Fraud in Cards - I

 

Is EMV going to stop the fraud? The answer is NO.

 

Its going to mitigate only partial fraud in the overall fraud issues.

It can't mitigate the fraud in CNP(Card NOT Present).

 

To protect FIs, Banks, CUs and Cardholders, We would need sensible risk management approaches that should complement EMV and Tokenization with best practices.

 

These best practices includes

 

- Real Time scoring that blocks the fraudlent Transactions

- Real Time case management and Monitoring

- Tracking and Monitoring Fraud Alerts

 

In its earliest form, card fraud resulted primarily from stolen cards which FIs, Banks able to combat through card activation processes and first-generation neural networks.

But as new payments technologies proliferated, fraud also became more sophisticated and increased through large scale operations that included phishing, skimming, and data breaches. Enter EMV, which provides new safeguards during card present transactions.

Despite (and likely because of) the positive impact of EMV, a large percentage of new fraud is moving to CNP transactions (like ecommerce transactions) which EMV does not protect.

CURRENT FRAUD Trends Includes:

More diverse cardholder activity – making it more difficult to recognize cardholder patterns
More creative and pervasive fraud, including flash fraud which can result in huge losses before issuers can react and respond

Criminal attacks that have increased in magnitude via both local and global criminal organizations

Social engineering tools that exploit consumers with phishing attacks that take advantage of cultural and current events

Criminal efforts to install malware to obtain online credentials and any pieces of personal information

Vishing/SMiShing.