The date has passed. As of October 2015 EMV has been implemented by the card brands. Consumers now have EMV Chip cards in their wallets! Consumers are also carrying smart phones armed with Apple Pay, Google Wallet, Android Pay, Samsung Pay and more… for NFC.

What does this all mean?

EMV – The chip on the credit card.

NFC – Near Field Communication. A way that consumers can wave their phone and pay at the point of sale.

EMV & Fraud – If your business does not have an EMV reader and a Customer comes in and you swipe a card that is a fraudulent card, before October 2015, the card issuing bank would pay the business. Now with EMV the business is responsible and will be debited for the Chargebacks.

We have identified that EMV is growing and 60% of consumers in the USA have at least one EMV card in areas like South Florida and other major areas with larger banks. The numbers are 80%+ and consumers tend to have more than one EMV card.

NFC payments – Not as popular as the experts thought but this will grow!

Top categories for fraud

  • Petroleum – Inside Sales
  • Restaurant, Bars, Nightclubs, Clubs – We have several locations that are experiencing $5K to $10K per month in fraud –
  • Quick Service
  • Vending
  • High Risk Areas
  • Texas, New York, California, Illinois, Florida and New Jersey
  • Large Cities
  • College Towns
  • International Cards
  • Border Areas

Fraud has always exsisted at these location types and areas.  The liability Shift now makes the merchant responsible for Fraud Chargebacks.

What can Merchants do to prevent fraud besides upgrading to EMV?

Credit Card fraud is being perpetrated by younger individuals. There have been cases where organized groups on college campuses are distributing fake cards and using them at locations that do not have EMV readers.

Higher transactions in locations. For example, your average sale is $40-$50 and a customer comes in and wants to buy $500 worth of goods or services.

If someone comes in with a counterfeit card that was EMV and now the card number is on a non-EMV card and you do not have an EMV reader, the transaction will go through. If you have an EMV reader the machine would prompt you to insert chip even if the chip is NOT on the card. This is because it is a fraudulent card and the real card is EMV.

Bars, Nightclubs – Watch out for patrons using multiple cards.

Large Catering Orders or booking parties in Restaurants – Especially by younger people.

Buy large amounts of gift cards and possibly use different credit cards.

Visa, Mastercard and American Express Gift Cards – Beware there has been a lot of fraud with these cards. For example, the card looks like a gift card but it is actually a fake card. If you had an EMV machine it would direct you to insert chip.

Best Practices to identify fraud

Verify the last 4 digits match the card and receipt.

Compare Signature – Ask for ID on larger transactions sizes

Use Black Light to check cards

Use EMV Machines – Do not key enter cards.