Mercator’s thoughts on EMV
In a previous post, I mentioned that when the UK rolled out EMV how card-not-present (CNP) fraud increased so much that the total amount of fraud actually increased instead of decreasing. Apparently the increase in CNP fraud isn’t limited to just the UK. Here’s what the Mercator Group said in their recent report “Encryption, Tokenization and the Top Tier Merchant: A Progress Report on PCI, Deployment and the Cost of Payment Security:”
CNP fraud rates in EMV countries have risen dramatically because of EMV’s effective protection against counterfeit cards. EMV does not address card not present (CNP) risk; it is one layer of security but hardly a blanket solution (there’s no such thing).
The summary of this report also proposes an interesting reality check on EMV:
There is plenty of misinformation swirling around tokenization, encryption and EMV. Some believe that all problems would be solved if only EMV were used in the US. If only that were true. Card number security requires layered defenses and that means using multiple techniques to limit counterfeit credentials (EMV) and to perform the Reverse Rumpelstiltskin of turning our digital gold into straw bits (encryption and tokenization).
There’s lots of other interesting information in this report, and it’s probably worth tracking down a copy if you’re interested in the business of protecting credit card information at large merchants.