As EMV chip migration is implemented for U.S., card-presenttransactions, fraudwill “shift to other types of card payments with weakerauthentication protocols,” according to a new EMV Migration Forumwhite paper.

The white paper, “Near-Term Solutions to Address the GrowingThreat of Card-Not-Present Fraud,” based its conclusion onhistorical precedence in other countries evolving to EMV. As EMVsecures face-to-face or card present transaction card-not-presentpayments—Internet, mail order and telephone order—sometimesreferred to as IMOTO become a weak link in the defenses againsttransaction fraud.

For example, the move to EMV payments in the U.K. left IMOTOauthentication unchanged. IMOTO fraud grew rapidly from the startof EMV deployment in 2003 until it peaked in 2008. Beginning in2008, IMOTO fraud declined for several years as merchantsimplemented more secure authentication protocols for Internettransactions and as magnetic stripe-only locations in continentalEurope decreased. Data from the U.K., France and Australia2show that CNP fraud also became a larger portion of overall fraudduring and after their EMV chip conversions.

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Roy Urrico

Roy W. Urrico specializes in articles about financial technology and services for Credit Union Times, as well as ghostwriting, copywriting, and case studies. Also: writer/editor of a semi-annual newsletter for Association for Financial Technology since 1997 and history projects funded by the U.S Interior Department, National Park Service and Warren County (N.Y.).