What Happened After the EMV Chip Card Adoption?
The US transition to EMV Chip based credit cards started in October of 2015. After more than 2 years, about 60% of US retailers have terminals that accept EMV chip cards. According to Visa, fraud has dropped about 70% since the adoption. The Target data breach was a huge setback that Target did eventually bounce back from, but at what costs? We will never truly know the ramifications of the data breach. But we do know that we now have systems in place that do make it even harder for fraudsters to cheat with EMV chip based cards.
For a start, those numbers look great but do they? Let’s take a closer look.
Those numbers may look insignificant because it has been 2 long years. 37% of retailers have had the ability to process chip cards since early 2016 and the adoption rate after 2 years stands at only 60%. It should be closer to 100% if you ask me.
On the other hand, it’s great that fraud has dropped a whopping 70%. EMV chip cards make it a lot harder for stolen card numbers to be used. Data that was stolen in the Target breach could be sold and used by fraudsters online. But the data from EMV chip terminals is stored and processed differently and makes it almost impossible to be used by fraudsters. Retailers using the EMV capable terminals need to make sure that their online storefronts are also secure in order to make sure that no card data ban be stolen. The fight has to be fought on all fronts.
EMV chip embedded cards are the best deal to reduce brick and mortar card fraud. But given the fact that online shopping is increasing year on year, and favored by many, in time, this deal may not work out great in the very long run.
If we go by world standards, EMV does clearly have its benefits as demonstrated by EMV adoption by most other countries more than a decade ago. Europe, Asia, Australia, and many Latin American countries moved away from magnetic stripe credit cards about a decade ago. They have reaped early adoption advantages and are not looking back. In the US, we are finally catching up. With the growth of contactless and mobile payments to hopefully, carrying physical credit cards will become less common.
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