) at the Merchant Payments Ecosystem 2016 conference and tradeshow, presented by Jason Oxman, CEO of the Electronic Transactions Association (ETA), addressed both sides.
The Big Story: Credit Card Fraud
Although the U.S. is the last to adapt to EMV credit cards, according to Mr. Oxman’s presentation, 600 million chip cards were mailed out to U.S. consumers in 2015, with a projected 617 million to be shipped in 2016. A majority migration – where the majority of consumers is using chip cards – is likely going to take 3-4 years as it did when Canada began migration in 2008.
Migration has been slow, but Visa expects 50 percent of U.S. merchants to be fully EMV functional by the end of 2016, steadily rising thereafter.
Investors Love the U.S. Payments Industry
One of the more compelling facts Mr. Oxman revealed in his presentation was a chart depicting mergers, investments and acquisitions in U.S. payments in 2015. According to data from The Strawhecker Group, mobile payments drew the highest amount of investment, mergers and acquisitions while cryptocurrencies and processors received the second and third-highest among such. Loyalty and security ranked fourth and fifth.
Translated, venture capitalists and investors love the U.S. payments industry and its possibilities.
Disturbing Projections About CNP Fraud
Credit card fraud – CNP, counterfeit and lost/stolen — has risen each year since 2012. Backed by information from Statista, beginning in 2016, instances of counterfeiting are expected to drop significantly over the next three years with the widespread use of EMV credit cards.
While counterfeiting will drop, CNP fraud will escalate, estimated as high as $6.4 billion U.S. by 2018. Experts say that tokenization, which provides a secure, encrypted method to processing and storing credit card data, must be implemented. Additionally, biometrics – security measures which identify fingerprints and retinal scans – is also expected to make headway.
CNP Security Solutions with Instabill
As a credit card processor for largely e-commerce businesses, Instabill has security solutions for CNP merchants including SSL certificates and PCI DSS compliance options. Discuss your options with our merchant account managers, who are on hand Monday through Friday (8 a.m. until 6 p.m. U.S. Eastern time) and are a live chat click away.